#91 Hims & Hers - A reality check
High-Growth Health Disruptor or Hype Train?
Hims & Hers: High-Growth Health Disruptor or Hype Train?
Hims & Hers Health (NYSE: HIMS) HIMS 0.00%↑ has been one of the hottest names in digital health, riding a wave of bullish sentiment. The direct-to-consumer telehealth platform – known for hair loss meds, ED treatments, and more – just posted explosive growth in its latest earnings. But is this growth sustainable, or are investors overlooking serious risks?
In this deep dive, we’ll break down Hims & Hers’ financial health, business model, recent developments, competition, and potential red flags. Let’s separate the impressive facts from the market hype, in plain English.
Rocketing Revenue and Financial Health
By the numbers, 2024 was a blockbuster year for Hims & Hers:
Revenue: $1.48 billion for full-year 2024, up 69% from 2023. Q4 2024 alone nearly doubled year-over-year to $481 million (+95%).
Subscribers: 2.23 million active subscriptions at 2024’s end, up 45% vs. 2023. The company has more than doubled its subscriber count in two years.
Profitability: Achieved net income of $126 million in 2024 (boosted by a one-time tax benefit. Even excluding that benefit, Hims & Hers moved from a $(23.5)M$ loss in 2023 to solidly in the black. Adjusted EBITDA hit $177M, and Q4 GAAP EPS was $0.11.
Margins: Gross margin was ~79% for 2024, down a bit from 82% in 2023. Notably, Q4 gross margin dipped to 77% (from 83% a year prior), partly due to a new (lower-margin) weight-loss product line.
Cash Flow & Balance Sheet: Hims & Hers is generating cash – Q4 2024 free cash flow was ~$59.5M. Cash on hand swelled to $300M (cash + short-term investments) by end of 2024, and the company carries no debt. In fact, it’s confident enough to have authorized a $100M share buyback, even repurchasing a few shares in Q4.
So financially, things look strong. Revenues are soaring, and Hims & Hers has crossed into profitability, a rarity for telehealth startups. High gross margins (~80%) indicate the core business (selling meds and consultations online) is inherently lucrative. The company’s 2025 guidance projects $2.3–2.4B revenue (another ~56% growth) and improving margins (Adj. EBITDA margin ~12–13%).
But before we pop the champagne, we need to understand how Hims & Hers makes its money – and whether those growth drivers are built to last.
A Closer Look at the Business Model
Hims & Hers runs a direct-to-consumer telehealth platform that makes it easy (and often fun) to get treatment for somewhat “embarrassing” health issues. The model looks like this:
Online Consult + Prescription: Customers go to Hims (for men) or Hers (for women) websites/apps, fill out a health questionnaire, and connect with a licensed medical provider. It’s usually an asynchronous consult (no live doctor visit needed for most conditions).
Affordable Meds Shipped Discreetly: If approved, Hims & Hers will ship medications or products directly to the customer’s door. The company often sells generic meds for things like hair loss (e.g. finasteride), erectile dysfunction (sildenafil, tadalafil), anxiety/depression (SSRIs), acne/skin care, birth control, etc., under its branding. It also offers supplements and over-the-counter products.
Subscriptions = Recurring Revenue: Most customers opt for an auto-refill subscription. In fact, the vast majority of Hims & Hers’ revenue is recurring subscription-based sales. Once signed up, users get refills every month (or quarter) until they cancel. This gives HIMS a nice base of repeating revenue (and a reason to keep customers happy).
Multi-Specialty Expansion: Hims & Hers started in men’s wellness (think hair loss and ED). They’ve since expanded into women’s health (Hers brand for things like birth control, hair thinning, skincare), mental health(online therapy and psychiatry for anxiety/depression), dermatology (acne, anti-aging), and recently weight lossand even heart health. The company pitches itself as a “health and wellness platform” that can tackle many needs in one place.
One notable stat: the Hers brand (women’s health) now accounts for over 30% of revenue as of Q4 2024 – a sign that Hims isn’t just for “Hims” anymore. Management credits cross-learning between the brands for scaling Hers so quickly.
How does Hims & Hers actually make money? Primarily by selling prescription products via its telehealth service. For example, a man dealing with hair loss might pay ~$30/month for a Hims subscription that includes a generic finasteride pill and perhaps a shampoo. Hims & Hers sources the meds (often at low cost, since generics are cheap) and marks them up, bundling in the telehealth consult as part of the service. With an average order value (AOV) of ~$137 in 2024 (up 41% YoY), and high volume of orders, the revenue adds up fast.
The company also has a small wholesale channel – selling some non-prescription products through retail partners. For instance, Walgreens and Target carry Hims & Hers supplements and sexual wellness products in-store and online (a partnership since late 2021). However, this is only ~2–3% of revenue – the direct online business is ~97–98% of sales.
Key strengths of the model:
High Gross Margins: By cutting out middlemen (you buy direct from Hims & Hers’ online pharmacy) and focusing on generic meds and personal care products, HIMS enjoys ~80% gross margins. For comparison, traditional pharmacies have razor-thin margins – Hims & Hers is more akin to an e-commerce/tech company in its cost structure.
Recurring Revenue: Over 90% of sales are recurring subscriptions (according to investor presentations), providing predictability and customer lifetime value. As long as they keep subscribers happy and subscribed, revenue flows in “while you sleep.”
Broadening Portfolio: They keep adding new treatments, which can both attract new customers and cross-sell more to existing ones. For example, a customer who started for ED might later also try Hims’ mental health services or a skincare product – increasing their lifetime value.
Personalization & Data: Hims & Hers emphasizes personalized care. They even have a software tool “MedMatch” to help providers tailor treatment to each patient. They also launched Heart Health by Hims in 2023, a program that combines ED treatment with cardiovascular care in one plan – highlighting an innovative approach to tackle multiple issues (since ED can be linked to heart health). This included partnering with the American College of Cardiology for clinical protocols and with Labcorp to integrate lab testing for heart health. It shows Hims & Hers’ strategy of using medical data and partnerships to legitimize and expand their offerings.
All told, Hims & Hers has built a vertically integrated telehealth pharmacy: they handle the advertising, the telemedicine consult, the prescription, and the product delivery. Think of it as a one-stop online clinic and drugstore focused on everyday wellness needs.
However, this slick model only works if you can get lots of people in the door. Which brings us to the engine of Hims & Hers’ growth: customer acquisition.
Customer Acquisition: The Marketing Machine
If you’ve been served a Hims or Hers ad on Instagram, YouTube, or even heard one on a podcast – it’s no accident. Hims & Hers is a marketing-driven company, and it spends aggressively to acquire customers:
In 2024, marketing expense was $679 million, about 46% of revenue. Historically, HIMS has spent roughly half of its revenue on ads to fuel growth.
Marketing spend grew ~52% YoY in 2024 – yet revenue grew 69%, indicating some improved efficiency. Marketing as a percent of revenue actually ticked down from ~51% in 2023 to ~46% in 2024 (progress, but still very high).
The company uses a mix of social media ads, search engine marketing (Google keywords for “hair loss treatment”, etc.), TV commercials, influencer partnerships, and sponsorships. Their branding is playful and destigmatizing, which helps viral appeal. (They ran their first national TV ad just a few years ago and now are a fairly recognized name).
Management targets a payback period under 1 year for marketing spend – meaning they aim to recoup the cost of acquiring a customer within the first year of that customer’s subscriptions. While exact figures aren’t public in the earnings release, one analysis estimated Hims’ average CAC (cost to acquire) is ~$89 and LTV (lifetime value) ~$338, a healthy LTV/CAC ratio around 4:1. In theory, that means each $1 spent on marketing returns $4 over time, which justifies the upfront spending.
The result of this marketing machine is evident in subscriber growth: Hims & Hers added ~692,000 net new subscriptions in 2024. It ended the year with 2.2M subs, up from 1.5M – and just 1.1M two year ago. This growth suggests that the company is not only attracting new users, but retaining them long enough to build a large base. In fact, HIMS touts strong retention: as they expand into more categories, customers have more reasons to stick around (or come back). For example, someone might pause a subscription and later resume it for a new need – Hims lets users “snooze” and reactivate easily. According to the company, subscriber retention has improved as they broaden offerings and engage users with 24/7 access to providers.
That said, it’s worth noting Hims & Hers must continuously spend to keep growing. If they ever pulled back on marketing, growth would likely slow significantly (more on this risk later). For now, though, the strategy is “grow at all costs – but efficiently.” Impressively, by Q4 2024, Hims & Hers was able to turn a profit while still spending nearly half of sales on marketing, thanks to scale and high gross margins. That implies their unit economics are working.
One more positive: the hefty marketing spend has built real brand equity. Hims & Hers is arguably the category leaderin D2C telehealth for consumer wellness. This brand awareness can make customer acquisition a bit easier (organically or via word-of-mouth) over time, and could let them diversify marketing channels (e.g., more repeat business, less reliance on Facebook ads, etc.).
Recent Developments: New Opportunities & Challenges
The past year brought some big news for Hims & Hers – some great, some not so great. Let’s hit the major developments:
The Weight-Loss Gold Rush... and Regulation Risk
Perhaps the biggest new revenue driver for Hims & Hers in 2024 was its foray into weight loss treatments, specifically GLP-1 drugs (like the now-famous Ozempic/Wegovy for obesity). Hims started offering compounded semaglutide (the active ingredient in those drugs) through its platform in 2023. This means they, via partner compounding pharmacies, provided a lower-cost, customized version of the weight-loss injections to patients who might not get the branded drugs (which were often in shortage and very expensive).
The boost: Demand was huge. This weight-loss offering generated over $225 million in revenue in 2024 for Hims & Hers. It attracted “hundreds of thousands” of new users to the platform, becoming an accelerant for growth. By Q4 2024, the effect was clear: overall average order value jumped 63% YoY (weight-loss patients pay hundreds per month, versus say $20–$30 for hair loss). Hims & Hers reported that after 12 weeks on its compounded GLP-1 treatment, 70% of patients were still subscribed (an impressive retention rate for weight-loss programs. The stock price soared in late 2023 as the market saw this new revenue stream coming – HIMS shares climbed roughly 315% over a year thanks in part to the weight-loss excitement.
The setback: In February 2025, the FDA declared the semaglutide shortage over – meaning compounders could no longer legally copy Ozempic/Wegovy. This essentially shut down Hims & Hers’ ability to sell its compounded weight-loss drug. The company confirmed in late Feb 2025 that it halted new sales of the treatment. Investors panicked: the stock plunged ~25% in one day on the news. Why? Because a lucrative, fast-growing revenue source was suddenly in jeopardy. Hims & Hers had warned this could happen – in an SEC filing they noted they might not be able to keep offering compounded GLP-1s once the shortage ended. They are exploring “paths to continue offering access” to weight-loss treatments in some form, potentially via “personalized” dosages or other legal workarounds. But it’s uncertain if they can replace the straightforward compounded product. The FDA gave all compounders a 90-day grace period (until ~May 2025) to wind down, after which Hims’ weight-loss revenue could drop sharply.
Bottom line: The GLP-1 weight-loss craze turbocharged Hims & Hers’ 2024 results, but that ride is hitting a regulatory speed bump. This is a classic “boom then bust” risk for a company – and a reminder that healthcare is subject to regulators’ whims. We’ll revisit the implications in the Risk section.
Rolling Out At-Home Testing & New Services
On a more positive note, Hims & Hers isn’t sitting still. The company announced plans to roll out at-home blood testingover the next year. This would mark an expansion into at-home diagnostics, allowing customers to conveniently measure things like hormone levels, cholesterol, etc., through mailed test kits. It aligns with their push into preventative and holistic care (for instance, tracking heart health or hormone health and then offering treatments based on results). If executed well, at-home testing could:
Deepen customer engagement: Users might take a blood test and then consult Hims & Hers for what to do about the results (e.g., high cholesterol? Maybe use Hims’ heart health program; low testosterone? Perhaps try a therapy through Hims).
Open new revenue streams: Companies like Everlywell have shown there’s demand for direct-to-consumer lab tests. Hims & Hers could sell test kits and the follow-on treatments, keeping more of the health journey in-house.
Differentiate from pure telemed rivals: It makes Hims more of a full-stack health platform, not just a pill dispensary.
This testing initiative was received well – in fact, just before the FDA’s GLP-1 announcement tanked the stock, HIMS shares had risen on the testing news (which got promptly overshadowed. It shows the company is actively investing in long-term capabilitiesbeyond just prescribing meds.
Additionally, Hims & Hers’ move into Heart Health (cardiovascular) in mid-2023 is a notable development. The “Heart Health by Hims” program, as mentioned, is a dual-action ED + heart treatment approach. It’s not just a new product, but a signal that HIMS wants to tackle chronic health conditions (like heart disease) that have massive patient populations. The partnership with the American College of Cardiology lends credibility. While heart health revenue hasn’t been broken out, it’s likely small so far – but it could grow over time if they, say, start managing patients’ blood pressure or cholesterol with the same D2C model.
Lastly, on the partnership front, aside from medical orgs, Hims & Hers expanded retail presence. By early 2024, its products were available in 7,000+ Walgreens stores and online, plus other retailers like CVS and Target. While retail sales are minor in revenue, these partnerships are essentially marketing channels – they put the Hims & Hers name on shelves, potentially driving people to check out the full platform.
In summary, Hims & Hers has a lot of moving pieces: a core booming telehealth pharmacy, a now-curtailed weight-loss experiment, new testing and heart health services, and ongoing partnerships. All of these feed into the big question: can they keep up the growth, especially as the weight-loss tailwind fades? Part of that depends on competition and execution.
Competitive Landscape: Friends or Foes?
Hims & Hers operates in a crowded and evolving health-tech arena. Key competitors and factors include:
Ro (Roman): A private telehealth company very similar to Hims (started with men’s ED and hair loss, expanded to women’s and other areas). Ro (rebranded from “Roman”) was a high-flying startup but faced challenges – reports of layoffs and a tough funding environment in 2022. Still, Ro offers competing services (ED meds, hair loss, even weight-loss drugs through its “Ro Body” program) and likely vies for the same customers. The difference is Hims & Hers is now larger (2M+ subs) and public, with more capital. Both emphasize branding and D2C convenience. So far, Hims & Hers seems to be out-executing Ro, but competition with Ro/other startups could increase marketing costs or force more innovation.
Teladoc & Traditional Telehealth: Teladoc (NYSE: TDOC) is a giant in telemedicine, but its focus is different – it contracts with employers/insurers and offers broad virtual care (primary care, chronic care, mental health via BetterHelp, etc.). Teladoc isn’t focused on selling products directly or doing D2C marketing for hair loss. In fact, Hims & Hers carved out a niche Teladoc left open: cash-pay consumers seeking quick treatment for everyday problems. That said, Teladoc and others could always decide to push more into direct consumer services, especially as telehealth adoption grows. Teladoc’s BetterHelp is a major competitor to Hims’ mental health offerings (BetterHelp is a leading online therapy platform). Also, companies like Done or Cerebral (for ADHD), Keeps(hair loss), Nurx (birth control) and many specialized telehealth startups all nibble at pieces of Hims & Hers’ market. The space is very fragmented, but Hims & Hers’ advantage is its scale and multi-specialty breadth that smaller players lack.
Amazon & Big Tech: This might be the elephant in the room. Amazon acquired PillPack (online pharmacy) and launched Amazon Pharmacy, and in late 2022 it introduced Amazon Clinic, a direct-to-consumer telehealth service for exactly the kind of conditions Hims & Hers serves (hair loss, ED, birth control, etc). On Amazon Clinic, users can fill out a questionnaire and get a prescription from a partnered provider, then have meds delivered via Amazon’s pharmacy. Given Amazon’s massive customer base and logistics prowess, this is a real threat. Amazon could undercut on price or simply out-market others (imagine Amazon promoting “get your ED meds with Prime 1-day delivery”). So far, Amazon Clinic is relatively new and Hims & Hers continues to grow, but it’s a competitor to watch. Big tech firms like Apple or Google haven’t directly entered this niche, but Amazon’s effort shows how the competitive walls aren’t very high – the concept of online health for everyday meds can be replicated by those with resources.
Pharmacies & Healthcare Incumbents: Traditional drugstores (CVS, Walgreens) and insurers are also dabbling in telehealth and digital wellness. CVS, for example, has its own telehealth and is acquiring primary care providers. These giants might not go full D2C subscription model, but as they integrate services, Hims & Hers could face margin pressure or referral loss (e.g., if an insurer offers low-cost mail-order generics, some might not use Hims).
Others – Weight loss and beyond: In the weight-loss category, competition was intense. Besides Hims & Hers and Ro, companies like Noom (known for its app-based diet coaching) and WeightWatchers (WW) jumped in – WeightWatchers bought telehealth startup Sequence in 2023 to start prescribing GLP-1 drugs. Even 23andMe (the DNA testing company) got into telehealth by acquiring Lemonaid Health, offering services including weight management. All these players were selling compounded semaglutide too. Now that FDA stopped that, they’re all in the same boat needing to adjust. But it shows how quickly many entrants can pile into a hot opportunity. If another lucrative treatment (say a new alopecia drug or sexual health therapy) emerges, Hims & Hers will have to fend off a rush of similar offerings.
Despite the competition, Hims & Hers often cites its “leading platform” status. They likely have the largest customer base among direct competitors, which can become a network effect of sorts: more customers = more data, more cash to invest in R&D/tech, more brand recognition. They are trying to build a moat via technology and experience – for example, their 24/7 access to providers with quick response is a differentiator (most rivals don’t offer unlimited follow-ups included in the service). Also, their expanding menu of services can increase customer stickiness – a user might get multiple treatments from one subscription platform instead of juggling separate niche providers.
Still, the ease of entry into D2C telehealth means Hims & Hers can’t get complacent. The company must keep its marketing sharp, prices reasonable, and user experience top-notch to stay ahead. And if a behemoth like Amazon decides to pour money into this space, Hims & Hers will need to lean on its brand loyalty and agility to compete.
Risks and Red Flags
It’s not all rosy. In fact, some analysts worry that the market may be overestimating the “story” and underestimating challenges. Here are the key risks and red flags for Hims & Hers:
1. Sustainability of Hyper-Growth: Growing revenue ~70% year-over-year is amazing – but can it continue? Part of 2024’s growth was a one-time boost from weight-loss drugs, which is now uncertain. Excluding the GLP-1 weight program, growth was ~43% – still great, but notably slower. With that program halted, 2025 might see growth fall back to more “normal” levels. The company’s guide of ~$2.35B revenue in 2025 implies ~59% growth, but that might have assumed continued weight-loss sales for part of the year. If those sales dry up entirely, HIMS could miss its targets or have to find new sources of revenue to hit them. High growth also gets harder as the base gets bigger – at some point, tapping new customers at the same rate could prove challenging, especially if competition intensifies. Investors betting on “endless 50%+ growth” may be disappointed if things decelerate.
2. Heavy Reliance on Paid Marketing: Hims & Hers’ growth is expensive. As noted, nearly half of revenue goes right back out the door to marketing. This isn’t unusual for DTC companies early on, but it poses risk. What if ad costs rise? (E.g., higher Facebook and Google CPMs, or privacy changes make targeting harder.) What if referral sources (like app stores or search engines) change algorithms? If the ROI on ads diminishes, Hims either spends more to get the same growth or slows down. Moreover, as it expands into broader populations (beyond the early adopters), acquiring each incremental customer might cost more. Any slip in marketing efficiency could hurt margins or growth. There’s also a competitive ad spending war aspect – if Ro or others up their ad budgets, Hims might have to respond, driving up customer acquisition cost. The company does claim it has a disciplined approach (only spending when payback < 1 year), but conditions outside its control could lengthen payback and strain the model.
3. Margin Compression: While gross margins are high now, there’s a trend worth watching: gross margin dipped from 83% to 77% in Q4, largely due to the weight-loss product. Newer offerings like personalized compounded medications or brand-name drugs (if they start offering those) could carry lower margins than selling generic Viagra and biotin gummies. Also, Hims & Hers has been investing heavily in technology, support, and operations – OpEx beyond marketing rose significantly as they scale (fulfillment costs, customer support, clinician fees, R&D for new services). In the short term, management acknowledged that **ongoing investments will pressure margins. For example, if they roll out at-home testing, there are upfront costs (developing kits, perhaps lower margin on the kit sales initially). If gross margin falls or OpEx rises faster than revenue, the profitability story could stall. The bull case assumes scaling will bring operating leverage (i.e. expenses growing slower than revenue), but if the opposite happens (diminishing returns on scale), earnings could disappoint.
On the flip side, if weight-loss meds vanish from the mix, gross margin might actually tick back up (since those were likely lower margin sales). However, losing those sales hurts absolute profit even if the percentage margin improves. The net impact is uncertain – it’s a risk to monitor how their margin profile evolves with the changing product mix.
4. Customer Churn & Engagement: We hear a lot about subscriber growth, but less about churn (how many customers cancel). The company doesn’t publicly give a churn rate, but in subscription businesses it can be significant. Are customers sticking around long enough? Some Hims users might just try a product for a couple of months and leave. For instance, once a guy’s hair stops shedding, he might cancel his subscription; or a patient might switch to a local provider eventually. High churn would mean Hims & Hers has to continually “refill the leaky bucket” with new customers via that heavy marketing spend. So far, signs indicate fairly good retention (the 2.2M subs number is cumulative net after churn). Hims & Hers also said monthly revenue per subscriber rose 19% in 2024 – suggesting users are either buying more or staying subscribed longer on average. They’ve also noted that adding more services (mental health, primary care, etc.) improves overall retention as there are more touchpoints to keep a customer engaged. Still, if churn were to creep up – say due to competition or dissatisfaction – the growth and marketing efficiency math could worsen quickly. This is somewhat a black box risk since we rely on management’s portrayal of strong retention. An investor should keep an eye on that subscriber count each quarter relative to marketing spend to infer if churn is rising.
5. Regulatory and Legal Risks: The healthcare sector is heavily regulated, and Hims & Hers sits in a tricky spot – online prescribing. The compounded drugs issue with the FDA is one example of how rules can change and hit revenue. There are other looming regulatory considerations:
Telehealth Prescribing Rules: During COVID, rules were relaxed to allow prescribing of many medications via telehealth without an in-person exam. Post-pandemic, regulators (like the DEA) have considered tightening rules, especially for controlled substances (e.g., ADHD meds). Hims & Hers mostly avoids controlled drugs, but any broad changes in telemedicine regulation could force them to alter practices. If states enact stricter telehealth laws or require more doctor-patient interaction, it could raise Hims’ costs or reduce convenience.
Privacy and Data: Hims & Hers handles sensitive health data. A breach or misuse could lead to legal penalties and loss of trust. Also, advertising for health products must be careful with claims – regulatory action on misleading marketing is possible if they over-promise results.
Product Safety and Liability: As Hims expands into new treatments, any issues (say, a medication they sell causing unforeseen side effects or a compounded formula problem) could bring lawsuits or FDA scrutiny. They have to ensure quality across third-party pharmacies and their own operations – not trivial when scaling fast.
6. Competition and Pricing Pressure: We discussed competitors – the risk here is that competition forces Hims & Hers to spend more or cut prices. If Amazon offers a similar generic med for a lower price and free shipping, Hims might have to match it or lose customers. Already, Hims & Hers’ compounded weight-loss offering was winning because it was cheaper than the brand-name drug. But now with that gone, can they compete if everyone is selling the same Ozempic (where Hims has no pricing edge)? In other categories, if multiple telehealth sites sell generic ED meds, it could become a commodity market where brand loyalty is the only differentiator. Any erosion of pricing power or spike in customer acquisition cost will hit margins. So far, Hims has maintained strong pricing (evidenced by rising AOV, but this will be an area to watch as competitors (especially deep-pocketed ones) maneuver.
7. Stock Valuation and Dilution: Lastly, from an investor’s perspective, even after the recent dip, HIMS stock is not “cheap” by traditional metrics. The market has been pricing it for high growth. If that growth or profitability trajectory falters, the stock could be volatile (and we’ve already seen big swings – up 300% then down 25% in a flash. The company has also issued a lot of stock in the past (came public via SPAC in 2021) and continues to use stock-based compensation (~92$ in 2024). While they even started buybacks, the diluted share count is around 237 million, up from prior years. Future acquisitions or incentives could dilute shareholders further (though having cash and positive cash flow might reduce the need for equity raises). Just something to consider: investors are betting on execution remaining excellent, and any misstep could lead to a sharp re-rating of the stock.
In short, Hims & Hers looks like a classic high-growth disruptor with a lot of momentum – but also a lot of moving parts to keep on track. The bullish sentiment is driven by real achievements (huge growth, a path to sustainable profits, expansion into big new markets). Yet, it’s wise to be mindful of the risks (a recent FDA ruling literally wiped out a chunk of its business overnight).
Conclusion: Balancing the Hype with Reality
Hims & Hers has undeniably shaken up how people access everyday healthcare. In a few short years, it built a nationally recognized brand serving millions of customers with a wide (and widening) array of health products. The latest earnings report showed eye-popping growth in revenue and subscribers, validating the DTC telehealth model on large scale. It’s even reached that coveted milestone of profitability, suggesting that the unit economics can work at scale.
The bull case for HIMS is that this is just the beginning: the company can continue to expand into new conditions (they talk about “every household in the country” as a target), cross-sell more services (like testing and coaching), and leverage technology to improve care personalization. If they execute, Hims & Hers could evolve into a sort of “digital front door” for routine healthcare – a huge market. The full-year 2025 guidance and optimistic CEO commentary reflect this vision of transforming healthcare and not just being an online pill shop.
However, investors should be cautious about getting swept up in the hype. The recent weight-loss saga is a reminder that some of Hims & Hers’ growth has come from opportunistic moves that might not last. The core business – selling hair, skin, sexual health, and mental health treatments – is growing nicely but also faces more competition than ever. The company must prove it can thrive without leaning on an easy win like compounded Ozempic or ultra-cheap social media ads (both of which are less certain going forward).
Key things to watch in the coming quarters will be: can Hims & Hers keep acquiring customers efficiently (and retain them) as it scales? Is growth in the core segments (ex-weight loss) staying strong or plateauing? Are new initiatives like testing and heart health gaining traction? And how do margins hold up as the business mix shifts?
At the end of the day, Hims & Hers has earned a bullish following for good reason – it disrupted an archaic system and made it profitable. But it’s now a company with a big target on its back, operating in a field where regulations and rivals can rapidly change the narrative. The widespread bullish sentiment might be justified if Hims & Hers continues executing flawlessly and innovating. Yet it would be a mistake to ignore the significant risks that could challenge its current trajectory – from regulatory curveballs to the costly grind of customer acquisition.
For now, Hims & Hers is a fascinating story of growth – one that warrants both applause and a bit of healthy skepticism. Investors would do well to keep their eyes open to both the promising opportunities and the pitfalls on the road ahead.
Disclaimer: The information provided in this publication is for educational and informational purposes only and does not constitute financial advice. The content is solely reflective of my personal views and opinions based on my research and is not intended to be used as a basis for investment decisions. While every effort is made to ensure that the information is accurate and up-to-date, the writer makes no representations as to the accuracy, completeness, suitability, or validity of any information in this post and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All readers are advised to conduct their own independent research or consult a professional financial advisor before making any investment decisions. The author is not invested in the mentioned stock.
Awesome write-up. Really gave a good picture of this company. I hear about it so much in the investing world, but I’ve never really looked into it. Nice work!
Incredible deep dive that has finally helped me understand the hype on a name I’ve heard so much about but knew very little on! Would be very interesting to look at governance, management incentive (you talked about stock based compensation) and how much growth is priced into current valuation. Completely agree that the focus should be competition given the very public success of the company it would be surprising not to see very well capitalized companies entering the market.