Hims (HIMS) Stock: Cedar Grove’s Paul Cerro Explains His Bull Case

On this episode of Yet Another Value Podcast, host Andrew Walker interviews Paul Cerro of Cedar Grove Capital about his unusually turbulent history with Hims (HIMS). Cerro tells listeners he has been long, then short, and now long again in the stock, and says he made money in all three phases. He frames this as a sign that something real is happening at the company, even as his risk view keeps changing.

Cerro discloses that he previously worked at Ro, a direct competitor to Hims, leaving in January 2022. He argues this operating background gives him more insight into the telehealth model than most public-market commentators, though he emphasizes he has no non-public information. Walker repeatedly stresses that nothing in the episode is investment advice.

As of the August 7, 2026 publication date, Cerro’s central claim is that Hims is in the middle of a business-model transition the market is underappreciating. While he criticizes management, questions some accounting practices, and says bluntly he “wouldn’t trust the CEO to walk [his] dog,” he still believes the stock is attractive because the underlying unit economics and strategic direction are compelling in his view.

Cerro explains that his original long position in Hims in 2024 was based on the broad “cash-pay telehealth” opportunity, not on GLP‑1 weight-loss drugs. He saw Hims as one of a few scaled players proving that many services and drugs can be cheaper and simpler when sold directly for cash, bypassing the U.S. insurance maze he calls “bananas.” In his view, Hims’ early success confirmed this thesis.

He then turned short in 2024–2025 as compounded GLP‑1s exploded at Hims and drove what he calls “blockbuster” growth. Cerro says he always viewed compounded GLP‑1s as a temporary loophole: U.S. rules allow compounding only while the FDA declares a shortage. When his channel checks across roughly “18 different states” and “32 cities” showed next- or same‑day availability for the reference drug, he concluded the shortage — and thus the compounding party — was about to end.

According to Cerro, Hims’ CEO publicly suggested they would keep making compounded GLP‑1s even after shortages ended, which he found alarming from a compliance standpoint. Once the FDA declared the shortage over in February 2025 and Novo Nordisk sued Hims for IP infringement, he believed the market would re-rate a business he thought was over‑indexed to GLP‑1s and slowing in its “core” categories.

Cerro says he covered his short after Q1 2026 results, once litigation risk eased and the Novo Nordisk case was dismissed without prejudice. He argues that his original 2024 bull thesis is resurfacing in a different form: not as a GLP‑1 dispenser, but as a broader platform built around labs, hormones, menopause, and eventually richer patient data.

A key building block in Cerro’s thesis is Hims’ cash-pay model. He and Walker contrast it with the traditional U.S. system where ambulance rides can cost around “$2,000” out-of-pocket and hospital procedures often start with inflated list prices, then get “negotiated” down by insurers. Cerro claims that by skipping insurers and their intermediaries, cash-pay telehealth can act like a “Walmart everyday low price” for certain drugs and services, with simple, flat pricing.

He notes that Hims has publicly shown marketing payback periods around “six months” for customers acquired through its online channels, with Walker paraphrasing that if customers stay for a year the company roughly “doubles” its money on those cohorts. Cerro calls Hims’ ability to market efficiently to consumers on platforms like Facebook and Instagram “table stakes,” but still foundational to the story.

What he thinks is underappreciated is Hims’ push into labs and new verticals such as testosterone and menopause, launched around September–October 2025 by his timeline. He argues that labs and ongoing hormonal care give Hims more patient touchpoints and data, which can both:

• Improve clinical outcomes and personalization, making patients “feel more heard.”
• Extend customer lifetimes, pushing churn down and lifetime value up.

Cerro also highlights the recently closed Eucalyptus acquisition in June 2026, stating that management has already guided to fold a “few hundred million dollars” of additional 2026 revenue from that deal into updated guidance. He expects this to be offset by weaker EBITDA, since he believes Eucalyptus is not yet profitable.

Cerro is explicit that his bullishness comes with material caveats. He questions Hims’ management, going so far as to say he would not trust the CEO “to walk [his] dog.” He and Walker also mention “questions on ad backs,” hinting at skepticism around profitability metrics and non‑GAAP adjustments, though they do not walk through line‑item accounting in detail.

His GLP‑1 experience is a major risk lesson in his narrative. He describes Hims’ 2024–early 2025 growth as overly tied to compounded GLP‑1s, a revenue stream he believed had a clear expiration once FDA shortages ended. He points out the stock “memed from like 25 to $72” per share into the end of the shortage, then “immediately crashed,” reinforcing his view that the market had been pricing a fragile, loophole‑dependent business.

Regulatory and legal risk remain front and center in Cerro’s mind. He notes that Novo Nordisk’s IP lawsuit was dismissed “without prejudice,” meaning, as he interprets it, that it could be re‑filed if Hims “steps out of line” again on GLP‑1 practices. He and Walker also allude to the FDA being “not too happy” about compounding behavior in the space.

On competition, Walker raises concerns about devices like Whoop and Oura, tech giants like Apple and Google, and retailers such as Amazon, CVS, Walgreens, Walmart, and Costco. Cerro responds that brick‑and‑mortar pharmacies are tied up fighting their own insurance‑reimbursed battles, while Hims is focused purely on cash-pay. He acknowledges that Amazon and large chains have the balance sheets to try telehealth, but notes prior failed or scaled‑back initiatives as evidence that capital alone does not guarantee success.

Walker asks Cerro how he is thinking about near‑term earnings, noting that Hims reports after the close on August 10 and that the stock has traded with implied volatility around “100 vol.” Cerro says he is mainly focusing on already disclosed guideposts and how they will be updated.

According to Cerro, Hims’ 2026 revenue and EBITDA guidance from Q1 did not yet factor in the Eucalyptus deal, which closed in June 2026. He predicts that, all else equal, revenue guidance should move higher by a few hundred million dollars as Eucalyptus is consolidated, while EBITDA guidance should move lower to reflect Eucalyptus’ lack of profitability.

Beyond headline numbers, he sees three operational indicators as critical:

• How a “full quarter” of the Novo Nordisk partnership flows through Hims’ financials.
• The ramp in labs, testosterone, and menopause offerings launched in late 2025.
• Any evidence that subscriber growth and retention are improving after what he describes as “barely” growing subscriber counts over the prior three quarters.

Cerro reiterates that, in his view, the long-term story hinges less on any single drug (GLP‑1s, peptides, or otherwise) and more on whether Hims can become a sticky, data‑rich platform across multiple conditions. He believes the company can afford to adopt an “Amazon‑like” willingness to sacrifice near‑term margins — through price cuts or aggressive marketing — because its balance sheet is currently strong enough to support a long‑term land‑grab, though Walker voices concern that such thinking might not carry the same moat‑building power in telehealth as it did in logistics and retail.