Hims & Hers Health: A Rising Star in Telehealth and Wellness

Hims & Hers Health: Expecting A Healthy Report (NYSE:HIMS)

This idea was discussed in more depth with members of my private investing community, Out Fox The Street. Learn More " Hims & Hers Health (NYSE:HIMS) has slipped back down below $20 after the initial excitement over access to a GLP-1 drug solution has worn off. The online health and wellness company was hit with another short report, but the stock mostly shook off the issues addressed by the attack. My investment thesis remains Bullish on the stock over the long term, with the current price providing a good entry point as the GLP-1 compounded drugs should provide a sales boost. Since announcing Q1'24 results in early May, Hims has seen some dramatic news. The online health provider announced the availability of a compound version of Novo Nordisk's (NVO) weight loss medication, and a short report from Hunterbrook Media questioned the business practices of the company. Hims can now provide the compounded semaglutide, starting at $79 a month for an oral version and $199 for an injection. The company can offer the compounded version due to Wegovy lacking supplies to meet demand, though the compounded version isn't FDA approved or supported. The company already had weight loss offerings with a goal of reaching $100 million in sales for 2025, but the estimates never factored in the GLP-1 drugs. Not to mention, the short report points out the compounded drugs can't be sold after 60 days following the end of the FDA approved drug shortage. On top of the stock boost and unknown results from the GLP-1 drug sales, Hims was hit with the short report from Hunterbrook Media. As with other short attacks, the report is focused on headline grabbing points, but short on any substance. The GLP-1 compounded drug is the main focus in the short report, and the drug isn't even the basis of the thesis for owning HIMS. Every investor should know the drug is an untested knockoff without FDA approval. HIMS only has access to sell the compounded drug, while the name-brand GLP-1 drugs Ozempic and Wegovy are in short supply. After a 60-day period to wind down existing subscriptions, Hims hopes to convert subscribers into users of the name-brand drugs. The other major headline in the report was the claims of the supplier having ties to fraud and a shady history. In reality, Belcher Pharma had executives convicted in a fraud scheme back in 2020 unrelated to Belcher. The 2 individuals created a sham pharmacy to sell fraudulent drugs. The following snippet from the short report makes the fraud claims without merit, questioning the rest of the report. Just a year ago, Hims was hit by another short attack where Spruce Point Research predicted shares would fall 25% to 40% to $5.20 to $6.50 per share. The report claimed the health and wellness platform was using sketchy pharmacy relationships to fill prescriptions, amongst other problems. The stock ultimately trickled down the targeted price range before Hims had the big breakout and quadrupled to a high of over $25 within a year. The original short report had no meaningful impact on the stock price, with none of the issues highlighted in the Spruce Point report actually coming to fruition as any issue for the business. The investment thesis definitely isn't based on the compounded GLP-1 drugs. Hims could see a boost from these sales, though such sales aren't permanent and likely only harm comparable reports in the future, providing no benefit to the long-term financials. The only real benefit would be Hims gaining future access to actual approved GLP-1 drugs and converting the existing customers to the online platform. The prime reason to own Hims is the focus on personalized health solutions not offered by other industry players. The company has more of a most, using AI and a database to help develop and sell these personalized drugs to subscribers. Hims plans to report Q2'24 earnings on August 5 with the following expected results: Along with the Q1 earnings report, Hims guided to Q2'24 revenues of $292 to $297 million, suggesting analysts have possibly factored in very limited revenue from the GLP-1 drugs. Hims beat Q1 consensus estimates by over $9 million, placing the consensus estimates for Q2'24 more in a normal range. The injectable compound at $199/month would only require prescriptions of 5,000 to reach $1 million of money sales. The Q2 sales will be limited due to the late May launch. The bigger upside is to Q3 numbers, where 5,000 prescriptions a month would lead to $3 million in quarterly revenues. Hims only has a monthly online revenue per average subscriber of $55. Either of the GLP-1 drug compounds are substantially higher prices than what the company generates in monthly revenue per sub. Back down below $20, the stock has a market cap of $4.2 billion. Hims is no longer the major discount of when the stock traded at $6 for a market cap closer to sales estimates. The stock trades at ~3.5x 2025 sales targets of $1.6 billion. For an online health and wealth platform with 20%+ growth, Hims still trades at a bottom basement price. The key investor takeaway is that Hims had a wild Q2 and the actual sales numbers and guidance for Q3'24 could be volatile. The stock is oddly falling when the online health and wellness platform will likely report strong numbers and Hims is still cheap. Investors should use weakness to load up on the stock.

Here's My Top Growth Stock to Buy Right Now

With shares up a blistering 150% year to date, Hims & Hers Health (NYSE: HIMS) boasts everything an investor could dream of these days: rapid expansion, a vast addressable market, and a reasonable valuation. Let's explore why it is my top growth stock to buy right now, as it builds a bridge between traditional healthcare and digital commerce. Why Hims & Hers? Founded in 2017, Hims & Hers is a telehealth company that provides medical consultations, prescription drugs, and over-the-counter healthcare products online. It established its niche by focusing on more sensitive consumer needs like sexual health, birth control, and hair loss. After hitting public markets through a special-purpose acquisition company (SPAC) in 2020, Hims became a household name because of pandemic-era stay-at-home demand and its edgy marketing strategy. For investors, the company is exciting because of its disruptive business model. As a direct-to-consumer healthcare provider, it can be much more convenient than traditional in-person healthcare. And by removing middlemen (such as insurance providers and pharmacies), Hims can also offer cost savings on some of its products. The company also offers generic drugs in a variety of forms, like nasal sprays, chews, and gums. Exciting long-term growth drivers Hims' business is booming. First-quarter revenue jumped 46% year over year to $278.2 million, powered by a 41% increase in subscribers to 1.7 million. The company boasts an impressive gross margin of 82%, giving it leeway to pour money into marketing ($130.6 million in the latest period). By saturating the internet with ads, Hims can create a high level of brand recognition, which can serve as its economic moat in the telehealth industry, which may have limited barriers to entry. On the flip side, advertising is a relatively discretionary business expense that can be cut back if management wants to boost operating profitability. Image source: Getty Images. Over the long term, Hims' rapid growth and early-mover advantage can allow it to take advantage of economies of scale (buying ingredients in greater volume for lower prices) and possible network effects by monetizing anonymized user data. In May, the company released a compounded GLP-1 weight loss injection starting at $199 a month -- that's a whopping 85% less than brand-name versions of the drug like Ozempic and Wegovy, both sold by pharmaceutical giant Novo Nordisk. Hims is also working on MedMatch, an artificial intelligence (AI) based diagnostic service that could use the company's library of user data to identify treatments in real time. Is the stock still a buy? It can be uncomfortable to buy a stock that has already more than doubled in a short period. But Hims & Hers still looks like a screaming buy. The company is in the early stages of monetizing what looks to be a long-term growth opportunity. And despite being a relatively small company (market cap of $4.7 billion), it is already profitable, with first-quarter net income swinging from a loss of $10 million to a gain of $11.1 million. With a price-to-sales (P/S) multiple of 5.2, Hims' stock is pricier than the S&P 500 average of around 3. But this premium looks fair considering its compelling business model and solid long-term potential. Should you invest $1,000 in Hims & Hers Health right now? Before you buy stock in Hims & Hers Health, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Hims & Hers Health wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $722,626!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Will Ebiefung has positions in Hims & Hers Health. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Here's My Top Growth Stock to Buy Right Now

Hims & Hers shares have multi-bagger growth potential over the years to come. With shares up a blistering 150% year to date, Hims & Hers Health (HIMS -4.66%) boasts everything an investor could dream of these days: rapid expansion, a vast addressable market, and a reasonable valuation. Let's explore why it is my top growth stock to buy right now, as it builds a bridge between traditional healthcare and digital commerce. Why Hims & Hers? Founded in 2017, Hims & Hers is a telehealth company that provides medical consultations, prescription drugs, and over-the-counter healthcare products online. It established its niche by focusing on more sensitive consumer needs like sexual health, birth control, and hair loss. After hitting public markets through a special-purpose acquisition company (SPAC) in 2020, Hims became a household name because of pandemic-era stay-at-home demand and its edgy marketing strategy. For investors, the company is exciting because of its disruptive business model. As a direct-to-consumer healthcare provider, it can be much more convenient than traditional in-person healthcare. And by removing middlemen (such as insurance providers and pharmacies), Hims can also offer cost savings on some of its products. The company also offers generic drugs in a variety of forms, like nasal sprays, chews, and gums. Exciting long-term growth drivers Hims' business is booming. First-quarter revenue jumped 46% year over year to $278.2 million, powered by a 41% increase in subscribers to 1.7 million. The company boasts an impressive gross margin of 82%, giving it leeway to pour money into marketing ($130.6 million in the latest period). By saturating the internet with ads, Hims can create a high level of brand recognition, which can serve as its economic moat in the telehealth industry, which may have limited barriers to entry. On the flip side, advertising is a relatively discretionary business expense that can be cut back if management wants to boost operating profitability. Over the long term, Hims' rapid growth and early-mover advantage can allow it to take advantage of economies of scale (buying ingredients in greater volume for lower prices) and possible network effects by monetizing anonymized user data. In May, the company released a compounded GLP-1 weight loss injection starting at $199 a month -- that's a whopping 85% less than brand-name versions of the drug like Ozempic and Wegovy, both sold by pharmaceutical giant Novo Nordisk. Hims is also working on MedMatch, an artificial intelligence (AI) based diagnostic service that could use the company's library of user data to identify treatments in real time. Is the stock still a buy? It can be uncomfortable to buy a stock that has already more than doubled in a short period. But Hims & Hers still looks like a screaming buy. The company is in the early stages of monetizing what looks to be a long-term growth opportunity. And despite being a relatively small company (market cap of $4.7 billion), it is already profitable, with first-quarter net income swinging from a loss of $10 million to a gain of $11.1 million. With a price-to-sales (P/S) multiple of 5.2, Hims' stock is pricier than the S&P 500 average of around 3. But this premium looks fair considering its compelling business model and solid long-term potential.