HIMS Q3 Estimates Unchanged Before Earnings: How to Play the Stock?

Core Viewpoint - Hims & Hers Health, Inc. is set to report its third-quarter 2024 results, with expectations of significant revenue growth and stable earnings per share compared to the previous year [1][2]. Financial Performance - The Zacks Consensus Estimate for third-quarter 2024 revenues is $384.2 million, reflecting a 69.5% increase from the same quarter last year [2]. - The consensus estimate for EPS is 6 cents, an improvement from a loss of 4 cents per share in the prior-year period [2]. - Over the last four quarters, the company has outperformed the Zacks Consensus Estimate three times, with an average earnings surprise of 71.7% [1][3]. Subscriber Growth - Hims & Hers has seen strong market acceptance, ending Q2 2024 with nearly 1.9 million subscribers, a 43% year-over-year increase [4]. - The company added over 155,000 net new users in the last quarter, with more than 40% of subscribers utilizing personalized solutions, marking a significant increase [4]. Product Expansion - The company has expanded its weight loss specialty by launching compounded GLP-1s across more than 30 states, covering over 60% of the U.S. population, with plans for nationwide availability by year-end [5]. - Hims & Hers is investing in personalized offerings and plans to launch new multi-condition treatments, focusing on interspecialty expansions [14]. Valuation Metrics - Hims & Hers has a forward 12-month price-to-sales (P/S) ratio of 2.2X, which is lower than the industry average of 3X, indicating potential for growth relative to expected sales [10]. - The stock has gained 111.6% year-to-date, outperforming the Medical Info Systems sector's decline of 48.8% and the S&P 500's rise of 20% [8]. Long-Term Outlook - The company is expected to maintain strong performance through 2024, driven by continued growth in net subscribers and optimistic management regarding product offerings [12]. - Recent initiatives, such as offering compounded GLP-1 subscriptions for $99 monthly to eligible groups, are anticipated to boost revenues [13]. Investment Considerations - The stock currently holds a Zacks Rank of 3 (Hold), with an Earnings ESP of -11.42%, suggesting lower chances of beating estimates [6][7]. - Despite the potential for growth, it may be prudent for new investors to wait for the earnings release before adding to their portfolios, while existing investors may consider holding their shares [17].