Hims & Hers vs. Amwell: Which Telehealth Stock Is the Better Buy?

Virtual healthcare services, or telehealth, are rapidly becoming a standard of care in the expanding digital healthcare space. This is bringing a new class of tech-driven innovators to the forefront. Hims & Hers Health, Inc. HIMS and American Well Corporation AMWL, popularly known as Amwell, stand out as emerging players in the rapidly evolving medical consultations and digital health solutions space, catering to the growing demand for accessible healthcare.

Hims & Hers is a consumer-first platform transforming the way customers fulfill their health and wellness needs, while Amwell partners with healthcare providers to deliver telehealth solutions. With both companies showing promise, the question arises: which stock is the better buy at this moment? Let's delve deeper.

Stock Performance & Valuation: HIMS vs. AMWL

HIMS (up 35.1%) has outperformed AMWL (down 22.3%) over the past three months. In the past year, Hims & Hers has rallied 183% against Amwell’s decline of 20.3%.

Meanwhile, HIMS is trading at a forward 12-month price-to-sales (P/S) ratio of 4.6X, above its median of 2.3X over the past three years. AMWL’s forward sales multiple sits at 0.4X, below its last three-year median of 1.3X. While AMWL appears cheap when compared with the Medical sector average of 2.4X, HIMS seems to be expensive. Currently, both Hims & Hers and Amwell stocks have a Value Score of C.

3 Reasons to be Bullish on Hims & Hers

HIMS is pursuing a roadmap of rapid specialty expansion into new conditions that can be treated safely and effectively via telehealth, require ongoing and recurring customer relationships, and for which generic medication has been established as an effective means of treatment. Promising future care areas for Hims & Hers include sleep disorders and hypertension, which align with its current business model and are prevalent among its customers.

The strength of the Hims & Hers brand provides numerous opportunities to partner with and offer new solutions to help transform existing healthcare stakeholders. Last month, the company announced a long-term collaboration with Novo Nordisk to make obesity care and treatments more accessible, affordable and connected. Recently, HIMS launched six-month Wegovy access at $549/month, aiming to expand affordable obesity care with holistic weight loss solutions.

More than 65% of new subscribers in 2024 benefited from personalized products. The platform’s proprietary MedMatch AI tool aids in customizing treatment plans by considering factors like side effects and efficacy. Last month, Hims & Hers announced the appointment of Mo Elshenawy as the company’s new Chief Technology Officer. The appointment is expected to aid HIMS in accelerating its vision to build the next-generation healthcare platform, powered by AI and designed to deliver deeply personalized, accessible care at scale.

3 Reasons to be Bullish on Amwell

Amwell’s platform enables clients to leverage their own provider networks to treat their patients and members using virtual and digital modalities across the care continuum. Client providers utilize its enterprise platform and software solutions to address their patients’ needs, from primary care to chronic care management to specialty care.

Amwell’s Converge platform digitally enables care across all modalities — in-person, virtual and automated — through a single, unified system. It is interoperable with EHRs like Epic and Oracle Health, supports custom workflows and facilitates seamless care transitions, making it highly adaptable for large, complex health systems.

The Amwell Medical Group ensures nationwide clinical coverage with around 1,000 active behavioral health providers, supporting clients during off-hours or in underserved areas. Additionally, partnerships with renowned organizations like the Cleveland Clinic (for second opinions) and Hello Heart (for cardiometabolic care) extend Amwell’s offerings beyond core telehealth to specialized digital care solutions.

Comparing EPS Projections: Hims & Hers & Amwell

The Zacks Consensus Estimate for HIMS’ 2025 earnings per share suggests a 166.7% improvement from 2024.

The Zacks Consensus Estimate for AMWL’s 2025 loss per share implies an improvement of 49.7% from 2024.

Price Target: HIMS vs. AMWL

Based on short-term price targets offered by 15 analysts, the average price target for Hims & Hers comes to $43.00, implying a decline of 17.9% from the last close.

Based on short-term price targets offered by seven analysts, the average price target for Amwell comes to $10.00, implying an increase of 44.7% from the last close.

Choose Hims & Hers Over Amwell Now

While both Hims & Hers and Amwell are promising players in the digital health space, HIMS, a Zacks Rank #2 (Buy) stock, presents a more stable and financially sound investment opportunity at this stage. With strong profitability and margins along with consistently growing user engagement, Hims & Hers offers a capital-efficient model that generates substantial free cash flow and delivers steady returns.

Amwell, a Zacks Rank #3 (Hold) stock, is rapidly growing and expanding its clinical footprint. The company, together with its Leidos partners, advanced its progress in the staged launch of its full solution across the Military Health System. AMWL also made significant progress in its revenue quality and cost alignment measures. For investors seeking lower execution risk, financial predictability and a proven track record, Hims & Hers emerges as a more compelling choice. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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