Hims & Hers, a growing player in the telehealth sector, is significantly expanding beyond its initial focus on stigmatized conditions to encompass a broader range of proactive health management services. This shift includes offerings in diagnostics, weight-loss support, and hormone health, catering to a growing demand for comprehensive consumer health solutions.
The company reported a remarkable Q3 revenue of $600 million, marking a 49% increase year-over-year, and has set ambitious growth targets, aiming for a staggering $6.5 billion in revenue by 2030. The subscriber base for its personalized solutions has also seen impressive growth, increasing by 50% year-over-year. Notably, the Hers brand is projected to hit $1 billion in annual revenue by 2026, while weight-loss services are expected to generate $725 million this year alone.
Hims & Hers has expanded its reach to 200 million adults across five European countries following its acquisition of Zava. This international growth is set to continue, with planned expansions into Canada and potential access to generic semaglutide by 2026. Investors see a promising future as the stock currently trades at $32, providing an attractive opportunity given the company’s expansion potential and the projected price target of $52 by December 2027, which suggests a total return of 65%.
The company is in the midst of a strategic transition from focusing on acute-condition treatments to proactive health management. This evolution is aimed at sustaining high growth and improving profitability across its operations. The forecast for Hims & Hers anticipates an annual revenue growth rate of 30.5% and an operating margin of 6.1%. The company’s premium stock valuation reflects its strong growth trajectory and expansive market opportunities in direct-to-consumer healthcare.
Key growth areas include weight-loss products, with price reductions to enhance accessibility, and new specialty offerings in testosterone and menopause health—an area where only 30% of OB/GYN programs offer formal training. Hims & Hers is also set to further enhance its operations by expanding its facility space from 400,000 square feet to over 1 million square feet by the end of 2025, which is expected to improve efficiency and profitability.
While telehealth platforms face inherent regulatory risks and execution challenges, the varied potential scenarios for Hims & Hers stock suggest robust growth potential. In a base case scenario, with continued 30.5% growth and stable margins, the company expects a 19% annual return. Alternatively, a strong execution could yield returns as high as 28% annually.
This forward-looking approach positions Hims & Hers as a beacon of innovation in the health management space, paving the way for enhanced accessibility to personalized care while promising substantial returns for investors who capitalize on its ambitious growth strategy.