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Hims & Hers Spotlight: Not Playing By the Rules in Healthcare
Going around the system is driving explosive growth.
Travis Hoium
May 24, 2024
Today’s deep dive is on Hims & Hers. Started in 2017, Hims & Hers offers pharmaceutical treatments directly to consumers, connecting them with a licensed doctor online to prescribe treatment. Andrew Dudum, Jack Abraham, and Hilary Coles incubated the company at Atomic.
This isn’t your traditional medical company or a traditional pharmacy. Hims & Hers is playing a different game and the numbers support that the strategy is working.
Why Hims & Hers Stock? In ~100 Words
The healthcare system in the U.S. is a mess. Incentives across the industry are misaligned, there’s no price transparency, and there are layers of bureaucracy that add no value to health.
Hims & Hers is trying to upend the status quo by going direct-to-consumer with a pharmacy that operates outside the traditional insurance system. This allows Hims & Hers to offer personalized solutions and generic drugs at competitive, transparent prices.
ED and hair loss treatments for men were the Trojan Horse for Hims & Hers into the industry, but we now see GLP-1 treatments entering the mix and eventually, we could see a very wide array of treatments coming from Hims & Hers.
Key Stats
Hims & Hers by the numbers:
Company: Hims & Hers
Ticker: HIMS
Market Cap: $3.40 billion
Revenue (ttm): $959.4 million
Gross Margin: 82.4%
Operating Margin: (0.5%)
Net Income (ttm): ($2.4 million)
Shares Outstanding and Y/Y Growth: 229.4 million up 10.8%
Earnings per share: $0.00
FCF (ttm): $62.7 million
Date Founded: November 2017
Founders: Andrew Dudum, Jack Abraham, and Hilary Coles
Hims & Hers Leadership:
Andrew Dudum is a co-founder and the current CEO. He is still heavily involved with Atomic and angel investing, a risk factor to consider for Hims & Hers.
Jack Abraham continues to run Atomic as CEO and is not involved in Hims & Hers day to day.
Hilary Coles was the SVP of brand and innovation until 2023 when she left the company.
The Strategy
How well does your doctor know you?
The average doctor visit is 18.9 minutes and it’s impossible to express your thoughts, concerns, and history to provide an optimal health plan in that amount of time. What if there was a better way?
Hims & Hers is building that better way with a health platform that gets to know you. The process starts with an intake questionnaire and moves to a virtual visit with a doctor before beginning your ongoing journey. You may start by looking for hair loss treatment or ED medication and come away with a personalized medication that treats you more effectively than anticipated.
As Hims & Hers learns more about its customers and more data is put in the system, we can see a path to Hims & Hers knowing far more about your medical needs than a doctor does today. Maybe Apple Heath data, eating habits, workouts, and more are automatically uploaded to the platform eventually?
It’s easy to look at Hims & Hers as the company we see today. You could dismiss this as “the ED site.” Or you could envision the products and services Hims & Hers could offer to customers years from now. That’s where I think we need to be thinking differently about the company.
GLP-1s were added last week and in the future, I could see going to Hims & Hers for my daughter’s annual epinephrine or my son’s inhaler, both of which are non-acute, regular prescriptions that fit the business model perfectly.
The more Hims & Hers gets to know about users, the more it can serve their needs. Going direct to consumers with sensitive prescriptions for ED, anxiety, and birth control is a great way to Trojan Horse its way into the industry.