Hims & Hers Stock Crashes -25%

Summary

The video analyzes a recent 25% drop in the stock of Hims & Hers, explaining the reasons behind the crash and offering a perspective on the company's future. The host discusses key factors like Amazon's entry into the telehealth space, insider trading activity, and the company's financials, which show strong year-over-year growth. Despite the drop, the host remains optimistic about the company's long-term prospects, highlighting its diverse product offerings and growth potential. The video also critiques analysts' erratic stock price predictions and reflects on the broader healthcare market's potential.

Takeaways

• 😀 Him and Hers stock crashed 25% due to Amazon's entry into the telehealth market, but it's still up 116% year-to-date.
• 😀 A 25% drop qualifies as a 'stock crash,' but the context is important, as Him and Hers is still showing strong growth in the market.
• 😀 Despite the drop, Him and Hers' earnings report was solid, showing a 77% year-over-year growth and a 48x earnings multiple.
• 😀 Insider stock purchases, like the 5,000 shares bought by a Him and Hers director, are helping to rally the stock slightly.
• 😀 Amazon is launching more affordable telehealth services, which directly compete with some of the products offered by Him and Hers, such as ED and hair loss treatments.
• 😀 The stock drop was initially believed to be related to GLP-1 drugs, but it was actually due to Amazon's competitive moves.
• 😀 The volatility in Him and Hers stock, with ups and downs, has attracted day traders who are taking advantage of the price fluctuations.
• 😀 Analysts are inconsistent with their stock recommendations, upgrading and downgrading the stock multiple times in a short period.
• 😀 Amazon's entry into the healthcare space is not new, and while they are offering competitive pricing, they have struggled in this sector before.
• 😀 Him and Hers has a more diverse product offering, with a broader selection of treatments, which sets it apart from Amazon's more limited telehealth options.
• 😀 Despite Amazon's entrance into the market, Him and Hers' growth potential remains strong, and the stock is still viewed as undervalued given its expansion across multiple healthcare categories.

Q & A

Why did Hims & Hers stock drop 25%?

The stock drop was primarily triggered by Amazon's announcement to launch low-cost telehealth services, including products similar to those offered by Hims & Hers, such as ED treatments and anti-aging skincare. This created concerns about increased competition.

What is the significance of the 25% drop in Hims & Hers stock?

A 25% drop in stock is classified as a crash, and in this case, it resulted in a loss of $1.5 billion in market capitalization. This significant drop prompted concerns about the future of the company, despite its strong year-to-date growth.

What factors contribute to Hims & Hers' stock volatility?

The stock has experienced volatility due to several factors, including market reactions to earnings reports, insider trading (buying and selling of shares), and significant news events like Amazon's entry into the telehealth space. Additionally, day traders have contributed to frequent price fluctuations.

How did Hims & Hers perform financially despite the stock drop?

Despite the 25% stock drop, Hims & Hers has demonstrated strong financial performance, with a 77% year-over-year growth and a 48 times earnings multiple. This indicates that the company has performed well in terms of revenue and earnings, suggesting that the stock's valuation remains relatively attractive.

What role did insider buying play in the stock's recovery?

Insider buying, such as the purchase of 5,000 shares by a director of Hims & Hers, helped to generate some optimism about the stock. Insiders tend to buy shares when they believe the stock price will rise, which can influence other investors to follow suit.

How has Amazon's entrance into the telehealth market affected Hims & Hers?

Amazon's entry into the telehealth market has heightened competition for Hims & Hers, as they now offer similar products at competitive prices. However, Hims & Hers still holds an advantage in offering a broader range of healthcare services and has an established market presence.

What makes Amazon's healthcare offering less competitive than Hims & Hers?

Amazon's telehealth services, while similar, do not offer the same level of convenience or speed as Hims & Hers. Both companies require telehealth appointments, and the delivery times are comparable. Additionally, the pricing structures of Amazon's services (including the requirement for an Amazon Prime membership) may negate any perceived cost advantages.

How does the pricing of Hims & Hers compare to Amazon's healthcare offerings?

The pricing for Hims & Hers services, such as $16/month for hair loss treatment or $19/month for ED treatment, is competitive with Amazon's prices. However, Amazon's customers also need to pay for an Amazon Prime membership and other additional costs, which can make Amazon's services less affordable than they seem at first glance.

Why does the speaker believe Amazon's threat to Hims & Hers is overplayed?

The speaker argues that while Amazon's entry into the market is a challenge, the threat is exaggerated. Hims & Hers offers a wider range of healthcare services and can develop and release new products more quickly than Amazon. Additionally, the speaker believes the stock drop was too severe considering the company's strong growth and valuation.

What is the speaker's outlook for Hims & Hers despite the recent stock drop?

The speaker remains optimistic about Hims & Hers, believing that the company's diversified offerings and strong growth prospects make it a solid investment. Despite the competition from Amazon, the speaker thinks that the stock's current valuation still presents a good buying opportunity.