Capitalize on the recent post-earnings dip to buy shares of Hims & Hers Health (HIMS) around $29.50, viewing this pullback as an attractive entry point for a long-term holding.

The company is experiencing rapid scaling driven by strong subscriber growth and expanding high-margin specialties like testosterone replacement therapy.

Look for an upcoming catalyst this fall with the launch of new peptide offerings supported by their newly acquired U.S. manufacturing facility.

The business model benefits from a cash-pay system that bypasses insurance hurdles and leverages artificial intelligence for personalized healthcare treatments across its 3 million subscribers.

Investors should overlook short-term gross margin compression and GAAP net losses, recognizing them as strategic growth investments for this subscription-based healthcare platform.

Hims & Hers Health (HIMS)

• Strong Q2 results driven by robust subscriber and revenue growth, showing a year-over-year revenue increase of 38%.
• Added 300,000 subscribers this quarter, bringing the total subscriber base to nearly 3 million.
• Forward revenue growth guidance for 2026 remains strong at 32% to 41%.
• Expanding product offerings are scaling rapidly:
  • Weight loss (GLP-1s) and follow-up consultations providing significant revenue.
  • Testosterone replacement therapy (TRT) scaling quickly as the second fastest-growing specialty 11 months after launch.
  • Peptides (including BPC-157 and TB-500) anticipated to launch as soon as the fall, supported by their newly acquired CS Bio US-based manufacturing facility.
• Long-term strategic advantages include:
  • Integration of artificial intelligence (AI) and recommender systems utilizing their 3 million customer dataset to personalize treatments and improve recommendations.
  • A cash-pay model that bypasses traditional health insurance red tape, allowing for rapid scaling and predictable subscription-based revenue.
  • International expansion through small, strategic acquisitions like Eucalyptus.
• Wall Street concerns and risk factors noted:
  • Short-term dip in gross margins driven by promotional pricing on GLP-1s and initial investments.
  • Negative GAAP net loss of $86 million in the quarter (though adjusted EBITDA remains positive and management emphasizes marketing and AI spending as long-term investments rather than mere expenses).
  • Share price dropped roughly 7% to 8% in pre-market/after-hours trading following the earnings release, which the speaker viewed as a relatively mild reaction.

Takeaways

• Consider Hims & Hers Health (HIMS) as a long-term investment horizon (10-year hold) due to its subscription-based business model, expanding specialty segments (TRT and upcoming peptides), and potential for AI-driven healthcare personalization.
• Market pullbacks—such as the post-earnings dip bringing the stock to around $29.50—may present a buying opportunity for long-term investors who look past short-term gross margin compression and GAAP accounting losses.