HIMS - Beyond The Marketing Machine: Why Hims & Hers Stock Might Be Vulnerable
2024-06-10 04:41:47 ET
Summary
- Hims & Hers boasts booming revenue, but faces a commoditized business model with intense competition.
- High marketing expenses raise concerns about customer retention and unit economics.
- Decelerating revenue growth, potential margin contraction, and a high valuation suggest the stock might be vulnerable despite the excitement around new weight loss drugs.
Hims & Hers ( HIMS ) has experienced booming revenue and gross profit in recent years following a boom and bust cycle in the stock in the 2020-22 period. A lot of excitement has followed the launch of their low-cost compounded version of the GLP-1 drugs, yet I believe underlying trends, unit economics and pattern analogies suggest caution at this level.
Context
Hims & Hers offers a health and wellness e-commerce platform focused on providing access to medications and over-the-counter treatments, particularly for those addressing long-term conditions. These conditions are generally elective, not covered by insurance, and with social sensitivities surrounding them. Hims & Hers focuses on four areas of healthcare: sexual health, men’s and women’s dermatology, mental health, and weight loss....
Beyond The Marketing Machine: Why Hims & Hers Stock Might Be Vulnerable