Investors should consider Hims & Hers Health (HIMS) as a primary disruptor in the telehealth space following its early acquisition of Eucalyptus, which expands its global footprint and pushes total subscribers past 3 million. Analysts expect a significant upward revision to long-term revenue targets during the Q2 earnings report, with 2026 sales potentially reaching $3.16 billion due to this international expansion. The stock is currently viewed as undervalued with an EV/Gross Profit/Growth metric of 0.1, offering a high-conviction entry point while the market lags behind these fundamental developments. Beyond core treatments, HIMS remains a leader in the high-growth GLP-1 weight loss market, successfully navigating previous legal concerns to maintain its competitive edge against peers like LifeMD (LFMD). For a diversified play on the digital healthcare shift, focus on "full-stack" providers like HIMS that control the entire patient experience from the mobile app to pharmacy fulfillment.

Hims & Hers Health, Inc. (HIMS)

• Strategic Acquisition: The company has officially closed its acquisition of Eucalyptus, an Australian-based healthcare technology company, significantly ahead of schedule.
  • The deal closed in early June, despite management previously signaling a "second half of the year" timeline.
  • This acquisition expands Hims' footprint to four continents, adding presence in Australia, Japan, Canada, and Germany.
• Subscriber Growth: The Eucalyptus deal brings access to data from approximately 850,000 people served on their platform.
  • Total recurring monthly subscribers for the combined entity are estimated to exceed 3 million.
  • Users typically pay between $50 to $100 per month for various treatments and prescriptions.
• Financial Guidance & "Sandbagging": The analyst believes management is "sandbagging" (intentionally providing low estimates) their long-term targets.
  • Current long-term revenue targets sit at $6.5 billion, but the analyst expects this to be updated upward, potentially as early as the Q2 earnings report.
  • 2026 revenue projections (excluding Eucalyptus) had a midpoint of $2.9 billion. Adding Eucalyptus' estimated revenue contribution could push 2026 sales to approximately $3.16 billion.
• Market Sentiment: Despite the early execution and positive news, the stock has seen a slight sell-off (down ~1%).
  • The analyst attributes this to a "lag" between good fundamental news and price action, noting that the market currently rewards "hype" over "execution."
  • Comparison was made to the February sell-off regarding GLP-1/Eli Lilly partnerships, where it took months for the market to correctly price in the positive developments.

Takeaways

• Bullish Growth Outlook: The analyst projects a 35% revenue growth rate for 2026, countering previous market fears that growth would flatten.
• Valuation Metrics: The stock is described as "dirt cheap" based on specific metrics:
  • EV/Gross Profit/Revenue Growth: Cited at 0.1, which is considered very low.
  • Rule of 40: The company scores a 49, indicating a healthy balance of high growth and profitability.
• Sector Disruption: Hims is positioned as a primary disruptor to traditional insurance and "brick-and-mortar" doctor offices. The analyst views the Hims App as the "future of healthcare," similar to how Netflix disrupted traditional media.
• AI Potential: While not currently marketed as an "AI stock," the analyst argues Hims is fundamentally an AI play due to its "proprietary closed-loop data" from 3 million users, which allows them to track medication outcomes and optimize treatments.

Telehealth & Direct-to-Consumer (DTC) Healthcare Sector

• The analyst identifies a major shift away from traditional healthcare infrastructure (local pharmacies and doctor offices) toward digital platforms.
• Key Competitors Mentioned:
  • Ro (Private)
  • LifeMD (LFMD)
• The sector is characterized by transparent pricing, AI integration, and a lack of reliance on traditional insurance models.

Takeaways

• Market Leadership: Hims (HIMS) is expected to remain the #1 player in the telehealth/pharmacy space, though there is "room for competition" from peers like LifeMD.
• Investment Theme: Look for companies that control the "full stack"—from the patient interface (app) to the pharmacy fulfillment and data collection.

Weight Loss & GLP-1 Medications

• The transcript briefly touches on the "FUD" (Fear, Uncertainty, Doubt) surrounding Hims' involvement in the GLP-1 (weight loss drug) space.
• The analyst reaffirms that Hims is successfully selling products related to Novo Nordisk and Eli Lilly, and that previous legal concerns (lawsuits) have been dropped.

Takeaways

• Revenue Driver: GLP-1 medications remain a significant growth lever for the company, despite skepticism from some market participants five months ago.