Hims & Hers Stock Falls 9% After $350 Million Leveraged Acquisition
NEW YORK, May 19 —
Hims & Hers raised $350M in debt to buy Eucalyptus and fund an AI push, then lost ~9% in a single session.
- HIMS fell ~9% on May 18, closing at $22.29, after the company announced $350M in new debt and an unpriced AI build-out in the same transaction
- At 15.3x fwd P/E on $2.4bn TTM revenue, the stock carried a multiple suited to a capital-light domestic platform — not a leveraged acquirer running two simultaneous build-outs
- Watch: post-deal debt/EBITDA and management's first synergy targets — those two disclosures will determine whether the multiple holds or falls further
What Actually Happened
The debt raise was upsized before landing at $350M — that revision is the first tell. Deals rarely get more expensive in ways that benefit the acquirer. The detail most coverage will miss: Hims & Hers is not funding one bet. It is funding two. The Eucalyptus acquisition and an AI initiative land in the same announcement, backed by the same $350M tranche. Integration costs and AI infrastructure spend will run at the same time. The interest clock starts before either investment has returned a dollar. Against $2.4bn in TTM revenue, this is a significant leverage event, not a line-item footnote.
The Catch
HIMS at 15.3x fwd P/E carried a multiple for a focused domestic telehealth operator with clean books. A leveraged acquisition paired with a simultaneous AI build-out changes that picture. Companies running two expensive programs at once tend to see lower multiples — and the 9% drop may not be the last adjustment. The AI component adds costs before it adds revenue. That cuts into near-term earnings at precisely the moment the balance sheet got heavier.
Bottom Line
Growth investors who owned HIMS for its domestic DTC business now hold a harder story to model than they did 48 hours ago. The $350M debt raise clouds every earnings forecast until management discloses post-deal leverage and synergy targets. At $22.29, the stock price requires clean delivery on two concurrent programs — a higher bar than a single-focus business. Value investors have a cleaner entry once the leverage ratio is public. Until then, the one number that sets the tone: debt/EBITDA after deal close.
For context on how a prior HIMS event moved the stock, see Hims & Hers' weight-loss pivot and 15% swing.
For a full breakdown of Hims & Hers' financials, business model, and competitive position, generate a Basis Report at /stock/hims.
Basis Report does not hold positions in securities discussed. This is not investment advice.