Hims & Hers Shares Plunge. Is This a Buying Opportunity or Should Investors Run for the Hills?

Core Viewpoint - Hims & Hers Health is experiencing significant revenue growth and expanding its subscriber base, despite volatility in its stock price and challenges in the weight loss segment [1][4][6]. Financial Performance - In Q2, Hims & Hers reported a revenue increase of 73% year-over-year, reaching $544.8 million, which was at the high end of its forecast but below analyst expectations [4][10]. - Monthly online revenue per subscriber rose by 30% to $74, and the total number of subscribers increased by 31% to nearly 2.44 million [4][10]. - Adjusted EBITDA surged to $82.2 million, a 109% increase from the previous year, and adjusted EPS was $0.17, exceeding analyst expectations [8][10]. Subscriber Growth - The number of customers using at least one personalized subscription grew by 89% to 1.5 million, making up over 60% of the subscriber base [5]. - The company noted a 170% increase in subscribers using personalized treatment plans for multiple conditions, reaching over 500,000 [5]. Marketing and Expenses - Marketing expenses increased by 50% to nearly $218 million, accounting for 40% of revenue, down from 46% a year ago, indicating improved efficiency [7][10]. - The gross margin was reported at 76%, reflecting a decrease of 500 basis points year-over-year [10]. Future Outlook - Hims & Hers maintains its 2025 revenue forecast of $2.3 billion to $2.4 billion, representing growth of 56% to 63%, and adjusted EBITDA guidance of $295 million to $335 million [10][11]. - For Q3, the company projects revenue between $570 million and $590 million, with adjusted EBITDA of $60 million to $70 million [11]. - The company is planning international expansion, starting with Canada and targeting Europe, Latin America, and Asia in the coming years [11][12]. Growth Opportunities - Hims & Hers is expanding into new areas, including hormonal health, which is expected to contribute to its long-term revenue goals of $6.5 billion by 2030 [12]. - The company continues to see strong growth across various health categories, despite challenges in the weight loss segment [13]. Valuation - The stock trades at a forward P/E ratio of around 55 based on 2025 analyst estimates, with a PEG ratio under 0.6, indicating potential undervaluation [14]. - The price-to-sales multiple is 5.5 times 2025 estimates, suggesting reasonable pricing given the high gross margins of the subscription business [14].