How to Invest in Hims & Hers Health (HIMS)

Founded in 2017, Hims & Hers Health (HIMS 0.85%) is a telemedicine company that sells prescription and over-the-counter drugs online directly to consumers. Originally, the company was founded as Hims Inc. and focused on providing wellness solutions to male patients dealing with sensitive health concerns such as erectile dysfunction and hair loss. However, the company quickly expanded beyond this arena to focus on both men's and women's health.

Today, Hims & Hers Health provides customers in all 50 states and Washington D.C. access to consultations, primary care services, and other virtual care services from licensed healthcare professionals 100% online. The platform covers specialties that include dermatology, mental health, weight loss, and sexual health. In addition to an extensive provider network that includes physicians, dermatologists, pharmacists, psychiatrists, nurse practitioners, and wide-ranging telehealth services, users can pay to have both prescription and nonprescription products on the platform delivered to their home for free.

Users can purchase its products and services through the Hims & Hers Health app or website. The mobile app offers numerous resources to users including health and wellness content and community support. Many of the company's products are available for direct purchase, but users often pay subscription fees to access prescriptions that are fulfilled online through its partner network of licensed pharmacies.

As of early 2024, Hims & Hers Health reported that it had 1.7 million subscribers using its platform. That figure was up by 41% from the previous year. Many of its nonprescription products are also available for sale at retail locations across the country.

If you're interested in investing in Hims & Hers Health stock, you've come to the right place. Read on to learn how to buy shares in the company, if this stock may be a wise use of your investment capital, whether the stock is profitable, if it pays a dividend, how to invest in the stock through an exchange-traded fund (ETF), and whether the company will split its stock.

How to invest

How to buy Hims & Hers Health stock

Because Hims & Hers Health stock is publicly traded, you can easily buy whole or fractional shares through your brokerage account. If you don't currently have a brokerage account, you can open one in minutes.

Step 1: Open a brokerage account

There are multiple factors that may determine the brokerage account you choose. You may want to consider fees charged for withdrawals and deposits, brokerage reputation, and investment options available.

Your personal investment goals and the overall objectives you've set for your portfolio may also influence the brokerage you pick. Some well-known brokerage options include Robinhood (HOOD 0.53%), Charles Schwab (SCHW 0.18%), and Fidelity.

Step 2: Figure out your budget

Once you've logged into your brokerage account or opened an account with the brokerage of your choice, you'll need to determine how much money you want to invest in Hims & Hers Health stock. The best way to succeed as a long-term investor is to diversify your investment capital in a wide range of quality stocks -- preferably at least 25 stocks in various industries. You should also consistently put cash into your portfolio amid both market highs and lows rather than trying to time the market.

As a long-term investor, consider any stock you buy with the context of a minimum buy-and-hold horizon of three to five years. You shouldn't be investing cash that you need for rent, bills, or any other near-term financial obligations. Every investor has a different approach to buying stocks. Some may choose to allocate money every month to their portfolio.

Dollar-cost averaging, or the process of investing a fixed amount in stocks on a regular basis, can also be a great approach for both beginner and experienced investors looking to build their portfolios. Once you've determined how much cash you want to put to start a position in Hims & Hers Health, there are still a few steps left to fulfill before you hit the buy button.

Step 3: Do your research

It's very important to research any stock you buy before you proceed. You need to understand the underlying business, how it works, and whether that company aligns with the investment objects and risk tolerance level you've identified that you want your portfolio to represent.

You should review the company's financials, consider its history of profitability or whether it is on a realistic path to profitability, and assess whether the business fits in with your personal investment thesis. Some investors prefer to focus on value stocks and blue chip stocks, while others veer towards growth stocks. Ideally, your portfolio will represent a wide range of investments that have excellent underlying businesses that you feel confident holding onto for the long term so you can compound your returns with time.

The company's economic moat and competitive advantages should also factor into the picture. A company with a durable growth runway ahead and a compelling product or service that stands out from the competition will likely stand the test of time in your portfolio. You should evaluate why you want to buy the stock, and the factors that might make you decide to sell your position in the future.

Step 4: Place an order

If you are ready to place the order and know your budget, you should log into your brokerage account and search for the ticker symbol HIMS. There are two types of orders you can place when buying Hims & Hers stock or any other stock -- market orders and limit orders.

A market order means your order is completed at the current stock price. With a limit order, you can determine the maximum price you're willing to pay, in which case the order will only execute if the stock hits within that limited price. Limit orders can remain in place for a specific period of time, until the transaction completes, or until you cancel the order.

The screenshot below shows how to buy shares of Hims & Hers Health stock on the brokerage platform Robinhood (HOOD 0.53%).

Should I invest?

Should I invest in Hims & Hers Health?

Whether you should invest in Hims & Hers Health stock will depend on your investment style and preferences. There are numerous reasons investors might want to scoop up at least a few shares.

Hims & Hers Health supports both sides of the patient-provider relationship, including digital prescriptions and consultations for patients, as well as electronic medical records systems and cloud-driven pharmacy fulfillment. Hims & Hers Health has recently begun expanding its reach in the anti-obesity drug marketplace, a space that analysts estimate could reach a valuation of more than $100 billion before the end of the decade.

In May 2024, the company announced that it would be offering users access to injectable Glucagon-like peptide-1 (GLP-1) weight loss drugs, with monthly prices starting at $199. Hims & Hers Health's expansion into the weight loss market is just one slice of the pie.

Its focus on key areas of the virtual healthcare space means the business faces a broad total addressable market where there is definitely room for multiple successful players. For example, management estimates that demand for quality telehealth solutions for sexual health affects 80 million individuals in the U.S. Mental healthcare services, another key specialty market and area of focus for Hims & Hers, represents approximately 100 million lives.

From skincare to birth control to wellness supplements, Hims & Hers offers a wide selection of generic and personalized treatment options that keep users coming back for more. Subscribers grew 48% year over year in 2023. Management believes that each of its key specialties, which include mental health, weight loss, and mental health, will deliver $100 million in revenue for the business by the year 2025. Hims & Hers is also targeting to deliver $100 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) by 2025.

Hims & Hers generated revenue of $872 million in 2023, a 65% increase from 2022. It also delivered an operating cash flow of $73.5 million, while free cash flow for the 12-month period totaled $47 million. Those cash flow figures were compared to negative metrics in 2022.

Profitability

Is Hims & Hers Health profitable?

Yes, Hims & Hers Health stock is profitable. The company recently reported its first profitable quarter at the end of 2023, bringing in $1.2 million in net income. In the first quarter of 2024, its second consecutive quarter of profitability, Hims & Hers Health delivered a net income of $11.1 million. Management is targeting 2024 to be its first full year of net income profitability.

Dividends

Does Hims & Hers Health pay a dividend?

Hims & Hers Health stock does not pay a dividend and has not announced its intention to start one in the future. Given that the company is investing heavily in its growth at this point in time and is a relatively new business, it seems unlikely that a dividend will factor into the picture anytime soon.

ETFs

ETFs with exposure to Hims & Hers Health

If you don’t want to buy individual shares of Hims & Hers Health, you can invest in an ETF to gain exposure to the stock along with a variety of other publicly traded companies. There are numerous ETFs that offer exposure to Hims & Hers Health.

Some notable mentions include the Vanguard Total Stock Market Index Fund (VTSAX 0.18%), the Vanguard Small-Cap Index Fund (VSMAX 0.5%), the iShares Russell 2000 ETF (IWM 0.41%), the Vanguard Extended Market Index Fund (VEXAX 0.72%), and the American Century Small Cap Growth Fund (ANOIX 0.92%).

Stock splits

Will Hims & Hers Health stock split?

Hims & Hers Health stock went public in January 2021 via a $1.6 billion special purpose acquisition company (SPAC). The company has not split its stock.

Usually, a company will split its stock when shares become too high or too low, or outpace those of similar companies in the industry, making an investment less accessible to wide groups of investors. Shares of Hims & Hers Health trade around $20, so a stock split seems highly unlikely at any point in the near future.

Related investing topics

The bottom line on Hims & Hers Health

Hims & Hers is growing steadily. Revenue and subscribers are consistently on the upswing. Profitability is improving. Its diverse potential audience could prime the company to snag shares in multiple lucrative segments of the telemedicine market.

Users can consult physicians across a range of specialties on demand, and get their prescriptions filled online and delivered to their house with ease. Hims & Hers Health's predictable revenue model is based on a combination of subscriptions, as well as individual sales for products and services.

Like many other telehealth-centric businesses, Hims & Hers enjoys the benefit of an asset-light business model that lends itself to healthy overall margins. The company reported an excellent gross margin of 82% in 2023, which was a 440-basis-point increase from the previous year.

The telehealth market is a competitive space, but consumers tend to spend on healthcare in a wide range of economic cycles, just as they do consumer staples. That lends a certain level of resilience to companies operating in this space. Hims & Hers Health is a growth-oriented stock, so it might not be an ideal choice for value-oriented or dividend-seeking investors. However, for investors with an ample buy-and-hold horizon who want a stake in a profitable telehealth business with a steady growth runway ahead, Hims & Hers Health stock may be a solid addition to a long-term investment portfolio.

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