Why I’m Downgrading Hims & Hers Stock in 2025’s Volatile Market

Telehealth darling faces prescription-strength headwinds as digital health sector cools.

Growth Metrics Stagnate

Subscription numbers plateau while customer acquisition costs spike—the classic growth-to-profitability transition hitting harder than expected. Quarterly reports show user expansion slowing to single digits, far cry from pandemic-era surges.

Regulatory Headaches Mount

FDA scrutiny intensifies across telehealth prescriptions. States tightening telemedicine regulations create patchwork compliance nightmare. Hims & Hers' core model—quick consultations for ED meds and skincare—faces unprecedented regulatory friction.

Competition Gets Aggressive

Amazon Clinic and Walmart Health digital push stealing market share. Traditional healthcare systems launching their own telehealth platforms with built-in patient bases. Specialty startups targeting niche conditions with better unit economics.

Profitability Remains Elusive

Despite revenue growth, bottom line still bleeds red. Marketing spend consumes disproportionate revenue share. Scale advantages not materializing as predicted—each new customer costs more than the last.

Another digital health play learning that disrupting healthcare moves slower than tech investors' attention spans. Sometimes the cure hurts more than the condition.