The Growth of Hims & Hers: A $1,000 Investment’s Journey from IPO to Now

In January 2021, Hims & Hers Health, Inc. (NYSE: HIMS) emerged as a publicly traded company through a merger with Oaktree Acquisition Corp., a special purpose acquisition company (SPAC). This strategic move positioned the digital health startup at the forefront of a sector reshaped by pandemic-era demand for telehealth services. Today, nearly four years after its initial public offering (IPO), investors who placed a $1,000 bet on Hims & Hers at its $10-per-share debut can reflect on a journey marked by volatility—and striking long-term gains.

The IPO: A SPAC-Driven Launch

Hims & Hers’ IPO was anything but conventional. By merging with Oaktree Acquisition Corp. on January 20, 2021, the company bypassed traditional IPO processes, securing $279.5 million in proceeds—$204.5 million from the SPAC’s trust account and $75 million from private investors. The transaction valued the company at $1.6 billion, with shares beginning trading at $10 on January 21. This structure allowed Hims & Hers to retain executive control while accessing capital to scale its subscription-based telehealth platform, which offered services ranging from dermatology to mental health.

The Performance: From $10 to $41.88 Per Share

The stock’s trajectory has been uneven but ultimately rewarding for long-term investors. On its first trading day, HIMS surged to $29.81, fueled by optimism about its growth potential. However, the shares faced headwinds in subsequent years, dipping as low as $3.50 in early 2023 amid broader market skepticism toward high-growth tech stocks and concerns about Hims & Hers’ path to profitability.

By May 5, 2025, however, the stock had rebounded to close at $41.88—a 319% increase from its $10 IPO price. A $1,000 investment at the IPO would thus have grown to $4,188, reflecting a compound annual growth rate (CAGR) of approximately 46% over four years. This outperformance contrasts sharply with the S&P 500’s roughly 12% CAGR over the same period.

The Drivers of Growth: Revenue, Margins, and Strategy

Hims & Hers’ success stems from its subscription-based model and focus on high-margin telehealth services. As of Q3 2020, the company reported 91% year-over-year revenue growth, with gross margins hitting 76%—a testament to its scalable business model. By 2025, revenue had expanded further, driven by:
- Geographic Expansion: Entry into the U.K. market and partnerships with international pharmacies.
- Product Diversification: Launch of an electronic health record (EHR) system and over-the-counter (OTC) products, reducing reliance on prescription drugs.
- Subscription Penetration: Growth of its $20–$30/month unlimited care plans, which accounted for 91% of recurring revenue by 2023.

Despite these gains, Hims & Hers remains unprofitable, with a $69 million net loss in 2019 and ongoing reinvestment in infrastructure. However, its cash reserves, bolstered by the SPAC merger and subsequent fundraising, have provided flexibility to navigate challenges.

The Risks: Competition and Profitability Pressures

The road ahead is not without hurdles. Hims & Hers faces fierce competition from established telehealth giants like Teladoc (TDOC) and Amwell (AMWL), as well as retail pharmacies like CVS Health (CVS) and Amazon (AMZN). These rivals have deeper pockets and broader ecosystems, complicating Hims & Hers’ efforts to dominate niche markets.

Moreover, its reliance on a subscription model—while profitable—exposes it to customer churn risks. Retaining users amid rising costs and a saturated digital health market will be critical.

Conclusion: A Story of Resilience and Potential

Hims & Hers’ journey underscores the high-risk, high-reward nature of investing in fast-growing tech-enabled health companies. A $1,000 investment at its $10 IPO price has multiplied to $4,188 by 2025, driven by strategic bets on telehealth and subscription economics. Yet this success is not guaranteed to continue; profitability and market share remain elusive.

For investors, the decision hinges on whether Hims & Hers can:
1. Achieve operational efficiency: Reduce losses while scaling revenue.
2. Differentiate its offerings: Innovate beyond its core male-focused audience and OTC products.
3. Withstand competition: Outmaneuver larger rivals through agility and customer-centricity.

The data is clear: Hims & Hers’ stock has delivered exceptional returns for patient investors. Whether this trajectory endures will depend on its ability to evolve in a rapidly changing healthcare landscape—one where innovation and execution are the ultimate currencies.