Hims & Hers: Shortage Saga Brings Stupendous Risk-Reward

(8min)

Summary

  • Hims & Hers stock is undervalued at 25x forward free cash flow, presenting a tremendous bargain given its strong fundamentals and growth potential.
  • Despite volatility and marketing spend concerns, Hims & Hers boasts over 2 million paying subscribers, with significant growth expected organically, not just from GLP1 products.
  • With no debt and over $230 million in cash, Hims & Hers is financially robust and profitable, projecting $220 million EBITDA and $170 million free cash flow in 2025.
  • Anticipating a 35% CAGR in 2025, Hims & Hers is poised for substantial growth, making it an enticing investment opportunity headed for $30 by summer 2025.
  • Looking for a helping hand in the market? Members of Deep Value Returns get exclusive ideas and guidance to navigate any climate. Learn More »

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Investment Thesis

I make the case that investors are not paying up for any GLP1 prospects, or even, for that matter, the actual core business that Hims & Hers (NYSE:HIMS) operates in.

I argue that

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This article was written by

Michael Wiggins De Oliveira is an inflection investor. This means buying into cheap companies at the moment when their narrative is changing and the business is on a path toward becoming significantly more profitable over the next year.

With a focus on tech and “the Great Energy Transition (including uranium)”, Michael runs a concentrated portfolio with approximately 15 to 20 stocks and an average holding period of 18 months.

Through his 10+ years analyzing countless companies, Michael has accumulated outstanding professional experience in tech and energy and a following of over 40K on Seeking Alpha.

Michael is the leader of the investing group

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Seeking FCF is an associate of Michael Wiggins De Oliveira

Analyst’s Disclosure: I/we have a beneficial long position in the shares of HIMS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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