HIMS & HERS SMASHES Q3 EARNINGS

Summary

In this video, the creator breaks down the impressive Q3 earnings of Hims & Hers, praising their outstanding performance with a 77% year-over-year revenue growth and 54% EPS beat. Despite concerns about marketing costs, the company’s ability to scale and improve profitability is clear. The video also compares Hims & Hers' growth to its competitors, emphasizing its undervaluation. The creator expresses confidence in the company’s potential for even further growth, predicting it could become a 10-bagger stock over the next five years. The video concludes with an endorsement for those holding shares and highlights an attractive promotion for free stock shares.

Takeaways

• 😀 Strong Q3 2024 earnings for Hims & Hers, with a 77% YoY revenue growth, surpassing expectations by $18 million.
• 😀 The company’s EPS of $0.32 beat expectations by 54%, reflecting strong profitability.
• 😀 Hims & Hers saw a 44% YoY growth in subscribers, reaching 2 million total subscribers.
• 😀 EBITDA jumped from $12 million to $51 million, showing excellent scalability and operational efficiency.
• 😀 Free cash flow increased significantly from $19 million to $79 million, reinforcing financial health.
• 😀 Marketing spend of $66 million drove a revenue increase of $175 million, showing a positive ROI.
• 😀 Stock buyback program saw $30 million repurchased, with $70 million remaining, signaling confidence in the company’s stock price.
• 😀 Despite concerns, marketing expenses as a percentage of revenue are decreasing as the company scales.
• 😀 The company raised Q4 guidance, projecting revenue between $421 million and $467 million, reflecting strong growth expectations.
• 😀 Hims & Hers is seen as undervalued compared to its growth potential, with a forward P/E ratio of 48x despite strong profitability and rapid growth.
• 😀 The presenter believes Hims & Hers could be a 10-bagger stock over the next five years, highlighting its strong growth trajectory and undervaluation.

Q & A

What was the EPS for Hims & Hers in Q3, and how did it compare to analyst expectations?

The EPS for Hims & Hers in Q3 was $0.32, which was a 54% beat compared to the expected EPS of $0.27.

What was the revenue growth for Hims & Hers in Q3, and how did it compare to estimates?

Hims & Hers reported a 77% year-over-year revenue growth, beating estimates by $18 million.

What does the speaker think about the company’s stock price performance relative to its earnings?

The speaker believes the stock should have risen more in response to the strong earnings but thinks it remains undervalued given the company’s strong growth and profitability.

What is the significance of the 77% revenue growth for Hims & Hers, according to the speaker?

The speaker finds the 77% revenue growth particularly impressive because it shows the company’s growth is accelerating, not slowing down, despite earlier predictions of a slowdown to 20% or 30%.

How did the Q4 revenue guidance change, and why is it important?

The Q4 revenue guidance was increased to $467 million, a 30% higher hike than previous estimates. This is important as it reflects the company’s confidence in continuing its strong performance.

What is the speaker’s perspective on Hims & Hers’ marketing spending?

The speaker defends the marketing spend, arguing that it is essential for customer acquisition. While the absolute dollar amount spent on marketing increased, the revenue generated from it was much higher, showing that the investment is paying off.

How did subscriber growth perform for Hims & Hers, and what was the key takeaway from this?

Hims & Hers added 2 million new subscribers, a 44% year-over-year growth. The key takeaway is that the company is growing its customer base significantly, which will support continued revenue growth.

What is the importance of the company’s cash flow and share buybacks?

Hims & Hers showed a strong increase in free cash flow from $19 million to $79 million. Additionally, the company repurchased $30 million of stock, signaling confidence in its future prospects and providing value to shareholders.

What did the speaker think about the valuation of Hims & Hers compared to its peers?

The speaker believes Hims & Hers is undervalued, with a forward PE ratio of 48x, especially given its growth rate. They compared it to another company, Palantir, which has a much lower growth rate but is valued at nearly three times the PE ratio of Hims & Hers.

What future growth potential does the speaker see for Hims & Hers?

The speaker sees strong growth potential for Hims & Hers and believes it could become a '10-bagger' (10x return) over the next five years, driven by continued growth in profitability, subscriber numbers, and efficiency.