Consider buying Hims & Hers Health (HIMS), as it is seen as significantly undervalued with a disruptive "Netflix of healthcare" subscription model. The company's core business bundles doctor consultations and medication into a single cash-pay service, bypassing the complex insurance system. While the market focuses on intense GLP-1 competition, this is a misunderstanding of the broader business, and the competitive threat from Amazon is considered low due to different operating models. HIMS has a history of beating its own growth guidance, suggesting its long-term targets may be conservative. Watch for future growth catalysts from the company's expansion into emerging fields like peptides.

Hims & Hers Health, Inc. (HIMS)

• The speaker presents a very bullish case for HIMS, arguing that the market misunderstands the company's fundamental value and long-term vision, leading to a cheap valuation. The stock price was mentioned as being around $30.
• Valuation: The speaker believes the stock is "dirt cheap".
  • Based on full-year 2025 guidance ($2.34B revenue, $312M EBITDA), the stock trades at 2.9x trailing revenue and 22x adjusted EBITDA.
  • The speaker argues this valuation is what you would expect from a company with no growth, despite HIMS being a high-growth company.
• Growth & Guidance:
  • The company has provided long-term guidance for $6.5 billion in revenue by full-year 2030, which represents a compound annual growth rate (CAGR) of nearly 23%.
  • The speaker highlights that HIMS has a history of "low-balling" its guidance and achieving targets much earlier than projected. It is suggested that the 2030 revenue target could potentially be reached as early as 2028, which would imply a much higher growth rate of 35-40%.
• Business Model:
  • The speaker describes HIMS as the "Netflix of healthcare," a disruptor turning traditional "sick care" into a subscription-based healthcare model.
  • It is a vertically integrated platform that combines the doctor visit and the medication into a single, cash-pay bundle.
  • By not accepting insurance, HIMS can innovate faster, offer transparent pricing, and allow its doctors to work for the patient, not the insurance company.
• Debunking Common Fears (FUD): The speaker addresses and refutes five common bearish arguments against the stock.
  • 1. Growth Will Stall: This fear is mostly tied to intense competition in GLP-1 weight loss drugs. The speaker argues HIMS is more than just GLP-1s, also offering other weight loss products (like Metformin) and that its strong brand recognition will make it a preferred choice for consumers.
  • 2. Excessive Marketing Spend: The argument that HIMS spends too much on marketing is dismissed. The speaker reframes it as a crucial investment in customer acquisition with a high lifetime value, similar to how Amazon and Netflix built their businesses. This spending has resulted in massive brand recognition.
  • 3. Insider Selling: The speaker calls this "noise" and "engagement farming" on social media. It's argued that insiders sell for many reasons (taxes, expenses, diversification) and that selling is not a reliable negative signal. A buy is the only true signal.
  • 4. Amazon Will Kill Them: This is called a "fundamental misunderstanding" of the business. Amazon is disrupting traditional pharmacies, which are tangled with the insurance system. HIMS operates in a "blue ocean" by bundling the doctor and drug in a direct-to-consumer, cash-pay model that Amazon is not currently replicating.
  • 5. High Employee Turnover: The speaker attributes turnover to the vibrant San Francisco job market and normal business dynamics, stating it is not a signal of internal company problems.

Takeaways

• The speaker believes HIMS is significantly undervalued relative to its current profitability and massive growth potential. The current market focus on GLP-1 competition is seen as short-sighted, ignoring the company's broader disruptive vision.
• The core investment thesis is a long-term one: HIMS is fundamentally changing the healthcare experience by offering a transparent, subscription-based service that bypasses the complexities and misaligned incentives of the traditional insurance-based system.
• Investors should view the company's high marketing spend as a strategic investment in building a durable brand, which acts as a competitive advantage.
• Potential future growth drivers to watch are the company's expansion into new categories like longevity and peptides.

Investment Theme: GLP-1s & Peptides

• GLP-1s: These popular weight-loss drugs (like Ozempic and Wegovy) are a major topic of conversation. The speaker acknowledges that competition is "absolutely intense."
  • However, the argument is that HIMS's well-known brand will help it stand out in a crowded market.
  • It's also emphasized that GLP-1s are only one part of HIMS's business, which is projected to be a maximum of 25% of revenue next year. HIMS also sells other weight-loss medications like Metformin and Liraglutide.
• Peptides: This is highlighted as a potential "revolution in healthcare" and a major future growth area for HIMS.
  • Peptides are strands of amino acids that can be difficult to patent because they exist in nature. GLP-1s are a type of peptide that drug companies modified slightly to make them patentable.
  • The speaker suggests HIMS is at the "forefront" of this emerging field, which could be a significant long-term catalyst.

Takeaways

• According to the podcast, investors should not view HIMS as a simple GLP-1 play. The company's success is not solely dependent on winning this specific market.
• The emerging field of peptides represents a significant, "blue ocean" growth opportunity that the market may not be pricing into the stock. This could be a key area for future innovation and revenue growth for HIMS.

Amazon (AMZN)

• Amazon is mentioned as a commonly cited threat, with bears arguing that Amazon Pharmacy will "kill" HIMS.
• The speaker strongly refutes this, stating that the two companies have fundamentally different business models.
  • Amazon Pharmacy operates more like a traditional pharmacy (e.g., CVS), filling prescriptions from outside doctors and dealing with the complexities of health insurance reimbursement.
  • HIMS is an integrated platform that provides both the doctor consultation and the medication in one seamless, cash-pay subscription. You cannot bring an outside prescription to HIMS.

Takeaways

• The speaker believes the competitive threat from Amazon is low because they are not direct competitors.
• HIMS's business model is designed to avoid the insurance system, which is a major source of friction and slow innovation that Amazon Pharmacy will have to contend with. This gives HIMS an advantage in speed and agility.