Hims & Hers: A Mispriced Growth Story at $36

The stock of Hims & Hers (NYSE: HIMS) has fallen to $36.93 as of May 12, 2025, following a post-earnings dip that investors are misinterpreting as a signal of weakness. In reality, this volatility creates a rare entry point for long-term investors. While the market fixates on short-term risks—such as semaglutide phase-outs and regulatory uncertainty—the company’s structural growth catalysts, undervalued metrics, and secular tailwinds position it for a rebound. Let’s dissect why this dip is a buying opportunity.

Valuation Discount: A 30x P/E vs. Growth at 111%

Hims & Hers trades at a forward P/E of 30, below its historical average of 33 and significantly cheaper than peers like Teladoc (TDOC) and Oscar Health (OSCR), which trade at 40x-50x multiples. This discount is irrational given the company’s 111% year-over-year revenue growth in Q1 2025 ($586 million) and its $44 2-year price target (per analyst consensus). Even with cautious near-term guidance, its $6.5 billion 2030 revenue target suggests a 10x upside from current levels.

The market’s skepticism is misplaced. While Q2 revenue guidance ($530–$550 million) fell short of Street estimates, this reflects deliberate caution amid macroeconomic headwinds—not structural issues. The company reaffirmed its full-year $2.3–$2.4 billion revenue target, which requires just 18% sequential growth from Q1, a conservative bar for a firm scaling personalized health solutions.

Growth Catalysts: Scalable Subscriptions and Margin Expansion

The company’s 2.4 million subscribers (up 38% YoY) and $84 monthly revenue per subscriber highlight the power of its subscription model. This recurring revenue stream is a moat against competitors, as customers increasingly value personalized care. Margins, too, are improving: Adjusted EBITDA rose to $91 million in Q1, up from $32 million in 2024. Management’s focus on GLP-1 diversification—beyond semaglutide—will further stabilize revenue.

The partnership with Novo Nordisk to distribute Wegovy via telehealth platforms is a $1 billion+ opportunity alone. Even as semaglutide sales decline, Hims & Hers is expanding into mental health, dermatology, and women’s health, reducing reliance on any single product.

Near-Term Risks: Manageable, Not Existential

Bearish arguments center on semaglutide phase-outs and regulatory scrutiny of telehealth drug distribution. While these pose short-term headwinds, they are not existential. The company’s subscriber base growth and free cash flow ($50 million in Q1) signal a business model capable of weathering these storms.

Regulatory risks are industry-wide, not unique to Hims & Hers. The company’s proactive compliance efforts—such as stricter medical review protocols—mitigate these concerns.

Why Act Now? The Mispricing of Execution Risk

The dip post-Q1 results reflects an overcorrection. Investors are pricing in near-term slowdowns while ignoring the company’s five strategic levers:
1. Deeper personalization via AI-driven health plans,
2. New specialty expansions (e.g., diabetes care),
3. Enhanced subscriber experiences through telemedicine integrations,
4. Strategic partnerships (e.g., Novo Nordisk, drug manufacturers), and
5. Geographic expansion into international markets.

These initiatives, not short-term guidance, will drive long-term value. With $295–$335 million in 2025 Adjusted EBITDA (up from $122 million in 2024), the company is scaling profitability while growing revenue.

Conclusion: A 10x Upside Awaits Patient Investors

Hims & Hers is a $36 bargain for those who recognize that its valuation discount is temporary. The market’s fixation on near-term risks ignores the secular tailwinds of telehealth adoption, GLP-1 diversification, and subscription scalability. With execution risks already priced in and a $44 target on the horizon, this is a multi-year opportunity.

Act now: The $36 entry offers a margin of safety. The next catalyst—a Q2 earnings beat or a new partnership—could ignite a swift rebound. This is not just a stock; it’s a future of healthcare at a discount.

Disclosure: The analysis is based on publicly available data and does not constitute personalized investment advice. Readers should conduct their own due diligence.