Hims & Hers Health (HIMS 1.49%) is one of the most volatile stocks on the market at the moment, prone to big swings in either direction. This is true even intraday, as the stock plunged following the company's second-quarter results, only to rally back, only to plunge again. As of this writing, the stock is still trading up more than 130% this year.
Let's take a closer look at the most recent earnings results for this telehealth company focused on providing accessible and affordable healthcare solutions for various health and wellness needs, and its prospects. Who knows, you might want to jump in on this somewhat volatile growth stock.
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Hims saw strong revenue growth in Q2
Hims & Hers continued to deliver outstanding revenue growth in Q2, with sales climbing 73% year over year to $544.8 million. That was toward the high end of its forecast for revenue of $530 million to $550 million, but it missed analyst expectations for revenue of $552 million. Monthly online revenue per subscriber jumped 30% to $74 per month, while the number of subscribers climbed 31% to nearly 2.44 million. The company said that the number of subscribers in both oral weight loss and dermatology grew more than 55% in the quarter.
Customers using at least one personalized subscription increased by 89% to 1.5 million, representing more than 60% of the Hims & Hers subscriber base. It said that 70% of new patients who join the platform use a personalized treatment plan, and that the number of subscribers using a personalized treatment plan to treat multiple conditions skyrocketed 170% to more than 500,000.
Revenue from GLP-1 weight loss drugs fell from $230 million in Q1 to $190 million in Q2, after Novo Nordisk ended a partnership with the telehealth company. Nonetheless, it still expects to generate $725 million of revenue this year from weight loss drugs, led by oral weight loss products and personalized doses.
Hims & Hers continues to spend heavily on marketing to attract new customers. During the quarter, its marketing spending jumped 50% to nearly $218 million. Marketing expenses took up 40% of revenue in the quarter, though that was down from 46% a year ago, so the company continues to see leverage in this area despite the increased spending.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) surged to $82.2 million from $39.3 million a year ago. Adjusted earnings per share (EPS) came in at $0.17, topping the $0.15 analyst consensus as compiled by LSEG.
| Metric | Q1 Results | Growth (YOY) |
|---|---|---|
| Revenue | $544.8 million | 73% |
| Monthly online revenue per subscriber | $74 | 30% |
| Subscribers | 2.44 million | 31% |
| Adjusted EBITDA | $82.2 million | 109% |
| Adjusted EPS | $0.17 | 183% |
| Marketing expense | $231 million | 77% |
| Marketing as % of revenue | 40% | (600 basis points) |
| Gross margin | 76% | (500 basis points) |
Data source: Hims & Hers Health. YOY = year over year.
Looking ahead, Hims & Hers maintained its forecast for 2025 revenue to be between $2.3 billion and $2.4 billion, equal to growth of 56% to 63%. It also kept its adjusted EBITDA guidance of $295 million to $335 million.
For Q3, it projected revenue of between $570 million and $590 million, and adjusted EBITDA of $60 million to $70 million.
The company is starting to look toward international expansion to bolster growth. It will begin by focusing on Canada next year, while its acquisition of Zava in July will help it expand into Europe. It also anticipates entering the Latin American and Asian markets in the coming years.
Hims & Hers also continues to expand into new areas. It will launch hormonal health soon, starting with lab testing. The company believes this will help it reach its targets of $6.5 billion in revenue and $1.3 billion in adjusted EBITDA in 2030.
Is the stock a buy?
Hims & Hers continues to be a growth engine. Even though there's been some disruption from its spat with Novo Nordisk, it is still seeing strong growth across different health categories.
With the company moving into new areas, like hormonal health and longevity, and looking to expand internationally, it has a lot of growth opportunities ahead. Meanwhile, with the majority of its subscribers on personalized treatment plans, it has a pretty sticky user base.
From a valuation standpoint, the stock trades at a forward price-to-earnings (P/E) ratio of around 55 based on the analyst consensus for 2025. But its forward price/earnings-to-growth ratio (PEG) is under 0.6, and stocks with PEG ratios below 1 are usually considered undervalued. Given that it operates a subscription business with high gross margins, you can also look at the stock from a price-to-sales perspective; on that front, it trades at a multiple of 5.5 times 2025 analyst estimates. Overall, I'd say, based on the type of business the company is in, that it's still reasonably priced.
However, it's still a volatile stock that carries some risk depending on what happens in the weight loss segment. Still, I really like its international opportunity, and think Hims & Hers Health could have solid long-term upside from here.
