Hims & Hers Health, Inc. HIMS delivered an earnings per share (EPS) of 32 cents in third-quarter 2024 against the year-ago period’s loss of 4 cents per share. The metric was in line with the Zacks Consensus Estimate.
HIMS’ Revenues in Detail
Hims & Hers registered revenues of $401.6 million in the third quarter, up 77.1% year over year. The figure beat the Zacks Consensus Estimate by 4.5%.
Solid revenues from both Online and Wholesale channels drove the top line.
Shares of this company gained nearly 11.4% in today’s pre-market trading.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Hims & Hers’ Segment Details
Hims & Hers’ operations consist of two channels — Online Revenues and Wholesale Revenues.
For the quarter under review, Online Revenues of $392.6 million reflected an increase of 78.7% from the year-ago quarter on a reported basis. Per management, this upside was primarily driven by offerings launched after Sept. 30, 2023, which led to growth in new Subscribers, Monthly Online Revenue per Average Subscriber, Average Order Value (AOV) and Net Orders, along with continued growth in Subscribers pertaining to offerings available in all periods presented, from whom HIMS generated recurring revenues.
During the reported quarter, Subscribers were 2 million (up 43.5% year over year), driven by offerings launched after Sept. 30, 2023, along with increased traffic to HIMS’ platform (through its websites and mobile applications). Monthly Online Revenue per Average Subscriber increased 24.1% year over year to $67 for the third quarter, primarily resulting from newer offerings introduced during the second quarter of 2024, along with changes in product mix.
As a result of growth in Subscribers, Hims & Hers generated 2.7 million Net Orders for the reported quarter (up 19.9% year over year). For the third quarter of 2024, AOV was $147 (up 48.5% year over year), driven primarily by newer offerings introduced during the second quarter of 2024 and product mixes shifting toward longer duration Subscriptions.
Wholesale Revenues totaled $8.9 million, up 27.7% year over year.
Hims & Hers Health, Inc. Price, Consensus and EPS Surprise
Hims & Hers Health, Inc. price-consensus-eps-surprise-chart | Hims & Hers Health, Inc. Quote
HIMS’ Margin Analysis
In the third quarter, Hims & Hers’ gross profit increased 69.7% to $317.9 million. However, the gross margin contracted 346 basis points to 79.2%.
Marketing expenses jumped 57% year over year to $182.3 million, while technology and development expenses increased 71.9% year over year to $21.1 million. General and administrative expenses rose 24.3% year over year to $44.6 million, while operations and support expenses increased 50.3% year over year to $47.5 million. Operating expenses of $295.5 million increased 50.9% year over year.
Operating profit totaled $22.4 million against the prior-year quarter’s operating loss of $8.6 million.
Hims & Hers’ Financial Position
Hims & Hers exited third-quarter 2024 with cash and cash equivalents and short-term investments of $254.1 million compared with $227.3 million at the second-quarter end.
Cumulative net cash provided by operating activities at the end of third-quarter 2024 was $164.7 million compared with $51.5 million a year ago.
HIMS’ Outlook
Hims & Hers has provided its revenue outlook for the fourth quarter and upped the same for 2024.
The company projects revenues for the fourth quarter of 2024 in the range of $465 million to $470 million, reflecting an uptick of 89-91% year over year. The Zacks Consensus Estimate is pegged at $424.7 million.
For the full year, the company now projects revenues in the range of $1.460 billion to $1.465 billion (representing growth of 67-68% from 2023 levels), up from the previous outlook of $1.37 billion to $1.40 billion (reflecting growth of 57-61% from 2023 levels). The Zacks Consensus Estimate is pegged at $1.40 billion.
Our Take
Hims & Hers exited the third quarter of 2024 with in-line earnings and better-than-expected revenues. The robust improvement of the top and bottom lines was impressive. Strength in both Online and Wholesale revenue channels was promising. The increase in Subscribers, Monthly Online Revenue per Average Subscriber, AOV and Net Orders during the quarter was encouraging.
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. In September, HIMS announced access to the most common compounded GLP-1 subscriptions for $99 monthly for eligible U.S. military, veterans, teachers, nurses and first responders. These raise our optimism about the stock.
However, the gross margin contracted due to rising product costs. This does not bode well for the stock.
Hims & Hers’ Zacks Rank and Key Picks
HIMS currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated DGX, ResMed Inc. RMD and Boston Scientific Corporation BSX.
Quest Diagnostics, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2024 adjusted EPS of $2.30, beating the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion outpaced the consensus mark by 3.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quest Diagnostics has a long-term estimated growth rate of 6.5%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.4%.
ResMed reported first-quarter fiscal 2025 adjusted EPS of $2.20, beating the Zacks Consensus Estimate by 8.4%. Revenues of $1.22 billion surpassed the Zacks Consensus Estimate by 2.9%. It currently carries a Zacks Rank #2.
ResMed has a long-term estimated growth rate of 14.8%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.4%.
Boston Scientific reported third-quarter 2024 adjusted EPS of 63 cents, beating the Zacks Consensus Estimate by 8.6%. Revenues of $4.21 billion surpassed the Zacks Consensus Estimate by 4.4%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 13.8%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.
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