Hims & Hers Stock Rises On Stimulating Earnings Growth

man in telehealth appointment with female practitioner on screen

Hims & Hers Inc. (NYSE: HIMS) is a telehealth platform in the medical sector that has turned the corner into GAAP profitability. The company got its start offering convenient, frictionless and discreet erectile dysfunction (ED) prescription solutions for men but has since expanded its offering into primary care and health and wellness products, including weight loss solutions for men and women.

The company has also focused on incentivizing longer-duration subscription plans to bolster its net orders and average order values (AOVs). Hims & Hers has carved itself a solid niche in the telehealth segment against larger platforms that Teladoc Health Inc. (NYSE: TDOC), LifeMD Inc. (NASDAQ: LFMD) and American Well Co. (NYSE: AMWL).

An Expanded Portfolio of Product Offerings

Hims & Hers offers personalized healthcare treatments. Its offerings have expanded beyond sexual health solutions to include dermatology, hair loss, mental health, primary care and weight loss, all online or through its mobile app. The company uses a network of licensed medical professionals to perform online assessments and prescribe the needed medications for the diagnosis.

It offers cheaper generic versions of popular medications like Zoloft, Lexapro and Wellbutrin for anxiety and depression and generic and brand Viagra and Cialis for ED. Its mental health segment has grown to over 130,000 members. Currently, Hims & Hers doesn't offer GLP-1 weight-loss drug prescriptions but plans to offer them when prices become more affordable.

Refillable Subscription Model Aids Customer Retention

Most of Hims & Hers products are refillable, which is conducive to a subscription model. The company offers discounts for extended subscription plans as an added incentive to sign up for longer-duration subscriptions. Online support is included with subscriptions. Patients communicate with medical professionals through the app, not on the phone.

A Strong Quarter on the Top and Bottom Line  

On February 26, 2024, Hims & Hers reported a Q4 2023 profit of 1 cent, beating consensus analyst estimates by 3 cents. Net income rose to $1.2 million with adjusted EBITDA profitability of $20.6 million. In the year-ago period, the net loss was $10.9 million. Gross margins were 83% YoY, up from 79% YoY in the year-ago period. Revenues rose 47.4% YoY to $246.6 million, beating $245.84 million consensus estimates. Subscribers rose 48% YoY to 1.5 million.

Showing Growth in Key Financial Metrics 

When compared to on a sequential level, there were some falling metrics. Monthly online revenue per average subscriber fell 4% YoY. This is due to the push towards getting members to subscribe to longer-duration subscriptions for discounts. Net orders rose 24% to 2.3 million. AOV rose 18% to 103 million.

The Company Raised Its Guidance

Hims & Hers provided upside guidance for Q1 2024 revenues of $267 million to $272 million versus $253.27 million consensus analyst estimates. Adjusted EBITDA is expected to be around $22 million to $27 million, reflecting an Adjusted EBITDA margin of 8% to 10%. Full year 2024 revenues are expected to be between $1.17 billion and $1.20 billion versus $1.1 billion consensus estimates. Adjusted EBITDA is expected to be between $100 million and $120 million, which is an adjusted EBITDA margin of 9% to 10%.  

HIMS CEO Offers Bullish Commentary

Hims & Hers Co-Founder and CEO Andrew Dudum commented, "In 2024, we expect to eclipse $1 billion in revenue and deliver our first full year of net income profitability through a continued focus on building personalized and accessible treatments in each of our core specialties. We believe this approach will meaningfully break down barriers that keep individuals from seeking treatment, which will allow us to bring these unique offerings to tens of millions of subscribers over time."

His & Hers Health analyst ratings and price targets are at MarketBeat. Find Hims & Hers Health's peers' and competitors' stocks with the MarketBeat stock screener.

hims stock daily ascending triangle breakout pattern

Daily Ascending Triangle Breakout Pattern  

The daily candlestick chart on HIMS illustrates an ascending triangle breakout pattern. The ascending trendline forms at $8.51 on February 5, 2024, rising towards the flat-top upper trendline at $10.13. HIMS started to break out into its Q4 2023 earnings report and gapped on the release to $11.38. Shares surged as high as $13.92. The daily relative strength index (RSI) surged through the overbought 70-band. Pullback support levels are at $12.34, $11.38, $10.29 and $9.28.

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