I'm very convinced that $HIMS is extremely undervalued and should be trading at a premium compared to its current multiple.
Noteworthy Financials:
0 debt, 80% gross margins, 65% revenue growth YoY, 85% customer retention for a period of two years or more. All of this to trade at a very low valuation. 800 million revenue while valued at ~1.3 billion
Comps/ Competition:
Their closest comp would be Roman/Ro, a private company which has just been valued at $7 billion – 5x more than $HIMS. That would equate to $4 billion in revenue for Ro ($800 million projected year end revenue for HIMS).
Teladoc does not provide the same medications as HIMS, has been grossly mismanaged, and lacks the innovative spirit of HIMS. I don't think they even compete in the same space.
Amazon has started providing a very similar service, but lacks the branding and trust that HIMs has built for itself. I also don't believe it is something like a CHWY vs. AMZN situation in that people desire personalization within healthcare. 80% of the new $HIMS customers choose the personalization route (dosing, consultations, supplements, etc.), and they are also re-acquiring many old customers by offering this service now. I do believe AMZN could upend $HIMS with a bottomless balance sheet but first: it looks like they're way more focused on AI & Cloud services right now, and I don't see why there couldn't be multiple players in this market.
Catalyst:
They are now beginning to sell GLP-1 weight loss drugs which are already not covered by insurance. This is coupled with 45% of HIMS customers being upsold/cross-sold on their services. I see untapped and extreme growth that will allow $HIMS to realize its advantage.
Money being allocated for buybacks also suggest management believes in undervaluation.
Profitable year would be huge for the company, I believe if they desired they could easily turn a profit as a huge chunk of their revenue is spent on advertising and R&D to grow the business.
Risk:
I see a lot of comments about $HIMS not having a moat, but within the healthcare industry their moat is their branding. Healthcare requires trust, and their advertising and outreach is gaining them that, this is a HUGE moat IMO.
I don't think it would be affected by an macroeconomic conditions given that they sell prescription drugs that are subscription based. I would consider them necessary goods.
I don't believe there to be a very big risk from a regulation perspective as you are doing everything you would do by seeing a doctor, only online: You get a consultation, then you get a prescription.
Let me know what you guys think though, I think this is a long-play with huge growth potential.
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