After Another Blowout Quarter of Surging Revenue, Is Hims & Hers Stock a Once-in-a-Decade Buy?

Core Viewpoint - Hims & Hers Health has demonstrated strong financial performance, with significant revenue growth driven by factors beyond GLP-1 drugs, despite stock volatility related to this category [1][8]. Financial Performance - Revenue for Hims & Hers surged 77% year over year to $401.6 million, exceeding both the company's forecast and analyst consensus [3]. - Net orders increased by 20% to 2.66 million, while average order value (AOV) rose by 48% to $147 [3]. - Adjusted EBITDA grew to $51.1 million from $12.3 million a year ago, and adjusted earnings per share (EPS) reached $0.32, significantly above the expected $0.10 [6]. - Operating cash flow more than tripled to $85.2 million, and free cash flow was reported at $79.4 million, over four times last year's figure [6]. Subscriber Growth - The subscriber base increased by 44% year over year to 2.05 million, with 180,000 net new subscribers added in the quarter [4]. - Over half of the subscribers are now using personalized subscriptions, and the female-focused segment is experiencing significant growth [4]. Marketing and Guidance - Marketing expenditure rose to $182.3 million, a 57% increase, but as a percentage of revenue, it decreased to 45% from 51% a year ago, indicating improved marketing efficiency [6]. - The company raised its full-year revenue guidance to between $1.46 billion and $1.465 billion, with adjusted EBITDA expected between $173 million and $178 million [7]. GLP-1 Drug Impact - The majority of subscribers are not using GLP-1 drugs, with a 40% year-over-year growth in the subscriber base excluding GLP-1 users [5]. - Estimated revenue contribution from GLP-1 drugs is around $30 million, accounting for approximately 10% of total revenue for the quarter [9]. Valuation Metrics - Hims & Hers is valued at a forward price-to-earnings (P/E) ratio of under 26 based on 2025 estimates, which is considered inexpensive given its high revenue growth [10]. - The PEG ratio stands at 0.1, indicating a strong growth potential relative to its valuation [10]. Long-term Outlook - The company is expected to introduce the first generic GLP-1 drug to its platform next year, enhancing its product offerings [11]. - Hims & Hers employs a compounding personalization strategy across its portfolio, suggesting a diversified approach beyond GLP-1 drugs [12].