Hims & Hers Health, Inc.’s HIMS investors are reaping some gains from the stock of late. Shares of the San Francisco, CA-based health and wellness platform have gained 31.1% since Nov. 1, outperforming the industry’s 14.6% gain. In the same time frame, the stock outperformed the sector and S&P 500’s 0.6% decline and 4.6% growth, respectively. The company reported its third-quarter 2024 earnings on Nov. 4.
Another major development from HIMS in recent months includes the announcement of access to the most common compounded GLP-1 subscriptions for $99 monthly for eligible U.S. military, veterans, teachers, nurses and first responders (in September).
The company reported robust improvement of the top and bottom lines in the third quarter of 2024. Strength in both Online and Wholesale revenue channels and increase in Subscribers, Monthly Online Revenue per Average Subscriber, Average Order Value and Net Orders during the quarter were also recorded.
HIMS Price Comparison Since Earnings
Image Source: Zacks Investment Research
Per management, HIMS’ model is rapidly gaining scale, thereby driving top-line growth, improving profitability and strong cash flow. On theearnings call management confirmed that the company launched access to personalized titration schedules and dosing for semaglutide within weight loss during the third quarter.
Over the past three months, Hims & Hers’ share price has gained 72.9%. During the same time frame, the stock’s performance has remained strong compared with its peers like Teladoc Health, Inc. TDOC and Abbott Laboratories ABT. TDOC’s shares have gained 42.9%, while ABT’s shares have gained 5.9% in the same time frame.
Despite several challenges within the health and wellness market, including workforce-related complications and health epidemics or pandemics, the favorable estimates indicate that the company might be able to maintain the positive market momentum at present.
HIMS expects revenues for the fourth quarter of 2024 and the full year in the bands of $465 million-$470 million (reflecting an uptick of 89-91%) and $1.460 billion-$1.465 billion (representing growth of 67-68% from 2023 levels), respectively. The Zacks Consensus Estimate for the time frames is currently pegged at $470.2 million and $1.47 billion, respectively. The estimates indicate 90.7% and 68.1% improvements, respectively, from the year-ago and comparable 2023 periods.
Hims & Hers has a unique mix of a clinically-focused electronic medical record system, digital prescriptions and cloud pharmacy fulfillment, each with multiple growth drivers promising robust growth potential.
During the third quarter of 2024, Hims & Hers continued to focus on adding net new subscribers and expanding its offerings, and the progress is evident so far. On top of this, the stock seems well-positioned to navigate through the current macroeconomic climate.
HIMS’ Strong Fundamentals Weigh In
Hims & Hers is consistently witnessing strong market acceptance of its range of curated prescription and non-prescription health and wellness products and services. The company has been focusing on providing access to high-quality, personalized solutions at an affordable price. This is significantly driving the number of net subscribers.
The company ended the third quarter of 2024 with 2 million subscribers (up 43.5% year over year), adding more than 180,000 net subscribers to the platform. HIMS’ subscriber base, excluding GLP-1s, grew approximately 40% year over year. Per management, continued innovation across the company’s portfolio of personalized solutions was a key catalyst behind this expansion.
Hims & Hers believes that the growing emphasis on personalized solutions, along with the maturation of newer customer groups introduced to favorable pricing models, is enhancing its retention rates. Additionally, the company is witnessing continued success in acquiring customers through more cost-effective channels as awareness of the Hims & Hers brands grows.
On the third-quarterearnings callthis month, management shared its plan to bring liraglutide, the first generic GLP-1 in the market, to the platform in 2025. HIMS expects to complete test and batch validation and confirm certificates of authenticity over the next few months. The company also feels that as it continues to broaden the variety of solutions across specialties and elevate the number of multi-condition personalized treatments, the number of multi-condition subscribers will continue to increase. In 2025, management expects to elevate the consumer experience for Hims & Hers’ multi-specialty subscribers through technological advancements on its platform.
HIMS’ International Expansion
Hims & Hers’ strong brand and digital-first, cloud-based business model has driven rapid adoption in the United States. Additionally, the company’s model has been developed to be scalable and applicable across new markets and languages. It expanded into the UK in early 2021 and, in June 2021, completed its acquisition of U.K.-based Honest Health Limited, which is now Hims & Hers UK Limited (“HHL”), a company that offers health and wellness products and services.
The acquisition of HHL has allowed HIMS to expand its operations in the UK further. Management expects its model will afford the company further international expansion opportunities in Europe and beyond.
HIMS’ Stock Valuation
HIMS’ forward 12-month P/S of 2.9X is lower than the industry’s average of 3.6X but is higher than its five-year median of 2.5X.
Image Source: Zacks Investment Research
Estimate Movement
Estimates for Hims & Hers’ 2024 earnings have surged 175% north to 55 cents in the past 60 days.
Image Source: Zacks Investment Research
Our Final Take
There is no denying that Hims & Hers sits favorably in terms of core business strength, earnings prowess, robust financial footing and global opportunities. The Zacks Rank #3 (Hold) stock’s strong core growth prospects present a good reason for existing investors to retain shares for potential future gains despite the current slump in share prices. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For those exploring to make new additions to their portfolios, the valuation indicates superior performance expectations compared with its industry peers. It is still valued lower than the industry, which suggests potential room for growth if it can align more closely with overall market performance. However, if investors are already holding the stock, it would be prudent to hold on to it at present. The favorable Zacks Style Score with a Growth Score of A suggests continued uptrend potential for HIMS.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>Abbott Laboratories (ABT) : Free Stock Analysis Report
Teladoc Health, Inc. (TDOC) : Free Stock Analysis Report
Hims & Hers Health, Inc. (HIMS) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
