No Use Crying Over Spilled GLP-1S

I was having drinks last month with my venture capitalist friend Brad, who kept bragging about his “contrarian” bet on telehealth. After his third Negroni, he confessed he’d dumped his entire Hims & Hers (HIMS) position the day the FDA yanked semaglutide off the shortage list.

“Lost 42% in a week,” he muttered. “Never touching that sector again.” I ordered him another round and changed the subject, but I kept thinking: this is exactly why retail investors consistently outperform the “smart money.” They panic at headlines while the real story unfolds in the footnotes nobody bothers reading.

What a lot of people keep missing about Hims & Hers is the fact that this isn’t a recovery play from the GLP-1 debacle. It’s a deliberate pivot that’s been cooking for over a year, and most investors are only now catching the scent.

That revenue per subscriber drop from $84 to $74 last quarter? Everyone’s treating it like a bleeding wound that needs urgent cauterization. Completely wrong frame.

What actually happened is the company surgically removed its highest-revenue, highest-risk customers and replaced them with a more diversified, stickier subscriber base.

Mike Chi’s promotion to COO isn’t some routine corporate musical chairs. This guy built the entire growth engine as Chief Commercial Officer since 2021, launching everything from mental wellness supplements to sexual health bundles to oral testosterone treatments.

Hims literally created a position for him back then because they saw the freight train coming: a fundamental shift away from high-margin, high-risk regulatory plays toward a diversified subscription ecosystem that no single FDA decision could derail.

Now they’re handing him the operational keys right before November 3rd earnings. If you don’t think that timing means something, you haven’t been paying attention to how insiders telegraph moves.

Their Kyzatrex partnership with Marius Pharmaceuticals (MRNS) is the blueprint everyone should be studying, but almost nobody is. Let me give a bit of context.

Kyzatrex retails at $179 for 120 capsules, while the competitor Jatenzo from Clarus Therapeutics (CRXTQ) costs nearly $900 for the same quantity. Neat price arbitrage, sure. But forget that surface-level analysis for a moment.

What Hims actually acquired here is cross-sell velocity at scale. They’ve already got over 500,000 subscribers using multi-condition treatment plans, up 170% year over year. That’s not incremental growth, that’s the inflection point where a business model goes from interesting to inevitable.

Converting an existing testosterone customer into a testosterone-plus-sleep-aid-plus-mental-health subscriber involves roughly zero customer acquisition cost and minimal friction. You’ve essentially built a distribution moat that competitors like Teladoc (TDOC) would need years and hundreds of millions to replicate.

More notably, Hims learned more from the Novo Nordisk (NVO) partnership failure than they ever would have from a success, and the Marius deal proves they’ve internalized every lesson.

Smaller pharmaceutical companies with FDA-approved products are desperate for distribution channels. Hims has 1.5 million subscribers on a platform that can integrate a new prescription product in weeks, not months.

That’s the strategic asset the market hasn’t properly valued yet, and it’s the reason you’ll see two or three more partnership announcements before mid-2026.

Sleep aids and gut health are next. Sure, the space looks crowded at first glance: Eli Lilly (LLY) partnered with Form Health, Pfizer (PFE) built its own PfizerForAll platform, and Idorsia’s (IDRSF) Quviviq flows through KnippeRx for fulfillment.

But assuming that there’s no way to infiltrate this sector is backwards thinking. None of those platforms has Hims’ subscriber density or conversion infrastructure.

When over 60% of your subscribers are already in holistic treatment plans, adding a sleep aid or gut health prescription stops being a customer acquisition problem and turns into a click-through rate optimization. The unit economics are completely different animals.

Now, everyone’s obsessing over the valuation multiples – 5.07x forward price-to-sales versus 4.15x sector median, forward EV-to-EBITDA at 37.1x versus 12.42x for peers – and missing the actual story.

Strip out the GLP-1 volatility and look at what remains: 30% to 40% revenue growth with positive cash flow, a PEG ratio of 0.08, and consensus earnings growth of 37.6% in 2026, 23.8% in 2027, 35.7% in 2028.

The market isn’t mispricing risk; it’s pricing in the compounding effects of a subscription model that just hit critical mass. Those multiples look expensive until you realize you’re paying today’s price for a business that’ll look radically different 18 months from today.

The risks are real but manageable. Regulatory exposure remains the obvious landmine – we all watched that 42% crater when the FDA made its semaglutide move.

Partnership dependency is the subtler concern, and if Kyzatrex disappoints or another pharma deal implodes, sentiment will collapse faster than Brad’s risk tolerance.

But what most aren’t modeling is that Hims now has enough product diversity that no single regulatory decision or partnership failure can destroy the thesis. That’s the entire point of building the holistic model. They’ve essentially created an antifragile business structure.

The November 3rd earnings call isn’t about whether they’ve recovered that $10 ARPU gap yet. It’s about whether management articulates a clear Kyzatrex integration timeline and telegraphs the next partnership.

If Mike Chi discusses margin expansion from multi-product adoption and guides toward $80-plus ARPU by Q2 2026, this stock reprices immediately. The setup in the first half of 2026 looks considerably better than what’s currently discounted.

So when I see Brad next month, I’ll probably buy him that fourth Negroni and gently suggest he reconsider his telehealth thesis.

Sometimes the best contrarian play is circling back to the opportunity everyone abandoned after the panic. The smart money bailed at the bottom. The patient’s money is about to get paid.