Hims

Company

Hims is telehealth company with direct to consumer prescriptions

Products

Hims offers direct to consumer prescription products.

Main Product Lines (% from Q2 2020)

 

  • Sexual Health (57%)
    • ED, PMJ, STD
  • Hair, derm, other (35%)
    • Hair: Prescription minoxidil and finasteride
    • Derm: Prescription retinol
  • Wholesale (7%)
    • non prescription
  • Mental Health( ?)
    • Anxiety & depression
    • Online therapy
  • Women’s Health (?)
    • Prescription birth control
  • Primary care
    • $39/visit

I was not able to find a recent breakdown of Hims product lines and I would be interested to see how their other segments are performing. In a recent Q3 earnings call, the CEO says that the mental health segment has doubled.

Currently, Hims does not take health insurance.

Business Model

  • Hims offers tele consults for prescription drugs and sends them directly to customers
  • 50% of order volume fulfilled from Ohio center (rest is fullfilled by 3rd party)
  • 332 Licensed providers for consults
    • They have nurse practitioners capable of prescribing some of their products
  • 4.6MM telehealth consultations since launch

Core Metrics

  • Revenue (Q3 21): 74M
    • F22: $264M
    • Online (Q3 21): 72M
    • Wholesale (Q3 21): 2M
    • Gross profit: 47M
    • Gross margin: 78%
  • Revenue (F21): 251M expected
  • Net Orders (Q3 21): 968k (+37%)
  • AOV (Q3 21): $74
  • Subscriptions: 551k (+76%)
    • 80% of customers are first time buyers
    • 88% long term retention
  • Marketing Spend = 67%
  • Selling, G&A = 55%
  • Operating loss = -23%

Partnerships

Celebrity Brand Ambassadors

  • Miley Cyrus (46.3M Twitter followers)
  • Jennifer Lopez  (45M Twitter  followers)
  • Rob Gronkowski (3.1M Twitter followers)

Analysis

Hims has a very compelling business model and vision. I believe in their mission to become a complete healthcare platform and change how people approach healthcare.

Hims has been a very fast growing DTC startup growing from $0->$100M in revenue in 2 years. They have scaled efficiently and continue to grow into new segments.

I think if Hims is able to accept insurance, they can break out in the primary care market. $39 out of pocket for a consult seems prohibitively high.

I believe Hims is quite undervalued with its high growth (+80% YoY), high subscription revenue (91% online subscription) and high gross margins (78%). While it currently trades at 8.5x revenue multiples, Hims has a lot of upside when investors finally wake up. If Hims is able to maintain its margins, growth rate and vertical expansions, we could see Hims become a 20B (10x upside) healthcare disruptor in 3 years.

tech investing