Hims & Hers: Convert offer suggests margin upside from international is unlikely

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Hims & Hers: Convert offer suggests margin upside from international is unlikely

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Hims & Hers

Convert offer suggests margin upside from

international is unlikely

Maintain Rating: NEUTRAL | PO: 28.00 USD | Price: 25.05 USD

The news: HIMS to offer ~$300MM of convertible notes 18 May 2026

This morning, HIMS announced that it intends to offer $300MM aggregate principal Equity

amount of convertible notes due 2032 in a private offering. The company said it intends

to use the proceeds to preserve financial flexibility while executing on its international

Key Changes

expansion strategy, including its proposed acquisition of Eucalyptus, which is expected

to close in mid-2026, subject to customary closing conditions. (US$) Previous Current

Price Obj. 30.00 28.00

Why it matters: Suggests margin upside is less likely

The proposed convert reinforces our view that HIMS’ near-term margin trajectory AllenResearchLutz,AnalystCFA

remains pressured with international unlikely to be positive catalyst to profitability near- BofAS

+1 646 855 4380

term. We assume the Eucalyptus upfront cash payment ($240MM upon closing – refer to allen.lutz@bofa.com

our note on the acquisition) is likely to account for a meaningful portion of the use of Dev Weerasuriya

proceeds. While the financing adds balance sheet flexibility, it also suggests a lower Research Analyst

BofAS

likelihood of upside to near-term EBITDA numbers from international expansion and +1 646 855 5707

suggests investment requirements may be higher than Street expectations. The Street dev.weerasuriya@bofa.com

currently expects 2027 EBITDA will grow to nearly $400MM, which implies either Hanna Lee

Research Analyst

positive contributions from international or significant margin accretion from the Novo BofAS