Hims & Hers Health (HIMS) is turning heads, making substantial strides, and grabbing investors’ attention. Its strategy centered on the innovative use of technology and targeted marketing initiatives for millennials and Gen Z has delivered tremendous growth. The company recently reported 77% year-over-year revenue growth and a subscriber base of over 2 million strong. Its business model is also continuously evolving, with the potential introduction of an off-patent version of Novo Nordisk’s GLP-1 weight loss therapy in 2025.
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The company’s success has piqued the interest of institutional investors, who have been increasing their stakes. The stock is up over 74% in the past three months, and the company’s potential for further growth makes HIMS a compelling option for investors interested in riding the telehealth wave.
Hims & Hers’ Upcoming Offering
Hims & Hers Health is a telehealth company that offers personalized wellness solutions across several specialties, including sexual health, dermatology, mental health, and weight loss. It utilizes technology to deliver affordable and accessible healthcare services.
An upcoming offering that has grabbed attention is an off-patent version of Novo Nordisk’s weight loss therapy, Liraglutide, marketed as Victoza and Saxenda for diabetes and obesity, respectively, to be brought to the platform in 2025. This addition is already in progress, with a core supplier confirmed and certificate authentication activities to be completed in the coming months.
This strategic move follows the company’s successful launch of compounded versions of Novo Nordisk’s (NVO) popular weight loss therapy Semaglutide, marketed as Wegovy, launched in May at a significantly discounted price. These continued growth initiatives and product offerings maintain Hims & Hers Health’s position as a leader in the telehealth industry.
Hims & Hers’ Recent Financial Results
The company recently reported results for the third quarter of 2024. Revenue was $401.6 million, marking an impressive 77% increase year-over-year from $226.7 million in Q3 2023. However, the gross margin experienced a minor dip, coming down to 79% in Q3 2024 from 83% in the same period the previous year. Net income improved to $75.6 million, a dramatic change from a net loss of -$7.6 million in the same period last year. Adjusted EBITDA increased significantly, reaching $51.1 million vs. $12.3 million in Q3 2023.
The net cash produced by operational activities stood at $85.3 million, a substantial increase from $25.2 million in Q3 2023. Finally, free cash flow also increased, rising to $79.4 million in Q3 2024 from $19.3 million in the same quarter the preceding year. GAAP earnings per share (EPS) of $0.32 beat consensus expectations by $0.21.
Following third-quarter earnings, HIMS’ management has issued guidance for Q4 2024. It forecasts revenue to be $465 million to $470 million, with an adjusted EBITDA range of $50 million to $55 million and an EBITDA margin of 11% to 12%. For 2024, they project total revenue between $1.460 billion and $1.465 billion and an adjusted EBITDA of $173 million to $178 million, reflecting a steady adjusted EBITDA margin of 12%.
Is HIMS Stock a Buy?
The stock has been on an upward trend, climbing roughly 300% over the past year. It trades at the high end of its 52-week price range of $6.68 – $25.74 and shows ongoing positive price momentum by trading above all major moving averages. The P/S ratio of 5.11x reflects a premium to the Household & Personal Products industry average of 2.9x, suggesting its robust growth is being priced in.
The stock’s positive momentum has attracted institutional investors like Robeco Institutional Asset Management, Diversify Advisory Services, and Bridgewater Associates, all of whom have increased their stake in HIMS. Further boosting confidence, Wall Street analysts like Jonna Kim at TD Cowen and Seaport Research analyst Aaron Kessler, a five-star analyst according to Tipranks’ ratings, have raised their price targets for HIMS, citing the company’s potential for sustained growth and margin expansion.
Based on 12 analysts’ most recent recommendations, Hims & Hers Health is rated a Moderate Buy overall. The average price target for HIMS stock is $24.25, representing a potential downside of -13.02% from current levels.
Final Thoughts on HIMS
Hims & Hers’ impressive revenue and subscriber base growth are capturing investors’ attention. Institutional investors are increasingly backing HIMS, which has seen its stock rise by over 74% in the last three months. The company’s focus on innovative, personalized healthcare solutions and its anticipation of telehealth trends make it a potentially lucrative investment choice for those eager to capitalize on the flourishing telehealth industry.
