Is. Hims and hers stock a good investment
11/4/2024 04:30am
**Hims & Hers Health (HIMS) stock presents a mixed investment profile**, making it a speculative buy with high-risk but potentially high-reward. Here's a detailed analysis:
1. **Financial Performance and Growth**:
- HIMS has demonstrated strong revenue growth, with a 51.82% increase in total revenue to $315.65 million by Q3 2024.
- Net income has grown significantly, with a 285.79% year-over-year increase to $13.3 million.
- The company's diluted EPS has also seen a 20% quarter-over-quarter growth.
2. **Valuation Metrics**:
- The stock's P/E(TTM) ratio is negative at -1879.94, which could indicate that the company is not profitable according to this metric. However, a positive P/E ratio of 12.21 suggests that the market is willing to pay a premium for the company's earnings.
- The P/S ratio is 3.72, which is relatively low and could suggest that the stock is undervalued based on its sales.
3. **Market Sentiment and Analyst Ratings**:
- The consensus rating for HIMS is "Neutral" with an average price target of $22.17, which is slightly above the current trading price.
- Recent insider selling activity could be a red flag for some investors, but it's important to consider the context and the reasons behind these sales.
4. **Technical Indicators**:
- The stock's 5-day and 10-day moving averages are $20.71 and $21.48, respectively, which are above the current trading price, suggesting a potential upside.
- The 50-day moving average is $18.05, which is below the current price, indicating a potential for the stock to consolidate or correct.
5. **Future Prospects**:
- Leerink Partners has raised its price target to $26.00 and maintained a "Market Perform" rating, indicating confidence in the company's strong revenue outlook.
- The company is expected to report earnings of $0.06 per share in its upcoming release, which would represent year-over-year growth of 250%.
- However, there are concerns about the sustainability of GLP-1 sales and the potential impact on the company's overall growth trajectory.
6. **Conclusion**: HIMS stock shows potential for growth, as evidenced by its strong financial performance and positive analyst revisions. However, the negative P/E ratio and recent insider selling, along with the cautionary notes regarding scalability issues and the sustainability of GLP-1 sales, suggest that this is a high-risk investment. Investors should carefully consider their risk tolerance and investment horizon before making a decision.