The COVID-19 pandemic has revolutionized the telehealth sector -- and its momentum is not going away, even as life returns to normal. According to market surveys, 76% of patients are now comfortable using telehealth, compared to less than 15% before the pandemic.

One provider that is breaking ground in the sector is Hims & Hers Health (HIMS -4.01%). Despite its market cap of just $2 billion, Hims & Hers has more power than investors might think.

Man having a virtual consultation with his doctor.

Image source: Getty Images.

A successful telehealth company

During the first quarter of 2021, Hims & Hers' revenue increased by an astonishing 74% year over year to $52.3 million. Its operating income less noncash items (EBITDA) widened slightly to negative $8.6 million, compared to negative $4.6 million in Q1 2020. The stock is already up 30% since the announcement of these results on May 17. 

There are over 220 providers on Hims & Hers' platform. On average, 94% of customers report they are satisfied with the platform. This is largely due to the high quality of care offered by its practitioners. In addition, company has a distribution network that allows its doctors to directly prescribe medications after each visit.

Hims & Hers specializes in treating hair loss, erectile dysfunction, anxiety, and depression. Over 390,000 subscribers use its services, up 80% from the first quarter of 2020. It plans to expand its expertise into sleep, fertility, diabetes, and cholesterol management in the near future. Keep in mind that the company has no debt and possesses more than $300 million in cash and investments. So it is more than able to cushion losses as it scales.

Why Hims & Hers in particular? 

High-quality care aside, Hims & Hers is also expanding the platform for enterprise clients. Its health plans offer employees 24/7 support for primary care. Moreover, members who enroll can access more than 500 generic medications and 100 branded drugs in a delivery network spanning all 50 states. All of its revenue currently comes from domestic sales. With a scalable business model, Hims & Hers has the potential to sustain its growth for years to come if it starts offering its services abroad.

Employers nationwide are looking for better health benefits -- and telehealth plans for their employees. For example, Hims & Hers' competitor, Amwell (AMWL -7.55%), has 36,000 employers enrolled in its telehealth plans and covers 80 million lives. One-time stops for virtual care services like Teladoc Health (TDOC -3.10%) simply won't cut it. Hims & Hers is well poised to benefit from this changing dynamic.

There's more to come

The company recently announced that it would bring in $224 million in revenue for the full year. That is far more than its previous guidance of $200 million in sales it made in March. 

Its stock is currently trading for about 12 times sales, which is cheap considering the company is on track to improve its sales by 50% this year. Overall, given its high consumer satisfaction, enterprise telehealth exposure, and the potential to expand to international markets, I'd definitely tell healthcare investors to add Hims & Hers to their watchlists.