Hims & Hers Health, Inc. (HIMS): A Bull Case Theory

We came across a bullish thesis on Hims & Hers Health, Inc. (HIMS) on Substack by Antonio Linares. In this article, we will summarize the bulls’ thesis on HIMS. Hims & Hers Health, Inc. (HIMS)'s share was trading at $31.05 as of April 1^st. HIMS’s trailing and forward P/E were 58.58 and 52.08 respectively according to Yahoo Finance.

Hims & Hers Health (HIMS) represents a compelling long-term investment opportunity, poised to scale exponentially as its free cash flow per share grows. The company operates in a category with minimal true competition, led by an exceptional management team that has demonstrated a world-class ability to acquire and retain customers while expanding its revenue per subscriber. Its direct-to-consumer healthcare model is fundamentally resetting consumer expectations, much like Netflix and Spotify did in their respective industries.

Despite competition from larger players, Hims continues to differentiate itself through a superior user experience and an expanding suite of personalized treatments. Its ability to aggregate proprietary data at scale enables it to refine its offerings, strengthening its competitive position. While some market participants question whether Hims has an enduring moat, historical precedents suggest that network- and data-defined moats often become apparent only after reaching critical mass. Amazon and Spotify, once doubted, eventually proved the power of their ecosystems. Hims is following a similar trajectory, with its comprehensive platform making it increasingly difficult for competitors to replicate its success.

The company remains significantly undervalued, trading at just over 5x sales, a multiple that does not fully reflect its growth potential due to lingering skepticism over its competitive advantage. However, its ability to scale personalized treatments and expand into new healthcare verticals reinforces the argument that it is constructing a formidable moat.

Looking ahead, AI advancements could further accelerate Hims' growth, transforming it from a direct-to-consumer healthcare provider into a fully integrated AI-driven health platform. If realized, this shift would position the company at the center of the healthcare ecosystem, fundamentally altering the way medical services are delivered. As Hims continues to execute its vision, its potential to become the dominant force in digital healthcare remains substantial.

Hims & Hers Health, Inc. (HIMS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held HIMS at the end of the fourth quarter which was 31 in the previous quarter. While we acknowledge the risk and potential of HIMS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HIMS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.