Hims & Hers Health, the tele-pharmacy known for offering generic versions of popular weight-loss drugs, saw its stock plummet in after-hours trading, despite reporting results that largely met Wall Street expectations and issuing optimistic guidance for the future. The company posted earnings per share (EPS) of $0.12, just ahead of the $0.11 that analysts polled by FactSet had predicted. It also surpassed revenue expectations, generating $481.1 million in the fourth quarter, compared to the $470.3 million analysts had forecasted.

Looking ahead, Hims & Hers provided a positive outlook, projecting first-quarter 2025 revenue between $520 million and $540 million—well above the $497 million that analysts had anticipated. This marks the fifth consecutive quarter of profitability for the company, which turned a profit throughout 2024. Yet, despite these encouraging numbers, investors reacted negatively, sending the stock down more than 15% in after-hours trading.

The main reason behind the market's disappointment likely stems from the recent announcement by the U.S. Food and Drug Administration (FDA), which declared that semaglutide— the active ingredient in Novo Nordisk's Ozempic and Wegovy—is no longer in short supply. This news poses a significant challenge for Hims & Hers, which had been capitalizing on the drug’s scarcity by selling its own versions. With the shortage officially over, the FDA has limited Hims & Hers' ability to sell identical copies of semaglutide unless the company modifies the formula.

In response, Hims & Hers CEO Andrew Dudum stated that the company plans to continue offering compounded semaglutide through “personalized treatments.” The company clarified in its shareholder letter that it can still sell "personalized titration schedules and dosage levels" that do not directly copy the commercially available drugs. However, in a footnote repeated several times, the company cautioned that the FDA's decision could constrain its ability to offer compounded semaglutide once its current inventory runs out.

While the company did not provide specific revenue figures for its weight-loss drug sales, it did reveal that $1.2 billion of its $1.4 billion revenue in 2024 came from non-GLP-1 (weight-loss) drugs. This suggests that approximately $200 million of Hims & Hers’ revenue last year was generated from selling copycat weight-loss medications. With the regulatory landscape shifting, the company's future ability to capitalize on this lucrative market remains uncertain, which may have contributed to the sharp after-hours decline in its stock.

When will Walmart’s struggle with US momentum stocks come to a close?

This marks its worst single-day loss of 2025 so far, reflecting a broader trend of weakness within the sector. The timing couldn’t be worse for banks, which had recently become a hot investment target. Bank of America strategists noted that weekly inflows into bank stocks had reached their highest levels since the aftermath of the global financial crisis, underscoring the sector's rising popularity.

What’s particularly interesting is that, on this rough day, the KBW Bank ETF, which tracks larger banks, is underperforming its smaller counterparts in the SPDR S&P Regional Banking ETF (KRE), a trend that's unusual on days of broad market decline. This signals that the pain is disproportionately affecting the larger banks, which are typically seen as more stable during turbulent times.

Among the biggest losers, Morgan Stanley (MS) and Goldman Sachs (GS) are struggling, with shares down 1.14% and 0.48%, respectively. However, it’s JPMorgan (JPM) that has been hit hardest, with the bank showing the steepest losses in the KBW Bank Index over the past week. This slump coincides with the leak of an audio recording in which JPMorgan CEO Jamie Dimon harshly criticized work-from-home policies. The timing of this revelation has added to investor concerns, further dragging down JPMorgan's performance as the company navigates both internal and external challenges.

The US stock market seems to have lost its spark.

The iShares MSCI USA Momentum Factor ETF (MTUM), which tracks US stocks exhibiting the best risk-adjusted price momentum over the past 6 to 12 months, has recently taken a notable hit. In just the last three trading sessions, the ETF has dropped 5%, marking one of its toughest stretches in recent years. For the previous two years, this ETF typically had a daily beta of 1.16 compared to the S&P 500. This means that if the benchmark index rose or fell by 1%, MTUM would usually move by 1.16%. However, the recent downturn has seen this relationship become even more pronounced, with the S&P 500 only dropping around 2.6%, yet momentum stocks have suffered more.

Momentum stocks have been underperforming for three straight days, making it the worst-performing equity factor portfolio tracked by Bloomberg for that stretch. This is the first time since last April that the momentum factor has faced such a prolonged period of weakness. What triggered this dip? The disappointing outlook from Walmart (WMT) appears to be the spark. Despite the retailer’s history of conservative guidance, its forecast has caused some ripple effects. Walmart is one of the ETF’s largest holdings, alongside heavyweights like JPMorgan (JPM), Nvidia (NVDA), and Palantir (PLTR).

In the past three sessions, a significant portion of the ETF’s 124 holdings have seen dramatic drops. Thirteen stocks have lost double digits, and there’s a plausible fundamental story behind many of these steep declines. For example, concern about overbuilding in AI data centers has been a major factor weighing down stocks like Arista Networks (ANET), Quanta Services (PWR), Vistra (VST), GE Vernova (GEV), Constellation Energy (CEG), and Vertiv Holdings (VRT). Meanwhile, Palantir (PLTR) faces its own challenges, including CEO Alex Karp’s stock sales and potential cuts to defense spending.

But then there are other stocks whose declines are harder to explain, beyond the simple fact that the market is experiencing a rough patch. Carvana (CVNA), for instance, had a fairly solid earnings report and outlook, yet the stock still took a nosedive. Robinhood (HOOD) has erased all of its post-earnings gains, while AppLovin (APP) has seen most of its post-report surge reversed.

The downturn in the broader market, with the S&P 500 dipping below its 50-day moving average, has coincided with weaker US economic data and declining consumer confidence. This, in turn, has prompted traders to adjust their expectations, pricing in more Federal Reserve easing in the near future. However, at this stage, the current sell-off appears to be more about a momentum mauling than a full-on growth scare—though the potential for a deeper, more troubling downturn still looms.

Keurig Dr Pepper (KDP) saw a solid performance last quarter, driven by strong demand for its popular beverages, including soda and energy drinks.

The company reported adjusted earnings per share of $0.58, slightly surpassing Wall Street's expectations by a penny. Sales for the period climbed 5% year-over-year to reach $4.07 billion, coming in ahead of the $4.01 billion analysts had predicted. The positive results and investor enthusiasm gave the stock a 2% bump in premarket trading, signaling a favorable market reaction.

The key driver behind the sales beat was impressive growth in the company’s U.S. beverages division, which includes well-known brands like 7UP, Crush, Snapple, and Dr Pepper. In addition, Keurig Dr Pepper made a successful push into the energy drink market with partners like Electrolit, C4, and a recent acquisition of Ghost for over $1 billion. This diversification helped fuel a 10% increase in U.S. beverage sales, reaching $2.4 billion. The company also saw modest growth internationally, with international sales ticking up by 1% to $499 million.

On the downside, the company’s U.S. coffee segment struggled, continuing a trend from previous quarters. Sales in this segment fell by more than 2%, as price hikes were unable to fully offset the increased competition and higher input costs that have plagued the coffee industry. The company had been offering discounts and promotions to maintain customer loyalty amidst inflation, but with pressure on margins, Keurig Dr Pepper indicated that it would raise prices again in early 2025 to combat the challenges in this area.

Looking ahead, the company is optimistic about its prospects. Management is forecasting adjusted earnings per share growth in the high-single-digit range for 2025, alongside net sales growth in the mid-single-digit range. However, they did note that currency fluctuations would likely dampen their full-year growth by 1 to 2 percentage points, making it clear that there are some external challenges to navigate. Despite these headwinds, the overall outlook remains positive for the beverage giant.

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