In a significant departure from the traditional healthcare model, Hims & Hers has emerged as a key player in the U.S. telehealth market, showing remarkable growth and a promising outlook. This online platform, which has carved a niche by offering affordable medications directly to consumers, is projected to generate $6.5 billion in revenue by 2030. Its ascent, particularly since a tumultuous start to 2025, has seen its stock rise substantially, gaining 118% year-to-date and an astonishing 446% over the past five years.
Founded with an original focus on sexual health, Hims & Hers has broadened its reach into various healthcare sectors, including dermatology, mental health, hair loss, and most recently, weight loss. The company operates two distinct platforms: Hims caters to men, while Hers focuses on women, optimizing its offerings to meet diverse health needs. By bypassing the complicated insurance landscape that often discourages customers, Hims & Hers has effectively tapped into a growing demand for straightforward, accessible healthcare solutions.
A cornerstone of Hims & Hers’ strategy has been to provide affordable products that consumers can access without insurance hassles. Many individuals in the U.S. express dissatisfaction with their insurance providers, often preferring to pay out of pocket for medications that may not even be covered. This innovative approach has positioned the company on a trajectory toward achieving anticipated revenues of approximately $2 billion by 2025, largely driven by its weight loss medications. Historically, the popularity of weight loss drugs like Novo Nordisk’s Wegovy has created market shortages, providing avenues for compounding pharmacies to sell similar formulations at competitive prices. In 2024, this strategy accounted for approximately $200 million of Hims & Hers’ total revenue of $1.4 billion.
Following the easing of Wegovy shortages, Hims & Hers has made a strategic pivot by announcing a partnership with Novo Nordisk, enabling it to sell Wegovy directly on its marketplace. Although not an exclusive supplier, this partnership is expected to leverage Hims & Hers’ robust marketing capabilities and subscription business model to drive sales in the burgeoning obesity treatment sector.
In its quest to solidify its market position, Hims & Hers has also made strides to expand beyond the U.S. Recently, the company revealed plans to acquire European telehealth platform Zava, which boasts 1.3 million active customers in the U.K., Germany, France, and Ireland. This acquisition aligns with Hims & Hers’ vision to enhance its telehealth services in Europe, potentially accelerating its growth trajectory. Combining its extensive medication offerings with Zava’s established customer base and marketing prowess could create a formidable presence in the European market.
Long-term goals for Hims & Hers extend beyond simply increasing sales figures. The company envisions a future where healthcare becomes more personalized and user-friendly. This initiative includes developing unique drug combinations, establishing an in-house outsourcing facility, and offering at-home testing options. While specific details are scarce, the overall intention is clear: Hims & Hers aims to revolutionize healthcare interactions by making them more appealing and accessible, a strategy that has already attracted 2.4 million active users to its platforms.
Evaluating the potential for investment in Hims & Hers reveals a promising landscape. A revenue goal of $6.5 billion by 2030 appears plausible given the vast pool of prospective users in the U.S. alone, alongside the anticipated growth from the Zava acquisition. The company’s gross profit margin stands impressively at 77%, suggesting that as it scales operations, profitability could follow suit, potentially yielding a net profit margin exceeding 20%. This could translate into around $1.5 billion in net profits and free cash flow, based on projected revenues.
Currently, Hims & Hers allocates approximately 40% of its revenue to marketing. However, this figure has trended downwards over time and is expected to decline further as the company expands. Despite the promising financial outlook, it’s important to bear in mind past controversies regarding its legal adherence, particularly surrounding the sale of weight loss drugs when the legality was uncertain. The recent partnership with Novo Nordisk appears to have addressed some of these issues, but the company must tread carefully to maintain its reputation as a trustworthy pharmacy provider.
Market analysts generally view Hims & Hers as an attractive growth stock, particularly with its recent expansion of addressable markets via the Zava acquisition. With a current market capitalization of $12.3 billion, the company is positioned at approximately eight times the projected earnings for 2030, suggesting potential undervaluation given its growth prospects. Investors considering the stock may find reassurance in its long-term potential, despite the intrinsic risks associated with its rapid expansion and regulatory landscape.
In summary, Hims & Hers represents a compelling case study in the ongoing transformation of the healthcare sector, particularly in how it impacts consumer behavior and business models. With its innovative approach to bypassing traditional insurance mechanisms, expanding into telehealth services worldwide, and a growing appetite for personalized medicine, Hims & Hers appears well-positioned not only to sustain its growth but also to reshape the future of healthcare delivery in an increasingly digital age. As the company continues to evolve, both its success and the lessons gleaned from its journey will be closely watched by investors and industry stakeholders alike.