TLDR;
- Subscribers: 1.9 million, up 43% YoY growth.
- Personalized subscribers: 42% of subscribers (up 19% YoY).
- Monthly revenue per subscriber: $67, up 24% YoY growth.
- D2C allows $HIMS to directly connect with its customers.
- Higher scale, lower the price $HIMS can offer.
- Current PE : 70 – Not justified.
- Wait and watch.
HIMS Q3 FY24 Results:
- Payback period: Target is under 1 year.
- Total net orders: 10 million, up 20% YoY growth.
- Average Order Value (AOV): $147, up 48% YoY growth.
- Revenue: $401.6M, up 77% YoY.
- Gross Margin: 79% (down from 83% YoY).
- Net Income: $75.6M (vs. net loss of $7.6M YoY).
- Free Cash Flow: $79.4M, up from $19.3M YoY.
What do they do?
Hims & Hers is a telehealth platform offering online consultations and personalized prescriptions delivered to your doorstep.
- 👨 Hims: Telehealth platform for men’s health.
- 👩 Hers: Telehealth platform for women’s health.
- 💊 Online pharmacy: Fulfillment and delivery of medications.
- 🧴 Skincare and wellness products: A range of branded products.
- 🧪 Personalized plans: Customized plans based on individual needs.
HIMS GLP-1s Fiasco
What is it?: Glucagon-like peptide-1 (GLP-1) – A medication for weight management and type 2 diabetes treatment.
- GLP-1s are still less than 10% of the business today.
- FDA Approval: Not FDA-approved; using FDA loophole for compounded drugs.
- Safety Concerns: FDA has expressed concerns about safety and efficacy.
- Compounded Version: Selling compounded semaglutide, a GLP-1 receptor agonist.
- Adverse Events: Reports of adverse events and dosing errors.
- Sales: Priced at $199/month, significantly cheaper than Nestlé’s Vital Pursuit, Ozempic (Novo Nordisk), Wegovy (Novo Nordisk) and Mounjaro (Eli Lilly).
- Supplier Concerns: Supplier, BPI Labs, has a questionable history with ties to fraud and bankruptcy.
2029 Valuation
Assumptions :
- LTM Revenue: $1.24B
- 5Y Revenue CAGR: 39.22%
- 2029 Profit Margin: 8%
- 2029 PE Ratio: 30
- Shares outstanding: 0.218B
- Shares reduction: 10%/year
Valuation :
- Q3 2029 HIMS SHARE PRICE = 1.24 * (1.39)^5 * 0.08 * 30 / [0.218 * (0.90)^5] = $117
- Using discount rate for HIMS as 9%.
- CURRENT SHARE PRICE: $31.35
- DISCOUNT RATE: 9%
- FAIR VALUE: $117 / (1.09)^5 = $76.09
- POTENTIAL UPSIDE: (($76.09 – $31.35) / $31.35) × 100% = 142.8%
- EXPECTED RETURNS: ((($117 / $31.35)^(1/5)) – 1) × 100% ≈ 9%/year
- DIVIDEND YIELD: NA
- MY RATING: HOLD 🟡 | Wait and watch.
- Current share price surge is due to resolved shortage of tirzepatide (Ingredient for GLP-1s)
