Hims & Hers Health, Inc. (Hims): A Bull Case Theory

On February 13, 2025By Littum

We encountered a Bullish dissertation At Hims & Hers Health, Inc. (Hims) on the Substack of Lorenzo’s 2 cents. In this article we summarize Bulls’ thesis about Hims. Hims & Hers Health, Inc. (HIMS) ‘s share traded at $ 43.58 per 11 February^Th. Hims’ subsequent and forward P/E were 99.05 and 90.09 respectively, according to Yahoo Finance.

A Telehealth Professional in a laboratory coat wearing a headset and talking to a patient through a tablet.

HIMS Revolutionizes Telehealth by making healthcare more accessible, affordable and personalized. Unlike Teladoc, who has struggled with profitability and scale, HIMS has successfully carved a niche in wellness, mental health, sexual health, dermatology and weight loss. The company’s direct to consumer model combined with its use of patient data (with consent) to improve treatment efficiency has led to high retention levels and customer satisfaction. By vertically integrating its operations, HIMS has strengthened its control over costs and quality of service, a strategy that has been reinforced by the acquisition of Medisource, its first 503b composite outsourcing system. This feature allows him to expand its 503A infrastructure, improve personalized offers and lock cost -effectiveness. As a result, competitive prices interfere with traditional pharmacies further as HIMS offers more affordable treatments and challenges prescription drug model.

The essence of HIMS ‘platform is the AI-driven MedMatch system that utilizes anonymized patient data to recommend highly personalized treatment plans. This creates a self-reinforcing loop-better recommendations leading to improved patient results, generating more data that improves the AI engine. The integration of AI with HIMS ‘Electronic Medical Record (EMR) system is an important differentiate that enables tailor -made treatments and greater efficiency. Investments in robotics and specialized software streamline additional operations, making him one of the most effective players in Telehealth.

Economically, Hims grows rapidly and has already surpassed Teladoc in Netto profitability despite entering the market 15 years later. The company has maintained a constant profitability, a rare feature in Telehealth, while its subscriber base has grown to over 2 million in the 3rd quarter of 2024, marking a 44% yoy increase. Recent specialties such as weight loss have driven patient-provider interactions and further strengthening its platform effect. In addition, provider storage remains unusually high, with monthly retention degrees exceeding 95%, supported by HIMS ‘safety standards and AI-driven tools that streamline workflows.

Hims’ disturbing model poses a significant challenge for established health players. Traditional pharmacies face marginpress when HIMS sells medicine directly to consumers at lower prices. Distributors and wholesalers are at risk of disinteresting as HIMS associates his own medicine. Insurance companies could see reduced demand as patients choose to pay out of the pocket of affordable Telehealth solutions. Even healthcare providers can experience fewer personal visits as virtual consultations get traction. These industry shifts emphasize the transformative influence of HIMS on the supply of healthcare.

Despite the stock’s strong YTD – up 76% – the HIMS remains underrated in relation to its growth potential. The market’s perception of an imminent slowdown, largely due to concern over a GLP-1 narcotics, seems excessive. Excluded GLP-1 still achieved 40% yoy subscriber growth in Q3, suggesting its growth path remains robust. Currently trading with only 7x revenue, HIMS is attractive priced compared to peers with similar growth rates. The company has led for turnover growth of 89-91% in the 4th quarter and strengthened its strong views. In the long term, the share prices follow the free cash flow per year. With a compelling business model, strong economic and a transformative approach to healthcare, HIMS presents a unique investment opportunity with significant upward potential.

Hims & Hers Health, Inc. (Hims) is not on our list of 30 most popular shares among hedge funds. According to our database, 31 hedge fund portfolios held HIGS at the end of the third quarter, which were 37 in the previous quarter. While we recognize the risk and potential of HIMS as an investment, our conviction lies in the belief that some AI stocks have a greater promise to deliver higher returns and do so within a shorter time frame. If you are looking for an AI stock that is more promising than HIMS but trades with less than 5 times its earnings, check out our report on Cheapest AI storage.

Disclosure: None. This article was originally published on Insider Monkey.