Hims & Hers Health (NYSE: HIMS), a telehealth platform, has seen a steep decline recently, with its stock plunging 60% from February highs of over $70 to below $30. Long-term investors may find this familiar—HIMS has experienced similar dramatic drops before. During the 2022 inflation surge, the stock fell 87%, and in 2020, it dropped 77%.
Amid shortages of weight loss drugs from Eli Lilly and Novo Nordisk, HIMS benefited by offering compounded versions. Now that supply constraints have eased, HIMS has transitioned to offering branded medications through its telehealth services, including Eli Lilly’s in-demand Zepbound. For those seeking upside with lower volatility than individual stocks, take a look at the High-Quality portfolio, which has beaten the S&P 500 with returns exceeding 91% since its inception.
HIMS numbers tell a compelling story:
- Revenue has grown at an average of 76.2% annually over the past three years
- Revenue surged 69.3% in the past year, climbing from $872 million to $1.5 billion
- Operating margins remain modest at 4%, but adjusted EBITDA margin is 12%, and cash margins are 17%
- Debt levels are minimal (debt-to-equity ratio below 1%)
- The company holds $300 million in cash, with a 42% cash-to-assets ratio
Looking Ahead
Several growth indicators look promising. Total subscribers on the Hims & Hers platform have soared from 0.5 million in 2021 to 2.2 million today. Additionally, average revenue per subscriber has risen from $51 to $64 during the same period. With expanding offerings driving subscriber growth, the company expects 2025 sales to grow 58% to $2.35 billion. Despite recent market turbulence, analysts still peg the average price target at $45—implying a potential 50% upside from current levels.
Markets can remain volatile, and fear often clouds judgment. However, for long-term investors, HIMS’ strong financials and growth outlook may reward patience. For those seeking reduced risk, a more balanced investment approach like the Trefis Reinforced Value Portfolio, which has outperformed its all-cap benchmark, could offer more stability while still tapping into potential gains. Why is that? This portfolio’s quarterly rebalancing of large-, mid-, and small-cap stocks enables it to capture gains during rallies while cushioning downside risks, as outlined in the RV Portfolio performance metrics.
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