Hims & Hers Health (HIMS) just dropped its Q3 numbers, and the initial reaction seems positive. The stock popped 6.44% in after-hours trading. But let’s dig deeper than the headlines and see if this is real growth or just some financial engineering.

The Top Line vs. The Bottom Line

Revenue came in at $598.97 million, beating estimates of $580.24 million. That's a win, sure. Subscriber count is up too, almost 2.5 million, a 21% year-over-year jump. Those are the numbers the company wants you to see. Hims & Hers Stock Pops After Q3 Earnings: Here's Why - Benzinga

But the devil is always in the details. Earnings per share (EPS) missed, coming in at six cents against an expected nine cents. That discrepancy—the market seems to be overlooking it—suggests that while they're bringing in more money, they're not necessarily more profitable. Revenue growth doesn't automatically translate to a healthy business.

And then there's the forward guidance. They're projecting Q4 revenue between $605 million and $625 million, lower than the $631.68 million analysts were hoping for. They also narrowed their full-year revenue outlook to $2.335 billion to $2.355 billion, again, below the $2.341 billion estimate.

This isn't a disaster, but it's a pattern. Last quarter, they missed revenue expectations by 1.1%. They’ve only missed revenue estimates once in the last two years, and exceeded expectations by 3% on average. (A fact that seems to be getting less attention than it should.) So, is this a blip or a trend? The market seems willing to give them a pass, but I'm not so sure.

The Wegovy Wildcard

The big news—the potential game-changer—is the talk about offering Novo Nordisk's Wegovy (both the oral and injectable versions) through their platform. This could be huge. Weight loss drugs are a massive market, and Hims & Hers getting a piece of that pie could significantly boost their numbers.

But let's be real: these are "active discussions." That's corporate speak for "nothing is finalized." It's a dangling carrot, a potential future win that's being used to distract from the present. How much of the recent stock pop is based on this hypothetical deal? It’s impossible to say for sure, but I suspect it’s a significant factor.

What happens if the deal falls through? What if the terms aren't favorable? The market's enthusiasm could quickly turn into disappointment. I've seen it happen countless times.

And this is the part that I find genuinely puzzling: Hims & Hers is already in the telehealth space. Why haven't they been aggressively pursuing partnerships like this all along? Are they only now realizing the potential of prescription weight loss, or were they waiting for the hype around Wegovy to reach a fever pitch?

Think of it like this: Hims & Hers is a race car, and Wegovy is a potential nitro boost. The car is already running, but everyone's excited about the possibility of it going even faster. But what if the nitro is just water vapor? What if it actually slows the car down?

The Subscriber Illusion

Let's talk about those subscriber numbers. Almost 2.5 million subscribers sounds impressive, right? Up 21% year-over-year! But what's the churn rate? How many of those subscribers are actually active users? How much revenue are they generating per subscriber? The report doesn't say. (And that silence speaks volumes.)

It's like a gym membership. A gym can boast about having thousands of members, but if only a small percentage of them actually show up and use the equipment, the business model is unsustainable. Hims & Hers needs to prove that these subscribers are more than just numbers on a spreadsheet.

I've looked at hundreds of these filings, and this particular omission is troubling. Are they hiding something, or are they simply not tracking these metrics closely enough? Either way, it's not a good look.

Marketing Hype or Sustainable Growth?

So, what's the verdict? Is Hims & Hers a legitimate growth story, or is it just clever marketing? The answer, as always, is somewhere in between. The company is clearly growing, but the growth isn't as impressive as the headlines suggest. The potential Wegovy deal is a wildcard, but it's far from a sure thing. And the lack of transparency around subscriber metrics is a red flag.

The market is currently giving Hims & Hers the benefit of the doubt, but that could change quickly. Investors need to look beyond the surface-level numbers and ask the tough questions. Is this company building a sustainable business, or are they just chasing the latest trends?

A House Built on Sand?