Research Article

It Is Time To Buy Hims & Hers (HIMS) Stock

Nov 24, 2023

Updates

Business Overview / Sources of Revenue

Hims & Hers Health (ticker: HIMS) is a direct-to-consumer telehealth company providing access to prescription and over-the-counter medications, wellness products, and personal care items through its digital platform[1][4]. The company connects customers with licensed healthcare professionals for telehealth consultations and offers treatments in areas such as sexual health, hair loss, dermatology, mental health, weight management, and primary care[1][4][5].

Revenue is earned primarily through a combination of subscription services, one-time product purchases, and retail partnerships[5]. As of 2024, subscriptions are a major source of income, supported by strong customer retention (82% after three months), with one-time sales and retail placement supplementing recurring revenue[5]. The company's 2024 revenue reached approximately $1.48 billion, with significant contributions from weight management and mental health segments—each projected to generate over $100 million annually by 2025[5]. Exact percentage breakdowns are not disclosed, but subscriptions represent the largest share[5].

Revenue Growth Potential and Recurrence

Hims & Hers Health (HIMS) has a large share of recurring revenue, with approximately 90% of its total revenue coming from its subscription-based model built around monthly prescription products and wellness services[4]. This model creates a highly predictable and stable income stream. The company’s revenue growth has been strong, with revenue up 69% year-over-year in 2024 to $1.5 billion, and Q1 2025 revenue increasing 111% year-over-year[1][3][5]. Analysts project HIMS’s revenue to exceed $2 billion in 2025, and longer-term growth is expected to remain robust as telehealth adoption expands, supported by innovations in AI and personalized care. While precise 5-year growth rates are not specified, the current trajectory suggests strong double-digit annual growth is likely to continue in the near-to-medium term[4].

Economic Moat Factors

Hims & Hers Health (HIMS) possesses a **narrow economic moat** anchored mainly by its strong brand identity, high customer retention from recurring subscriptions, and scale advantages in telehealth delivery[1][3][4]. The company’s vertical integration—owning its network of providers and pharmaceutical facilities—supports lower costs and attractive margins, giving it a cost advantage over many competitors[5]. Subscriptions generate stable, recurring revenue, with approximately 85% two-year retention and higher-than-average stickiness in key categories[4]. However, switching costs and network effects remain moderate, and the moat is not yet wide; the company’s offerings can be replicated by larger or new entrants in the fast-evolving telehealth sector[1][3]. Thus, Hims & Hers demonstrates early signs of building a durable competitive advantage, but its moat’s current strength is limited primarily to brand and operational efficiencies, rather than unique assets or insurmountable barriers to entry[1][3][4][5].

Leadership

Hims & Hers Health (ticker: HIMS) is led by co-founder and CEO Andrew Dudum, who has held the CEO role since the company’s founding in September 2016[2][3]. Dudum is an entrepreneur with a background in startup creation and investment, previously co-founding Atomic Labs[2]. As a founder and board member, he maintains a significant leadership presence, though his current exact ownership stake is not specified in the search results. The broader leadership team includes experienced executives like COO Melissa Baird, noted for her operations and technology leadership background[2].

Financial Health

Hims & Hers Health (HIMS) demonstrates strong financial health, with its latest balance sheet showing a cash and short-term investments position of $1.35 billion and no long-term debt, indicating a robust cash-to-debt ratio[3]. The company is now generating positive free cash flow, reporting a Q1 2025 free cash flow margin of approximately 6%[3]. Hims & Hers has been dilutive over time—its basic and diluted share counts have steadily increased, with no evidence of share repurchases in recent filings[3]. Overall, Hims & Hers is financially sound and investing heavily in growth.

Last updated Jun 13, 2025