HIMS Stock Skyrocketed—Still Room to Run?

HIMS has become a star in the stock market, with its share price surging more than tenfold over the past few years. Its latest Q1 earnings once again beat expectations. However, while hims unveiled a 2030 revenue target of “at least $6.5 billion,” this fell short of the $7.8 billion Wall Street consensus estimate.

Nevertheless, the company’s CEO struck an optimistic tone, stating, “More collaborations are coming. Expect broader partnerships across the industry, including pharmaceutical players, innovative leaders in diagnostic and preventative testing, and world-class providers.” He added, “We believe this will strengthen our ecosystem and position us to curate a best-in-class offering that can reach tens of millions of people.”

Ask Aime: Can HIMS stock continue its surge after setting an ambitious 2030 revenue target?

💊 Weight Loss Pivot: A Game Changer

The company’s business model underwent a dramatic transformation over the past year with its foray into the weight-loss market. In early 2024, Hims began offering a legal compounded version of Novo Nordisk’s Wegovy, produced by a compounding pharmacy. This alternative, known as compounded semaglutide, was sold at a fraction of Novo’s list price.

Although regulatory moves have effectively ended the era of compounded semaglutide, Hims remains bullish on its prospects. In February, the company reiterated its forecast of at least $725 million in weight-loss revenue in 2025, representing 30% of its total expected revenue—even without compounded semaglutide.

While it hasn't disclosed its 2024 weight loss revenue specifically, it confirmed that its GLP-1 sales reached $225 million that year.

📊 A Rerating May Be Justified

Now, with a clearer strategy integrating obesity treatments and branded medications, Hims may warrant a higher valuation multiple. Forbes has argued that long-term investors could view dips in HIMS stock as buying opportunities, potentially setting the stage for significant long-term returns.

The company has issued long-term margin guidance targeting a 25% EBITDA margin and 75% gross margin by 2030. Assuming these targets are met—and Hims has historically outperformed its guidance—the implied 2025 profit, based on $2.35 billion in revenue, would be $590 million.

Assuming a 60% revenue growth rate and assigning a 60x P/E multiple, this suggests a potential market cap of $35 billion, translating to a stock price of approximately $150 per share.

📉 Current Valuation Is Undemanding

Currently, Hims trades at $40 per share, with a market cap of $9.1 billion. This implies a 2025 price-to-sales (P/S) ratio of just 3.9x. If the company achieves its 25% profit margin target, the implied P/E ratio would be only 15.5x—an unreasonably low valuation for a company growing revenue at a conservative estimate of 60%, and likely much faster.

At this stage, assigning a 15x P/S ratio—which corresponds to a 60x implied P/E based on long-term margins—appears more reasonable.

🚀 2025 Projections: Room for Significant Upside

We estimate that Hims could achieve $2.8–$3.0 billion in revenue in 2025. Using the midpoint ($2.9 billion), this represents a 95.9% revenue growth. Assuming a 25% margin, implied profits would reach $725 million.

With higher growth rates, the stock should command a higher valuation. Applying a 96x P/E ratio, Hims could reach a $70 billion market cap, representing significant upside from current levels.

🤝 Partnerships: More to Come?

So far, novo nordisk has been Hims’s first major partner in 2024—but it may not be the last.