Hims and Hers Stock (HIMS) Great Growth and Good Value (Q4 2024 Earnings)

Hims & Hers Health, Inc. (NYSE: HIMS) has emerged as a major player in the fast-growing telehealth industry, offering accessible and affordable healthcare solutions to consumers. With its innovative direct-to-consumer model, the company has experienced tremendous financial growth, reflected in its latest Q4 2024 earnings report. Boasting nearly doubled revenue, soaring earnings per share (EPS), and strong free cash flow, Hims & Hers continues to impress investors with its rapid expansion and strategic execution. Despite some regulatory challenges, the company's stock has skyrocketed over the past year, significantly outperforming the broader market. In this article, we will analyze Hims & Hers' recent financial performance, stock valuation, growth potential, and risks, ultimately determining why this stock remains a compelling investment opportunity.

About Hims and Hers

Hims & Hers Health, Inc. (NYSE: HIMS) is a leading telehealth company that provides direct-to-consumer healthcare solutions, making medical consultations and prescription treatments more accessible and convenient. Founded in 2017 by Andrew Dudum and headquartered in San Francisco, the company initially focused on men’s health products, particularly for hair loss and erectile dysfunction. Over time, it expanded its offerings to include healthcare solutions for both men and women, covering dermatology, mental health, primary care, and, more recently, weight management.

Hims & Hers operates through a digital-first model, allowing customers to consult with licensed healthcare professionals online and receive personalized treatment plans, often with medications delivered discreetly to their doors. This innovative approach eliminates many traditional barriers to healthcare, such as long wait times and high costs, making quality medical care more accessible to millions.

The company has also expanded its business through strategic acquisitions and partnerships, further strengthening its market position. With a growing customer base and a strong foothold in the telehealth industry, Hims & Hers is well-positioned for continued growth as more consumers turn to digital healthcare solutions.

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HIMS Financial Performance

According to Stockanalysis, in the fourth quarter of 2024, Hims & Hers reported revenue of $481.1 million, a 95% increase from $246.6 million in the same period of 2023. Earnings per share (EPS) for Q4 2024 stood at $0.11, a significant rise from $0.01 in Q4 2023, marking a 1,000% annual growth. The company's trailing twelve months (TTM) revenue reached $1.476 billion, up 69% from $872 million in 2023. EPS for the same period improved to $0.53 from a loss of $0.11 in the previous year. Free cash flow per share (TTM) also saw a substantial increase, reaching $0.88 compared to $0.27 in 2023, reflecting a 226% growth. Looking ahead, Hims & Hers projects revenue of $2.35 billion for 2025, a 59.86% increase from 2024, and anticipates adjusted EBITDA of $295 million, up 66.67% from $177 million in 2024. This projection makes HIMS still a good play in 2025.

HIMS Stock Price Performance and Valuation

As of February 26, 2025, Hims & Hers' stock is trading at $39.86 per share. Over the past year, the share price has surged by 288.8%, significantly outperforming the S&P 500's 17.4% increase during the same period. 

The company's price-to-sales (P/S) ratio stands at 6.02 TTM, with a forward P/S of 3.77. The price-to-earnings (P/E) ratio is 75.21 TTM, with a forward P/E of 63.91, and the price-to-free cash flow (P/FCF) ratio is 42.28 TTM. Despite the impressive stock price appreciation, these valuation metrics suggest that the stock remains reasonably priced, especially considering the company's robust growth trajectory and future earnings potential.

HIMS Growth Potential

Hims & Hers Health, Inc. has significant growth potential driven by multiple factors, including market expansion, product innovation, and strategic execution. Key factors supporting its future growth include:

• Expansion into New Healthcare Categories : Plans to expand into additional healthcare categories position Hims & Hers against larger pharmaceutical companies, enhancing its competitive edge.
• Diversified Offerings: Expanded services across multiple health specialties, including mental health, sexual health, hair care, skin care, and weight loss, addressing a broad spectrum of consumer health needs.
• Subscriber Base Expansion: The subscriber count grew by 45% year-over-year in 2024, totaling 2.2 million, indicating strong customer acquisition and retention.
• Telehealth Industry Growth: The increasing demand for virtual healthcare services positions Hims & Hers to capitalize on the expanding telehealth market.
• Technological Advancements: Utilizing AI and data analytics, the company offers personalized treatment plans, improving customer experience and outcomes.

Risks to Consider

Hims & Hers Health, Inc. faces several business risks that could impact its operations and financial performance:

• FDA Removal of Semaglutide Shortage: The company plans to cease selling compounded versions of GLP-1 drugs, including semaglutide, following the FDA's removal of semaglutide from its shortage list. This decision could affect the company's revenue streams and market position.
• Revenue Forecast Concerns: Analysts have expressed skepticism regarding the company's optimistic sales forecast, particularly the projected $725 million in 2025 sales from its weight-loss segment. The feasibility of this rapid sales acceleration is questioned amidst anticipated restrictions on compounded weight-loss drugs.
• Regulatory Oversight: The company's operations are subject to stringent FDA regulations. Changes in regulatory policies or non-compliance could adversely affect its ability to market and sell certain products.
• Product Liability Risks: The company acknowledges potential risks related to product contamination, mislabeling, or tampering, which could lead to serious injury or death. Such incidents may result in product liability claims, adversely affecting the company's reputation and financial standing.

However, Hims & Hers' proactive approach in introducing alternative weight-loss treatments and its diversified product portfolio may mitigate this risk. Additionally, the company's strong financial performance and strategic initiatives suggest resilience in navigating such challenges.

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Conclusion

Hims & Hers Health, Inc. has demonstrated exceptional growth and financial performance, driven by strategic expansions and a diversified product offering. While regulatory challenges present certain risks, the company's proactive strategies and robust market positioning provide a strong foundation for continued success. Given its impressive financial metrics, reasonable valuation, and growth potential, Hims & Hers presents a compelling investment opportunity for those seeking exposure to the burgeoning telehealth sector.