Co-written by the Smartfin Team and @YodaStocks (X)
In today’s market environment, many retail-popular stocks are hyped, and Hims & Hers Health (HIMS) presents an intriguing growth opportunity in the telehealth space—especially for long-term investors comfortable with risk. From valuation to execution, this comprehensive breakdown explores why HIMS could be one of the most promising growth stocks around.
While the stock’s valuation may appear high, its robust revenue trajectory and margin expansion suggest potential—though execution and competition remain key challenges. Let’s dive in on why HIMS stands out.
1. Introduction for New Investors
If you're hearing about HIMS for the first time, you're not alone—but you might be early. HIMS is a fast-growing direct-to-consumer telehealth company aiming to transform how everyday healthcare (like hair loss, mental health, weight management, and more) reaches consumers: affordably, conveniently, and discreetly.
Many retail investors have taken notice, but the strength of its fundamentals and long-term potential still surprises. This deep dive walks you through why HIMS may be one of the most compelling growth stocks available today. We’ll break down the numbers, strategic moves (like the ZAVA acquisition and upcoming treatment launches), and outline future scenarios—revealing both the upside and the risks.
2. Valuation: Reasonable for its Growth
When evaluating a fast-growing company like HIMS, traditional valuation metrics must be viewed in context:
- P/E Ratio (Price-to-Earnings): Measures how much investors pay per $1 of earnings.
- Forward P/E: Uses forecasted earnings instead of past earnings; indicates if the stock is fairly priced relative to expected earnings.
- P/S Ratio (Price-to-Sales): Compares market cap to revenue—useful for fast-growing but not-yet-profitable companies.
Here are HIMS’s key valuation metrics:
| Metric | Value | Context |
|---|---|---|
| Forward P/E | 48 (EPS $1.04 expected 2025) | ~2.5× the average stock |
| 2-year Forward P/E | 36 (EPS $1.38 expected 2026) | <2× the average |
| Revenue Growth (FY2025) | 56–63% | ~9× the average stock |
| Forward P/S | 4.8 (Revenue $2.35B expected 2025) | Low given growth rate |
| Market Cap | $11.3B | Mid-cap level |
HIMS has a track record of exceeding expectations, potentially meaning these figures are more favorable than they appear. While the valuation reflects investor optimism about growth and profitability, anything from growth slowdown to margin compression could lead to multiple contraction. Still, revenue growing at about 9× the average stock suggests meaningful upside if execution continues.
Market Cap Perspective
With a market cap around $11B, HIMS has significant room to scale if it continues to expand internationally, launch new verticals, and improve margins. In comparison, healthcare giants like Novo Nordisk and Eli Lilly are worth hundreds of billions—highlighting the opportunity if HIMS executes properly.
Revenue Growth & Profitability
- Revenue growth exceeded 80% YoY from 2021 through early 2023; dipped to 47% in late 2023; rebounded to 111% by March 2025
- Net income turned profitable in Q4 2023 ($1M profit) after narrowing losses in earlier quarters
- Strong signs of operating leverage as coverage of fixed costs improves margins
3. Catalysts
Events and developments that may drive HIMS in the next 6–18 months:
- Executive Order encouraging DTC drug pricing supports platforms like HIMS
- ZAVA acquisition, boosting subscriber base by ~50% and opening the European market
- New executive hires (e.g. CTO, COO) adding execution strength
- New treatments launching H2 2025: testosterone and menopause therapies
- High short interest (~30%) could spark a short squeeze
- Potential S&P 500 inclusion once share price hits ~$91 (market cap ~$20.5B)
- Analyst expectations appear low—modeling ~20% growth in 2026 versus management’s guidance
Together, these catalysts form a powerful foundation for exponential growth through 2030.
4. The Healthcare Context
- U.S. healthcare is expensive, inefficient, and inconvenient; many European systems are ripe for modernization
- HIMS offers:
- No waiting rooms or paperwork
- Gen-Z/Millennial-friendly services
- Integrated diagnostics-to-delivery care
- Multiple verticals under one digital umbrella HIMS is not just a telehealth provider but a scalable, data-driven health platform that could become the “Amazon of Health.”
5. Why the ZAVA Deal Is So Massive
The ZAVA acquisition accelerates HIMS's entry into Europe, despite regulatory complexity. It significantly expands TAM and user base—but execution and monetization across regions remain critical to success.
6. HIMS Business Segments
HIMS's offerings include:
- Hair loss, ED, anxiety & depression
- GLP-1s (Ozempic, Wegovy) for weight loss
- Upcoming: testosterone, menopause, longevity, peptides
- Owned pharmacies and fulfillment centers
GLP-1s drive recent growth, but core segments remain resilient. Expansion into peptides, testosterone, menopause, and longevity enhances customer stickiness and lifetime value.
7. Legendary Leadership
Andrew Dudum, founder and visionary behind HIMS, took the company public in his 20s. His leadership, combined with new strategic hires, underpins HIMS’s rapid scale since 2018. Sustained execution remains essential amid regulatory and competitive pressures.
8. Forward Projections (2026–2028): Bear, Base & Bull Cases
Assumptions behind the scenarios:
- No black-swan events or major macro disruptions
- Realistic valuation multiples similar to today’s levels
- Stock-based compensation dilution not explicitly modeled
- Averaged growth rates used across the period
Bear Case
- 2025 Revenue: $2.4B (25% YoY growth); 2028: $4.68B
- 2025 EPS: $1.08 (30% YoY growth); 2028: $2.37
- Valuation: Forward P/E 40 in 2028 (S&P inclusion, 25%+ growth)
Even in this conservative scenario, long-term returns remain strong.
Base Case
- 2025 Revenue: $2.45B (30% YoY growth); 2028: $5.38B
- 2025 EPS: $1.15 (50% YoY growth); 2028: $3.88
- Valuation: Forward P/E 50 in 2028 (similar to today’s levels)
This assumes solid execution and benefit from ZAVA acquisition—could deliver ~4× return.
Bull Case
- 2025 Revenue: $2.5B (40% YoY growth); 2028: $6.86B
- 2025 EPS: $1.25 (60% YoY growth); 2028: $5.12
- Valuation: Forward P/E 60 in 2028
Assuming aggressive growth, margin improvement, global expansion, and sustained retail/Wall Street enthusiasm—this scenario implies ~6× upside.
9. Bear Arguments & Rebuttals
| Bear Argument | Rebuttal |
|---|---|
| “GLP-1 revenue will end” | Core services (hair, mental health, ED) are still growing; upcoming verticals will diversify revenue. |
| “Legal risks” | Potential lawsuits or competition from big pharma could cause 10–30% hit—but models already allow room for error. oai_citation:14‡Smartfin |
| “Overvalued” | Forward P/E (~50) and P/S (~4.8) may appear steep, but reasonable given 60%+ growth and improving margins. |
| “No moat” | HIMS builds a data-driven feedback loop improving treatment efficacy and retention, though wider competitor risk remains. |
| “Unrealistic long-term targets” | HIMS previously exceeded its own guidance—so a 22.2% CAGR is likely conservative. |
10. Final Thoughts
HIMS combines multiple traits that attract long-term growth investors: a considerable addressable market, expanding product verticals, improving margins, and early signs of strong operating leverage. Execution risks—regulation, competition, and international expansion—persist. But for those who tolerate volatility and elevated valuation, HIMS offers a credible, asymmetric upside in a transforming healthcare landscape.
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Disclaimer: This deep dive is for educational purposes only and is not investment advice. Do your own research and consider your financial situation and risk tolerance.
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