Hims & Hers Growth Strong, Yet Stock Faces Pressure

Hims & Hers shows remarkable growth with a 95% revenue surge in Q4. However, stock prices fell due to concerns over future semaglutide sales and softer gross margins. Investors may find this decline a potential buying opportunity.

Date: 01-03-2025

AI Rating: 7

Company Performance Overview
In the latest report, Hims & Hers experienced significant growth in Q4, showcasing a revenue increase of 95% to $481.1 million, surpassing the revenue forecast of $465 million to $470 million. The company reported a remarkable adjusted earnings per share (EPS) of $0.11, exceeding analysts' consensus of $0.10.

Earnings Per Share (EPS)
The adjusted EPS of $0.11 is indicative of strong performance, constituting a 1,000% increase year over year. This positive trajectory may appeal to investors, as it reflects effective operational management despite the recent stock price drop.

Revenue Growth
Hims & Hers achieved a sizeable revenue growth of 95% in Q4, which suggests strong consumer demand and effective marketing strategies. Total revenue excluding GLP-1 drugs also grew by 43% to $1.2 billion in 2024, indicating a healthy operational outlook.

Free Cash Flow (FCF)
Free cash flow rose impressively by over 450% to reach $59.5 million, further highlighting the company’s strong financial management and ability to generate cash from its operations. This is a favorable metric for investor consideration as robust cash flow can support further investments and growth initiatives.

Future Guidance
Looking forward, the projected revenue for 2025 is between $2.3 billion and $2.4 billion, signalling a growth expectation of 56% to 63%. However, the forecasted drop in weight-loss revenue due to the cessation of semaglutide may raise concerns regarding the sustainability of this growth.

In summary, while Hims & Hers has demonstrated extraordinary growth metrics and cash flow, the uncertainty arising from strategic changes and future revenue projections poses risks that may affect investor confidence and stock performance.

Stocks: HIMS