$HIMS is still a 10x opportunity from here.
Demand is exploding, margins are improving and it’s entering new markets.
Here is why $HIMS is still a great opportunity: 
- Revenue is exploding.
$HIMS revenue increased 5x in the last four years, from $270 million in 2021 to $1.2 billion in 2024.
This isn’t going to slow down anytime soon as Americans demand cheaper healthcare, especially drug prices.
- It’s rapidly expanding the margins.
Despite heavily investing in marketing and R&D to expand its product offering, it expanded the net margin from just 0.5% in December 2023 to 18% in September 2024.
It’s strong brand allows it to charge premiums over other compounders.
- Its financials are rock-solid.
It only has $11 million debt on balance sheet against $440 million in equity.
Its quarterly EBITDA can pay all the debt in the balance sheet two times.
This provides it with a wide legroom to ramp up investments and marketing to fuel growth.
- It’s generating crazy returns on investment.
It’s currently generating 34% return on invested which is two times more than the average of 12%.
This is extremely bullish as shareholder returns tend to converge to business’ return on its own investment.
- Its personalized subscriptions create a moat around the business.
Currently, more than 50% of all customers are opting in for personalized products which creates a significant switching cost on the customer level.
This way, it maximizes the lifetime customer value.
- It’s reinforcing its market leadership.
It already has 49% market share in telemedicine customers and this goes up to 54% among newcomers.
This means that over time, it’s going to increase its market leadership and keep taking market share from others.
- Market opportunity is immense.
The company entered the weight-loss market only last year and it still hasn’t entered the markets for sleep, fertility, diabetes and cholesterol drugs.
These combined make $121 billion short term market opportunity.
- Its gaining recognition by masses.
Most Americans noticed $HIMS and its services only after its SuperBowl ad was aired last Sunday.
Popularity of $HIMS has surged since then as its both of its apps are currently in top 10 in medical category on App Store.
- Institutions are buying.
Institutions are buying at the record pace as they have noticed its potential.
This trend isn’t going to slow down anytime soon as the new administration is supporting solutions to reduce healthcare spending for all Americans.
- Valuation is still extremely attractive.
Despite the recent surge in the stock price, it’s trading at historical low P/S levels.
It’s PEG ratio also currently stands at historical lows at around 0.30, indicating massive undervaluation.
Overall, the valuation is still extremely attractive.