Online Healthcare Provider Sees Revenue Surge, but Slows Down Margin Growth
Hims & Hers Health (HIMS) stock plummeted in late trading after the company reported a decline in margins despite better-than-expected sales. The online healthcare provider’s fourth-quarter revenue nearly doubled to $481.14 million, and earnings per share rose to 11 cents from 1 cent last year.
The company’s gross margin fell to 77% due to rising costs, primarily related to the rollout of new weight-loss offerings. Hims & Hers claims these new products are strategically priced to attract new customers. However, analysts may be concerned about the impact on its competitiveness in a market where obesity medicines are less scarce.
Looking ahead, the company forecasts first-quarter revenue of $520 million to $540 million, above analyst estimates. Despite this, investors remain cautious amid rising costs and concerns about the strength of Hims & Hers’ weight-loss offerings.
Source: https://www.investopedia.com/hims-and-hers-shares-plunge-as-costs-tied-to-weight-loss-drugs-squeeze-margins-11685734