Skepticism Grows as Hims & Hers Bets Big on 2026 Investment Push

Hims & Hers begins the year on a cautious note, facing investor headwinds driven by a bearish Bank of America assessment, lingering insider selling, and intensifying competitive pressure in its high-margin weight-management segment. The big question: will 2026 hinge more on heavy investment or on further expansion?

The mood shift is traceable to a new note from Bank of America analyst Allen Lutz. He reaffirms an Underperform rating and trims the stock target from $32 to $29. In his view, the market’s 2026 revenue expectations—about $440 million in incremental annual sales—are too optimistic given the company’s late-2025 growth trajectory.

Lutz portrays 2026 as a year dominated by capex. He expects management to lift spending on personnel, push ahead with expanding the technology platform, and accelerate the more tightly integrated build-out of the supply chain. From his perspective, this round of investments would undermine any near-term improvement in EBITDA margins that the market has priced in. Consequently, BoA anticipates potential downward revisions to earnings forecasts in the coming months.

Insider activity and mounting GLP‑1 competition

Additional pressure arrives from insider trading activity. Chief Financial Officer Oluyemi Okupe disclosed stock sales following option exercises dated January 7. While not unusual in itself, the timing amid uncertainty around the 2026 growth plan draws extra attention.

Separately, the competitive landscape in GLP‑1 weight-loss therapies—one of Hims & Hers’ key growth drivers—has intensified. Novo Nordisk this week announced broader access to its oral Wegovy pill. Notably, Hims & Hers is not listed in Novo’s updated partner roster.

Citi analysts flag a potential risk here: easier access to oral GLP‑1 products could pressure Hims & Hers’ own compounded or pharmacy-compounded GLP‑1 offerings, especially if more oral options enter the market in 2026 and shift share away from specialty solutions.

Should investors sell immediately? Or is it worth buying Hims & Hers?

Valuation, strategy, and the investment crossroads

Hims & Hers is entering a delicate transition period. After a rapid lift in weight-management growth, the emphasis is shifting toward infrastructure and long-term differentiation.

Two focal points dominate the conversation:

• Valuation: Historically, the stock carried a premium tied to strong growth and margin fantasies. Bank of America argues that without meaningful near-term margin improvements, maintaining those high multiples becomes harder to justify.
• Strategic overhaul: The push for vertical integration of the supply chain and an expanded “Labs” offering aims to make the business more robust and less vulnerable to competition. BoA also notes that such initiatives typically weigh on near-term profitability, creating a tension between short-term earnings pressures and longer-term value-building—an issue that has created friction with certain investors.

On the chart, the share price has inched higher, hovering around $35. It sits roughly 9% above the 50-day moving average but remains well below the 200-day benchmark, signaling a partial rebound against a still-weaker medium-term trend.

What to watch for in 2026

The focus now turns to the upcoming fourth-quarter report, where management is expected to lay out a more explicit framework for 2026. The key question is how the projected acceleration in investments will line up with targets for revenue growth and margin expansion.

Analyst commentary in recent days sketches a clear picture:
- Bank of America expects costs to rise meaningfully and foresees negative earnings revisions as a likely outcome.
- Truist Securities remains neutral, citing a challenging consumer environment but stopping short of a negative stance on the stock.
- Citi points to the GLP‑1 business risk, highlighting the potential drag from new oral offerings by established pharma players.

In summary, 2026 presents a decisive test for Hims & Hers: can higher investment translate into durable earnings, a stronger standing in the GLP‑1 arena, and a credible path to margin improvement? A successful outcome could narrow the discount versus prior peaks; failure to meet growth and profitability targets could keep the stock in the camp of the skeptical, including Bank of America.