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Hims & Hers: Investors Don't Believe in Remote Cosmetology

US Dollar Index, index, Hims & Hers: Investors Don\'t Believe in Remote Cosmetology

Hims & Hers is engaged in the sale of a large number of drugs: from personal care products and dietary supplements, to medicines for erectile dysfunction and hair loss. Products on the platform are more expensive than in pharmacies or stores, but consumers are willing to overpay thanks to a competent PR campaign by Hims & Hers. Do not forget that the service takes place remotely, and the price includes a comfortable delivery. Initially, the focus was on the areas where patients are ashamed to go to doctors, but the list of services continues to increase.

The company also provides remote primary health care, conducts psychological examinations, and tests people for SARS-CoV-2. At the moment, the management is considering opportunities to enter the market of chronic diseases: diabetes, infertility, sleep disorders, etc.

The company went public only recently, after merging with Oaktree Acquisition SPAC, so the report for the fourth quarter was the first publication of financial results to the general public. Revenue increased by 67%, to $41.5 million – the growth rate slowed significantly compared to the third quarter (+91%). By the end of 2021, the management expects to earn 30% more than in 2020 – $179 million. This forecast was much lower than expected ($193 million). The situation is worsened by the fact that in the first quarter it is expected to grow by 63%, which means that in the following quarters the revenue will increase at an extremely slow pace. In other words “a "growing" company will stop growing at a high rate and justify its inflated fundamental valuation.

Let's not forget about a large number of competitors: Lemonaid Health, GoodRx, LifeMD, which provide similar services. The value of HIMS shares has collapsed by 44%, but it is unlikely to be able to fully recover in the absence of really serious prerequisites.

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