Hims & Hers: Rocket Fuel or Bubble? Q2 Results Signal Growth, But Can It Last?

The telehealth sector is booming, and Hims & Hers Health, Inc. (NASDAQ: HIMS) has just fired another rocket booster into its trajectory. The company's Q2 2025 guidance and Q1 results, released earlier this month, reveal a company on a tear—but investors must ask: Can this pace endure, and does it justify the stock's current price? Let's dive into the numbers.

The Numbers: Growth at a Breakneck Pace

Hims & Hers' Q1 2025 revenue skyrocketed 111% year-over-year to $586 million, with net income jumping to $49.5 million—a staggering improvement from $11.1 million in Q1 2024. The company's subscriber base hit 2.4 million, up 38% from last year, while monthly revenue per subscriber surged 53% to $84. This isn't just about acquiring customers; it's about monetizing them more effectively.

But here's the kicker: Hims & Hers is now projecting $2.3–$2.4 billion in full-year revenue for 2025, with Adjusted EBITDA margins expanding to 13–14%—a sharp contrast to its razor-thin margins just two years ago. The company's long-term vision? A $6.5 billion revenue target by 2030, with EBITDA of $1.3 billion.

The Growth Levers: Where's the Fuel?

Hims & Hers isn't resting on its laurels. It's doubling down on five strategic pillars:
1. Deepening personalization: Using data to tailor healthcare solutions.
2. Expanding into new specialties: Think dermatology, mental health, and chronic care.
3. Enhancing subscriber experiences: Retaining users through better engagement.
4. Partnerships: Collaborating with insurers and pharmacies to scale.
5. Global expansion: Testing new markets beyond the U.S.

The shift away from transactional metrics like “Net Orders” and “Average Order Value” signals a strategic pivot to subscription-based revenue, which is more predictable and lucrative. With free cash flow up to $50 million in Q1 (from $11 million in 2024), the company has the liquidity to fuel its ambitions.

The Red Flags: Margins and Competition

But not all is rosy. Gross margins dipped to 73% in Q1 from 82% in 2024, due to a “business mix change”—likely a reflection of higher-cost services or fulfillment. While EBITDA margins are improving, the Q2 guidance of 12–14% suggests some pressure.

Meanwhile, the telehealth space is heating up. Giants like Teladoc (TDOC) and Amwell (TWEL) are circling, and startups are popping up daily. Can Hims & Hers maintain its edge? Its focus on personalization and subscriber growth is a start, but execution is key.

Investor Engagement: Canaccord and Beyond

The company's August 4 Q2 earnings call and its appearance at the Canaccord Genuity Growth Conference on August 13 are critical moments. Investors will scrutinize:
- Whether Q2 revenue hits the $530–550 million target.
- How the company plans to sustain margin expansion amid rising competition.
- Progress on its 2030 goals.

These events could be catalysts for the stock—if management delivers clarity and confidence.

Valuation: Overpriced or a Bargain?

The question investors must ask: Is Hims & Hers' stock a steal at its current price, or are investors overpaying for growth? Let's look at the numbers:

At a market cap of ~$4.5 billion (assuming a recent stock price of ~$22), Hims & Hers trades at a P/S ratio of ~2x based on 2025 revenue guidance. That's cheaper than Teladoc's 3.5x and Amwell's 4.0x, but the company's growth rate is far higher. If it can maintain 50%+ annual revenue growth for the next five years, this valuation could look conservative.

The Bottom Line: Buy, Hold, or Sell?

Hims & Hers is a high-octane stock with a clear vision and execution to match. The subscriber-driven model, combined with its $50 million+ free cash flow, suggests it can fund growth without diluting shareholders.

BUT—investors must monitor margins and competitive threats. If gross margins stabilize or improve, and the Canaccord presentation sparks institutional buying, this could be a buy.

Action Alert: For growth investors willing to bet on telehealth's future, Hims & Hers is worth considering. But tread carefully: This is a high-risk, high-reward play. If you buy, set a strict stop-loss and keep an eye on those Q2 results.

The verdict? Hold for now—wait until the Q2 numbers and Canaccord presentation clarify the path ahead. If the company hits its targets, this could be the next Warby Parker story. If not? Buckle up.

Investment Takeaway: Hims & Hers has the momentum, but the road to $6.5 billion by 2030 is littered with potholes. Stay tuned to August's events—they'll decide if this stock is a rocket or a dud.