Is Hims & Hers Stock Ready For A Longer Cash Burn?
Hims & Hers Health (HIMS) stock has lost 46% over the past twelve months, lagging the 17.1% return of the S&P 500. A lack of sales is not the problem. Revenue grew nearly 40% in the second quarter of 2026. Yet the company spent $68 million more than it took in during that quarter. Was that one weak quarter for Hims & Hers, or could the cash keep going out?
Why Hims & Hers Could Keep Burning Cash
Hims & Hers could continue burning cash as its branded weight loss offering expands. Executives have linked that product to weaker operating cash flow. During the company’s August 10, 2026 call, they noted that the weight loss business required more working capital and described the result as a pause in operating cash flow momentum.
Profitability metrics show signs of pressure as well. The company expects the lower gross margin of the second quarter to persist through the second half of 2026. Even as executives raised their 2026 revenue outlook to $3.1 billion to $3.3 billion, they lowered their outlook for adjusted EBITDA, a profit measure.
Legal bills represent another claim on cash. Costs for the second quarter included money set aside for litigation with the FTC, which filed a complaint on July 29, 2026 after several months of settlement negotiations. A shareholder class action stemming from that complaint had followed by late September.
What A Longer Burn Would Cost Hims & Hers
A sustained period of cash burn poses less immediate risk to liquidity than the headline figure suggests. The $68 million outflow in the second quarter compares with more than $840 million of cash and short-term investments held at quarter-end. At that quarterly pace, the available cash would last about 12 quarters. Looking at the past twelve months as a whole, Hims & Hers still took in about $62 million more than it spent.
The primary risk lies in how the company might eventually replace that cash. Hims & Hers already carries $1.5 billion of total debt, a figure sitting well above its cash reserves. That total includes a convertible debt offering of over $400 million completed in the quarter, which can turn into new shares. The share count has already grown 11.2% over three years. If a prolonged burn forces the company to replenish its reserves, shareholders could face further dilution or a heavier debt load.
Adding to the equity risk is the historical volatility of the shares. The stock fell 63% from peak to trough in the 2025 tariff shock, against 19% for the S&P 500. Raising money during a similar downturn would force Hims & Hers to sell shares at a much lower price.
However, the company has established some financial flexibility. Executives set up a $400 million receivables facility, allowing Hims & Hers to turn payments it is owed into cash sooner.
What Hims & Hers Holders Should Watch Next
Investors should track free cash flow when Hims & Hers reports its third quarter of 2026. Executives guided adjusted EBITDA of $75 million to $95 million for that quarter, up from the $60 million it reported for the second. If adjusted EBITDA rises as guided and cash still goes out, the money may be going into working capital for weight loss. A free cash flow figure more negative than the second quarter’s $68 million outflow would suggest that branded weight loss is absorbing cash faster as it grows.
Does This Mean You Should Act On HIMS?
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