Hims & Hers Health, Inc. (NYSE:HIMS) shares fell over 2% on Tuesday even after the telehealth company posted second-quarter revenue of $753.2 million, up 38% and above the $699 million analysts expected. The firm raised its full-year revenue outlook.
Novo Nordisk A/S (NYSE:NVO) suffered a similar fate a week earlier, with shares dropping about 6% despite raising its own annual guidance.
Why This Matters
Both companies are chasing the same booming GLP-1 pill market, and investors punished both stocks around their latest updates for the same underlying worry: rising costs are eating into the profits that fast growth is supposed to deliver.
That raises the real question: is this normal growing pains in a hot new category, or a sign the weight-loss pill business is tougher to profit from than the market first assumed?
The Bull and Bear Case: Hims & Hers Health, Inc. (NYSE:HIMS)
Subscriber count grew 19% to 2.89 million, and monthly revenue per average subscriber rose 21% to $92. The company raised its full-year revenue outlook to $3.1 billion to $3.3 billion, and its third-quarter guidance of $880 million to $900 million tops the $792 million analysts expected. CFO Yemi Okupe said the company has even more conviction now in its 2030 target of at least $6.5 billion in revenue.
Hims & Hers Health, Inc. (NYSE:HIMS) swung to a $127.9 million net loss from a $43.5 million profit a year earlier, far worse than the 5-cent-per-share loss analysts expected. Gross margin fell for a fourth straight quarter as the push into branded GLP-1 drugs and international markets drove cost of revenue up sharply. CFO Okupe said margins will likely stay below historical levels going forward. The company also faces an FTC lawsuit over alleged misuse of user data, which it disputes.
The Bull and Bear Case: Novo Nordisk
Novo Nordisk A/S (NYSE:NVO)’s updated guidance is technically an improvement, now calling for adjusted sales and operating profit down 6% to flat, versus a prior range of down 4% to 12%. Its Wegovy pill has topped 5 million prescriptions since its January launch, and CEO Mike Doustdar said roughly 300,000 UK patients started taking it within its first three weeks there.
Wegovy pill sales of 3.22 billion kroner missed the 3.33 billion kroner analysts expected. Novo’s guidance also flagged a coming sales decline in its US business, citing tougher competition and lower realized prices tied to its pricing deal with the Trump administration. Mizuho’s Jared Holz said the lack of upside in pill sales is what sent the stock lower.
Insider Monkey’s Hedge Fund Data
Hims & Hers Health, Inc. (NYSE:HIMS) was held by 43 hedge funds as of Q1 2026, up from 39. Novo Nordisk A/S (NYSE:NVO) held steady at 55 holders. Both remain modest hedge fund positions relative to their public profiles in the fast-growing weight-loss category.
Conclusion
Both stocks are growing exactly as promised, even though investors are making clear that growth alone isn’t enough when the cost of getting there keeps climbing too.
Overall, hedge funds favor Novo Nordisk A/S (NYSE:NVO) over Hims & Hers Health, Inc. (NYSE:HIMS).
While we acknowledge the risk and potential of HIMS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HIMS and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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