The Few Bets That Matter
Concentrated Equity Investor, AI Infrastructure
Hims & Hers is not a $100 stock yet, because growth is slowing and there is no new driver on the scale of GLP-1. Customer acquisition and conversion are slowing and average spend per user is declining, which quarter-over-quarter figures show better than the 40%+ year-over-year narrative. Guidance was narrowed and comparisons get harder. Investing on past strong growth is looking backward. Hims is a great company, but the stock will take time to reach new highs. x.comÂ
Hims & Hers suffers from bad management, and government pressure is squeezing its pharma margins. x.comÂ
Hims & Hers is executing poorly despite its potential, and its appeal as a retail darling is fading after a rough first quarter. Per @himshouse, revenue was $608 million versus $617 million expected, EPS was -$0.40 versus $0.03 expected, and gross margin fell to 65% from 73% a year earlier, while subscribers grew 9% to 2.584 million. CEO Andrew Dudum can do better. x.comÂ
Hims & Hers' growth is on sale at a PEG of about 0.8 because last year's crash left the stock cheap. Revenue grew 40% to $753M last quarter and full-year guidance was raised to $3.3B; sub-1 PEGs are usually born from drawdowns like that. x.comÂ
Hims & Hers' latest earnings show a deteriorating business, and hype is not worth much when that happens. x.com x.comÂ
Hims & Hers is a meme stock, not a fundamental story, after missing EPS by 1,440%, with earnings down 300% year over year and 600% quarter over quarter. The company pays influencers to pump the stock, and even a move to $200 would not change that view. x.com x.comÂ
Hims & Hers has enormous long-term potential from its brand, personalized platform and recurring model, and that upside heavily outweighs the bear case. Regulation and customer retention are real questions, and they explain why the opportunity exists. x.comÂ
Hims & Hers looks good on paper, but past revenue growth does not guarantee future growth and margins are falling, which is very bad. Its peptides story could rerate the stock if executed, but it brings another regulatory overhang: peptides will be in regulation headlines every day and the stock will trade on them. x.comÂ
Hims & Hers is going through a major transition period with no growth, so it is not worth owning right now, even though the long-term view remains bullish. x.comÂ
Hims & Hers' compounding direct-to-consumer distribution makes it stupidly undervalued next to Tempus AI. Hims has $2.6B in trailing revenue at a $6.7B market cap, with 66.5% annual revenue growth from Q3 2021 to Q2 2026; Tempus has $1.4B in revenue, a $14.9B market cap and 40.4% annual growth. x.comÂ
Hims & Hers' shrinking free cash flow is weighing on the stock, since share prices follow a company's ability to generate free cash flow over time. Over the last 12 months, free cash flow fell 65% and the stock fell 44%. x.comÂ
