A call to Hims or Hers will have skincare, hair loss, or erectile dysfunction products on your doorstep, but is HIMS a good investment? Read on to learn more about this young telehealth company.
|Hims & Hers Health, Inc.|
|Household & Personal Products|
|2269 Chestnut Street, San Francisco, CA, United States|
Want products to treat erectile dysfunction and hair loss delivered discreetly without having to visit a doctor or pharmacist in person?
A call to Hims or its female-centric counterpart, Hers, will put you in touch with specialists who can help. You’ll have the prescription and over-the-counter products such as shampoos, conditioners, skincare items, and health supplements you need on your doorstep quickly.
Care through Hims & Hers Health is expanding to dermatology and mental health, putting care as close to subscribers as their cellphones.
Hims may be worth a call for your health, wellness, and appearance, but is its publicly traded stock, HIMS, worth an investment? Here we’ll look at the pros and cons of investing in this young telehealth company.
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About Hims & Hers Health
Hims & Hers Health, Inc., was founded in November 2017 in San Francisco by Andrew Dudum to sell prescription and over-the-counter treatments for erectile dysfunction and hair loss as well as personal care products. Its market capitalization is $1.70 billion.
In about three years, HIMS revenue reached more than $148 million, thanks in part to shifts toward the ease of subscription product delivery and telehealth. The company has more than 453,000 subscribers.
The company’s chief financial officer is Spencer Lee. As of 2020, Hims & Hers Health had 181 employees. HIMS stock hit a high of more than $25 a share during the early days of the COVID-19 pandemic when consumers flocked to purchasing products online.
With health clinics shutting down for all but emergency care in March 2020, telehealth became a viable option for those seeking treatment for conditions such as hair loss and erectile dysfunction.
This drove HIMS stock higher then, but by Oct. 15, 2021, HIMS traded at $8.36 per share.
In Hims & Hers Health’s latest earnings report on Aug. 11, 2021, the company reported $.08 earnings per share for the quarter. Hims & Hers Health earned $60.69 million in the past quarter, beating the $55.94 million predicted by analysts.
Purchasing stock at a bargain price is how fortunes are made. Will buying HIMS in the $8 range see that stock price triple back to its highs of 2020 and beyond?
Here are some reasons HIMS bulls think so.
- Rated as a Hold: Wall Street experts have rated HIMS stock as a hold, meaning that investors should maintain their current HIMS positions and a buy since HIMS is at a bargain price right now. Both those ratings indicate that investment analysts think HIMS is poised to grow.
- Earnings are up: Hims & Hers Health recently beat earnings expectations, showing growth in its customer base. This steady growth indicates that HIMS’ telehealth and home delivery business model is strong even after the pandemic lockdowns ended. Consumers are finding the prescription delivery service convenient.
- Celebrity endorsements: HIMS has launched successful advertising campaigns with Tampa Bay tight end Rob Gronkowski. Hers has gotten a boost from advertising for women’s customized skincare products featuring singer-songwriter Miley Cyrus.
- Institutional investors: Retail and institutional investors, including Cullinan Associations and Berman Capital Advisors LLC are stockholders, as are Hims & Hers Health leaders, including Dudum, the founder, chairman and CEO, CFO Lee, COO Melissa Baird, and chief legal officer Soleil Boughton.
Those who bought HIMS in 2020 may have swallowed a bitter pill since the stock faced a major sell-off in the last year. HIMS bears think any climb back to those $25 highs will be long and arduous.
Follow their reasoning here.
- Competition: Hims & Hers Health faces competition from telehealth companies such as Keeps and Roman, specializing in men’s hair loss and erectile dysfunction. Teledoc and Amwell are broader telehealth companies to watch as potential investments. Amazon, with its 2018 purchase of PillPack, is entering in the market for home-delivered prescriptions.
- Stock shorting: Some investors are so bearish on HIMS that they are shorting the stock. HIMS’ current short value is more than 6.4 million shares, compared to a previous short volume of 5.67 million shares. The 13 percent rise in shorting occurred in the past month, showing a dimming view of HIMS.
- Lack of confidence in HIMS: Among those shorting HIMS stock are institutional investors, including Bluefin Capital Management, Bank of America, and Cutler Group LP. Shorting by institutional investors can indicate a lack of confidence in the stock’s ability to climb back from the abyss.
- Better investment options are available: HIMS bears may shy away from buying this stock, even at a bargain price, because there are better options out there. Other telehealth options, exchange-traded funds, growth stocks, and high-dividend stocks might provide more profits than HIMS.
Hims & Hers Competitors
While Hims & Hers Health may have its share of bears and shorters, the company is showing a stronger performance. In the second quarter of this year, subscribers were up by 16 percent from the previous quarter.
Since 2020, the number of HIMS subscribers has grown by 75 percent.
There are plenty of reasons to subscribe to HIMS beyond pandemic shutdowns. Telehealth that makes health care more affordable and accessible is growing. Who wants to sit in a doctor’s waiting room or get the bills for in-person visits?
HIMS is a more volatile stock, so it's not for the faint of heart. HIMS does not pay dividends as a younger company, so there’s no yield to speak of.
However, it’s in a better position than many young telehealth companies, with a growing list of subscribers, about $317 million in cash and investments, and very little debt. HIMS may be undervalued by investors.
Those who are risk-averse should limit HIMS exposure to having a subscription, but for those who’d like to add a stock with a large potential upside to their portfolio, HIMS has profit potential.
Should you invest $1,000 in Hims & Hers right now?
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I’m Donny. I’m a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.