To The Moon

$Hims & Hers Health Inc.(HIMS)$

Hims & Hers is taking a hit in after-hours trading following the release of its Q4 earnings report. At the moment, shares are down about 16%. However, it's important to note that over the past year—and even year-to-date—the stock has seen significant gains, so this pullback may not be a major concern.

Now, let’s break down why the stock dropped 19% in after-hours trading. Yes, 19% sounds like a big number, and it might even go down 20-25%, but let's keep things in perspective: the stock is still up 103% year to date. And we’re only in February! Sometimes, we need to adjust our expectations.

A lot of people are upset because they missed out on a 20-30% gain and didn’t sell earlier. But imagine selling at $10 when it first jumped from $7 to $10—that would’ve been a massive mistake. I didn’t sell then, and I’m not selling now because I believe in the company for the long haul. It’s funny how everyone claims to be a long-term investor until their stock drops—then the panic kicks in.

In today's analysis, we'll dive deep into the Q4 results, examining the financials and fundamentals to determine whether this dip presents a buying opportunity. We'll also discuss the company's future, considering its transition from primarily a marketing-driven business to a more vertically integrated company. This shift involves expanding into manufacturing and acquisitions, which could have long-term financial implications. Currently, these efforts are not yet reflected in the financials, but they may significantly impact profitability in the future.

From a technical standpoint, this pullback could create clear buying opportunities, whether you're a short-term trader or a long-term investor.

Earnings Breakdown

Let’s talk about earnings because the company actually performed very well:

EPS Beat: $0.11 vs. $0.10 expected Revenue Beat: $481 million vs. $470 million expected. Subscriber Growth: Up 45% year over year Q4 Revenue Growth: 95% YoY—absolutely insane

One of the biggest misconceptions about Hims is that it's just a GLP-1 company. But the company reported that even excluding GLP-1 revenue, it still grew 43% in 2024 to $1.2 billion. That proves Hims is far more than just a GLP-1 play.

Another key highlight: monthly revenue per subscriber rose 38% YoY to $73. For those comparing Hims to Teladoc, keep in mind that Teladoc's revenue per member is $136, but that’s because they operate within insurance constraints that cap their profitability. Hims doesn’t have that issue—it can monetize subscribers far more effectively.

 Stock Performance & Growth

Hims & Hers has delivered exceptional returns—up 100% year-to-date and an impressive 400% over the past year. Investors are optimistic, but the key question remains: can this growth continue? In Q4, the company reported 95% revenue growth, and for Q1, guidance projects revenue between $520 million and $540 million—well above Wall Street's $494 million expectation. Similarly, full-year revenue guidance was raised to a range of $2.3 billion to $2.4 billion, exceeding prior estimates of $2.24 billion at the high end. This suggests the company is executing well and potentially even under-promising to exceed expectations later.

Market Share Dominance

A lot of people ask, What about Amazon? Can’t competitors just copy Hims? Well, let’s look at the numbers:

• Hims & Hers market share: 47.3%

• BetterHelp, a competitor in the mental health space: 11.6%

Hims is dominating. That’s not easy to replicate.

Expanding the Ecosystem

Hims is expanding into liraglutide in 2025, which will help offset any potential losses from compounded semaglutide sales. Additionally, their recent acquisition of at-home lab testing is a game changer. This move allows them to gather valuable data, monetize it like Tempus AI, and use it for clinical studies and research. The CEO has even stated that Hims is a data business in the long run—this could be a massive growth driver that most people don’t fully understand yet.

2025 Guidance & Growth Projections

Hims’ growth outlook is mind-blowing:

• Q1 revenue growth guidance: 87-94%

• Full-year 2025 revenue growth: 56-63% (analysts expected 42%)

Even after the GLP-1 shortage has been resolved, Hims is still projecting 60% growth—that’s unheard of.

Their weight loss business is expected to generate at least $725 million in 2025, accounting for about 30-35% of total revenue. But keep in mind that weight loss includes more than just semaglutide—it also includes oral solutions and upcoming products like liraglutide. Based on estimates, only 10-15% of total revenue is coming from compounded semaglutide. That means even if there were restrictions on it, it wouldn’t be a dealbreaker for the company.

Why Hims Can Still Sell Compounded Semaglutide

A major misunderstanding is that now that semaglutide is off the FDA shortage list, Hims won’t be able to sell it. That’s not true. Hims never sold the standard version of semaglutide—it sells a personalized version that modifies the dosage to reduce side effects.

When users fill out their health forms, Hims’ system analyzes side effects, medical history, and other factors to create a customized prescription. This means that even after the shortage is over, Hims can still legally sell semaglutide as a personalized treatment, which complies with FDA regulations.

Business Model & Challenges

At its core, Hims & Hers is still primarily a marketing company—similar to how Nike is a marketing powerhouse that happens to sell sneakers. The company excels at capturing market attention through creative advertising, but its marketing expenses have been significant, historically reaching up to 80% of revenue. While that figure has come down slightly, it still remains high at nearly 50% of revenue in the most recent quarter.

Now, the company is pivoting toward owning more of its supply chain, including manufacturing its own peptides and lab testing. This shift could strengthen its competitive moat, but it also introduces higher costs, more complexity, and potential execution risks. If successful, this transformation could create a much stronger business, but if not, it could lead to thinner margins and lower profitability.

Key Financial Metrics & Risks

• Profitability: The company is now fractionally profitable, with operating income reaching about 5% in Q4. This is a positive milestone, but margins remain thin.

• Marketing Spend: Still a significant portion of revenue, though gradually declining as the company scales.

• Gross Margins: Declined from 83% to 77% year-over-year, largely due to increased investments in manufacturing and in-house operations.

• Cash Flow & Balance Sheet: The company has a strong cash position with minimal liabilities, which provides financial stability. However, inventory levels have tripled in the past year, reflecting the shift toward more in-house production.

• Stock-Based Compensation: Executive compensation through stock awards remains high, nearly matching net income. The company also repurchased $83 million worth of shares, though some investors may prefer reinvestment in growth initiatives instead.

Technical Analysis & Investment Outlook

After a parabolic rise, the stock is now pulling back. If it dips into the $30 range, it could present a more attractive entry point for long-term investors. Given the rapid ascent, a more significant correction isn’t out of the question, which could provide an even better opportunity. Historically, strong growth stocks experience major pullbacks before resuming their upward trajectory—if Hims & Hers is on track to become a major player in healthcare, this pattern could play out here as well.

Valuation & Future Potential

Even after this 19% decline, Hims is trading at an $8.9 billion market cap, with 2025 sales expected at $2.4 billion—that’s just 3.7x sales. Compare that to other companies:

• SoFi trades at 6x sales

• Pinterest trades at 75x sales

Yet, Hims is growing 60-90% per year, while these companies aren’t even close to that level of growth.

Based on my long-term projections, if Hims captures 10% of the telehealth market by 2033, that would equate to $46 billion in revenue. Even at a conservative 3x sales multiple, that would value the company at $138 billion—a 15-16x return from today’s levels.

Conclusion

In conclusion, Hims & Hers is at a critical inflection point. The company has demonstrated strong growth and is now taking steps to transition beyond a marketing-driven business. If successful, this could create a much larger and more profitable company. However, execution risks remain, and valuation is still high given its current profitability. Investors should monitor how well the company manages its transition and whether it can sustain its growth while improving margins.

I personally believe the stock could dip a bit more in the short term, but fundamentally, it should not be trading at just 3x sales while growing this fast. It should be at 5x, 7x, or even 10x sales, especially in this market. For those looking to buy, the closer you can get to $30, the better.

Let me know your thoughts in the comments, and I'll see you in the next analysis. Good luck with your investments!

 @Daily_Discussion @TigerPM @TigerObserver @Tiger_comments @TigerClub

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.