Hims & Hers: A Healthcare Disruptor Undervalued at 3.7x Sales

Hims & Hers Health (HIMS) is riding a wave of hyper-growth few companies its size can match. With Q1 2025 revenue soaring 111% year-over-year to $586 million and a 16% Adjusted EBITDA margin, this digital health pioneer is defying skeptics—and its stock price hasn't caught up yet. At a forward sales multiple of just 3.7x, Hims & Hers trades as if it's a slow-growth relic, not a disruptor on track to hit $6.5 billion in revenue by 2030. Let's unpack why this valuation gap is a once-in-a-decade opportunity.

text2imgA vibrant, modern illustration of Hims & Hers' subscription-based healthcare ecosystem, featuring personalized care plans, telehealth consultations, and global reachtext2img

The Growth Engine: 111% Revenue Surge, Not a Fluke

Hims & Hers' Q1 results weren't just a one-time pop. Online revenue—the core of its subscription model—surged 115% to $576 million, while monthly revenue per subscriber jumped 53% to $84. This isn't mere volume growth; it's a signal of deepening customer engagement. With 2.4 million subscribers (up 38% YoY), the company is proving its ability to scale without sacrificing margins.

Critically, profitability is following. Adjusted EBITDA hit $91.1 million in Q1, tripling from $32.3 million in 2024. Even as gross margins dipped slightly (to 73% from 82%), operational efficiencies in fulfillment and AI-driven personalization are fueling a 13–14% full-year EBITDA margin target. This blend of top-line fire and bottom-line discipline is rare in high-growth sectors.

Five Growth Levers Powering the Next Decade

Hims & Hers isn't resting on its subscription model. It's executing a five-pronged strategy to dominate healthcare's $5 trillion addressable market:

1. Hyper-Personalization: Leveraging AI to tailor treatments for conditions like dermatology, mental health, and chronic disease management.
2. Specialty Expansion: Entering new verticals (e.g., diabetes care, women's health) to reduce reliance on its core hair-loss and erectile dysfunction offerings.
3. Pharma Partnerships: Collaborating with drugmakers to bundle prescriptions with telehealth consultations, creating sticky revenue streams.
4. Global Scaling: Expanding beyond the U.S. into Europe and Asia, where digital health adoption is accelerating.
5. AI Integration: Using machine learning to optimize diagnostics, reduce treatment costs, and improve outcomes.

These moves aren't just incremental—they're redefining healthcare access. The company's 2030 targets ($6.5B revenue, $1.3B EBITDA) are achievable if it captures even 5% of its target markets.

Valuation: A 5-7x Upside If Growth Holds

Let's compare Hims & Hers' valuation to its peers. While its forward sales multiple of 3.7x is low, peers like Teladoc (TDOC) trade at 4.2x, and Owlet (OWLV) at 18x. But Hims & Hers is growing 3x faster than Teladoc (58% vs. 18% annual revenue growth) and has higher margins.

If Hims & Hers reaches $6.5 billion in revenue by 2030, even a conservative 5x forward sales multiple would value the company at $32.5 billion—over 5x its current market cap of $6.3 billion. Factor in margin expansion, and the upside could be 7x or higher.

Risks, but They're Manageable

• Regulatory Scrutiny: The FDA's focus on telehealth could slow approvals.
• Market Saturation: Subscription fatigue could cap subscriber growth.
• Profitability Pressures: Gross margins may dip further as the company scales new specialties.

However, Hims & Hers' cash reserves ($273 million) and free cash flow ($50 million in Q1) provide a cushion. Its partnerships with pharma giants (e.g., Pfizer, AbbVie) also reduce reliance on one-sided revenue streams.

Investment Thesis: Buy the Dip, Hold for 2030

Hims & Hers is a rare stock: a hyper-growth company with defensible moats (subscription stickiness, AI-driven personalization) and a valuation that ignores its trajectory. At current prices, investors are paying 3.7x sales for a business that could grow 11% annually until 2030.

Action Items:
- Buy on dips below $50/share, with a 12–18-month price target of $150+ (assuming 5x 2030 sales).
- Watch for catalysts: Q2 revenue guidance, new partnerships, and margin improvements in 2025.

Conclusion

Hims & Hers is the Amazon of healthcare—building a platform that owns the customer relationship, leverages data for personalization, and expands into adjacent markets. Its valuation is stuck in 2020, while its future is in 2030. For investors with a 5–7 year horizon, this is a buy-and-hold rarity.

text2imgA graph showing Hims & Hers' projected revenue trajectory from $586M (2025) to $6.5B (2030), with a dotted line illustrating potential stock price appreciationtext2img