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Why Hims & Hers Health Stock Popped Today

By Jeremy Bowman – Aug 12, 2021 at 1:04PM

Key Points

  • Hims & Hers beat estimates on top and bottom lines in its second quarter.
  • The company closed on two acquisitions, helping it accelerate growth in new geographies and verticals.
  • Revenue guidance was better than expected.

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Shares of the telehealth company rose on better-than-expected second-quarter results.

What happened

Shares of Hims & Hers Health (HIMS 1.51%) were climbing today after the consumer-facing healthcare company delivered a strong second-quarter earnings report last night.

As a result, the stock was up 9.1% as of 12:05 p.m. EDT after gaining as much as 19.9% earlier in the session.

A bottle of Hims tablets with cherries and gummy bears scattered nearby.

Image source: Hims & Hers.

So what

The telehealth company posted 69% revenue growth to $60.7 million in the quarter, ahead of estimates at $56.5 million. Online revenue, which makes up the vast majority of the business, was up 75% to $58.1 million, and the company saw strong growth in key metrics like subscriptions, net orders, and average order value, which increased from $58 to $74. Gross margin also improved from 71% to 78%, showing the company gaining scale.  

On the bottom line, an adjusted EBITDA profit of $1.2 million in the year-ago quarter flipped to a $4.7 million loss as overhead expenses like marketing and general and administrative more than doubled in the period. On a generally accepted accounting principles (GAAP) basis, the company reported a per-share loss of $0.05, which beat expectations at $0.10.

CEO Andrew Dudum said, "This was a quarter of very strong execution, as we continued to drive consistent organic revenue growth across our business, from our core categories to the newer mental health services." 

Now what

Hims & Hers also closed on two acquisitions in the quarter: Apostrophe, a teledermatology company, and Honest Health, a British vertical health platform. Those moves reflect the company's intentions to grow both organically and through acquisitions as it aims to become a "new front door to healthcare," in the words of Dudum.

Looking ahead, Hims & Hers expects revenue of $251 million to $255 million for the full year, or 70% growth at the midpoint, well ahead of the analyst consensus at $226.3 million. It also called for an adjusted EBITDA loss of $35 million to $40 million. 

Considering the better-than-expected numbers both in the second quarter and for its full-year guidance, it's not a surprising to see Hims & Hers shares moving higher today.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Hims & Hers Health Stock Quote
Hims & Hers Health
HIMS
$6.71 (1.51%) $0.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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