Hims & Hers Health (HIMS) is outperforming and posting numbers that make you wonder why anyone still doubts the stock’s longevity. Bears have long scoffed at its telehealth model, hammering the stock down to $25 just last month. Yet yesterday’s Q1 results were a masterclass in defiance, with eye-popping revenue and profit growth that sent shorts scrambling. Stock bears are still hanging on, but given how cheap the stock has become, a run towards $100 per share may be coming sooner than most expect.
Following yesterday’s 5% jump, the stock is almost 30% higher since the end of last week. With a strong confluence of bullish factors in play, I remain bullish on HIMS stock while remaining cognizant of the potential risks overshadowing it.
Quarterly Results Indicate the Birth of a Juggernaut
HIMS delivered a Q1 revenue haul of $586 million, up 111% year-over-year, crushing Wall Street’s $538.9 million estimate by a cool $47.1 million. The drivers? A 38% surge in subscribers to 2.4 million and a 53% spike in monthly revenue to $84 per subscriber.
During the earnings call, management spotlighted their weight loss segment, turbocharged by a partnership with Novo Nordisk (NVO) for branded Wegovy. New specialties like menopause and hormonal treatments are also gaining traction, with 1.4 million subscribers now opting for personalized solutions.
What’s fueling all this is, of course, HIMS’ vertically integrated platform, which traverses from telehealth to pharmacy, all while keeping costs lean and innovation swift. Their bold Super Bowl ad for affordable GLP-1 treatments cemented their brand in consumers’ minds.
Moreover, CEO Andrew Dudum leaned into their data-driven personalization, noting it’s not just driving growth but locking in loyalty, with retention rates climbing as subscribers engage across multiple care categories.
Hims & Hers Profits Steal the Show
If revenue was the main act, profitability was the encore. Adjusted EBITDA nearly tripled to $91.1 million, boasting a 16% margin from $32.3 million a year ago. Net income soared to $49.5 million, which also came in crazy high compared to $11.1 million last year. Finally, free cash flow exploded 321% to $50.1 million, with $323 million in cash, short-term investments, and virtually no debt providing a fortress-like balance sheet.
The bottom line success stemmed from smarter marketing, now down to 39% of sales, and higher average order values as users embrace multi-condition solutions. The shift to premium daily products in sexual health, now 40% of that segment, has boosted margins, too, even if it’s caused some short-term volatility.
The 2030 Roadmap to Sustained Growth
More importantly, HIMS affirmed its 2025 sales guidance of ~$2.4 billion and upped adjusted EBITDA to $295-$335 million. Furthermore, in 2030, the telehealth spearhead is targeting a bold $6.5 billion in revenue and $1.3 billion in adjusted EBITDA. If these figures look a bit ambitious, don’t forget that HIMS has a history of smashing targets, hitting its initial 2022 goals quarters ahead of schedule.
The plan hinges on new offerings, as weight loss market capitalization is projected to hit $725 million in 2025, with launches like liraglutide and personalized semaglutide. Menopause and hormonal treatments are next, with two new verticals planned annually. Strategic tie-ups, like with Novo Nordisk, and early steps into international markets round out their five-pronged strategy, alongside some tech investments in diagnostics. Such a powerful momentum and execution mix is unique.
HIMS’ Valuation Set for a Rerating
Post-earnings, HIMS shares have bounced. However, at an ~$11 billion market cap, they remain a steal, in my view. With 2025 revenue guidance of $2.3-$2.4 billion, the P/S ratio sits at 4.6x, which is laughably low for a company growing in the triple digits. The P/E, based on annualized Q1 EPS, is around 56x, but with profits tripling, that’s still a bargain, as the ratio will quickly move down in the coming quarters.
The market frets about regulatory risks, such as the FDA’s semaglutide shortage resolution in February 2025, forcing a pivot to branded GLP-1s, or potential lawsuits in telehealth’s gray areas. However, market bulls will claim that HIMS is playing it straight, leaning on partnerships with industry giants to stay compliant. These concerns feel like noise when you see HIMS consistently obliterating estimates.
For these reasons, I think that a valuation rerating, paired with its growth trajectory, could catapult shares to $100, especially given the possibility of an imminent short squeeze. Remember that short interest still hovers close to 28% of the company’s stock float.
Is HIMS a Buy, Hold, or Sell?
Despite its stellar results, Wall Street analysts remain apprehensive about HIMS stock. Over the past three months, HIMS has gathered four Buy, eight Hold, and two Sell ratings, forming a Hold consensus on Wall Street. HIMS stock carries an average price target of $45.54, implying a ~13% downside potential from current price levels.
Hims & Hers Growth Story Remains Too Cheap to Ignore
Hims & Hers is crafting a growth story that’s tough to overlook. In its latest quarter, the company delivered across the board, with revenue climbing, profits accelerating, and an ambitious vision set for 2030.
Given its strong momentum, the current valuation looks unusually cheap, making the upside potential especially compelling. While some regulatory concerns remain in the background, HIMS’ track record shows it has the resilience to overcome them. As a result, I have no plans to sell my shares in what I view as a promising long-term compounder.