3D·

🚨 Hims & Hers - turnaround opportunity or too hot to handle? 🔍

I am currently following the developments around $HIMS (-0.08%) and am torn between the two. The share price recently fell by over -28% after Novo Nordisk terminated the cooperation - partly due to allegations regarding the marketing of unapproved Wegovy generics.

💡 Facts on the table:

Share price currently around € 40
P/E ratio > 60, valuation sporty
Business model remains exciting (telehealth / D2C for health & wellness)
Long-term market potential, but short-term regulatory risks
I am considering building up an initial position with 2-3% of the portfolio at around € 35-40

❓What do you think:

Is HIMS a turnaround opportunity for you as soon as the situation calms down?
Or would you prefer to keep an eye on it and possibly bet on established players like Novo Nordisk?
How are you currently handling the issue of "small growth stocks with uncertainties"?

I would be delighted to hear your assessments and strategies

Cheers & good investing! 🚀

17 Comments

Lupo201@Lupo201

$HIMS is definitely a turnaround opportunity! Things can go uphill very quickly here. Hims is so strongly positioned in various areas and far ahead of other telemedicine companies.

Why bet on Novo Nordisk, which has problems with corporate management and already has a high market capitalization? In addition, the competition $LLY is strongly positioned and is taking market share.

For me personally, Hims is a "once in a lifetime opportunity".

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Augustin G Laios@Auge

Hey, thanks for the strong assessment!
@Lupo201 How would you currently go about it?
- At what price would you get in now or add to the portfolio?
- And what percentage of the portfolio would you give HIMS in your strategy?

I'd be super interested - I'm currently in the process of figuring out exactly that

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Lupo201@Lupo201

@Auge Of course, you have to decide for yourself what price is worth entering the market at. You can take the approach of opening a small position and buying more when the price falls.
However, the probability that we will see such low prices in a few months' time is decreasing.

You can also decide for yourself what percentage of your total portfolio HIMS should make up. What loss could you cope with and how convinced are you of the company?

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caliventures@caliventures

I'm balls deep in it 🐂

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Shem_sen@Shem_sen

@caliventures me too🤣🤣🤣🤣

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Pazzzi@Pazzzi

I would like to briefly address your assessment of the P/E ratio >60. It is clear that this sounds "sporty" in the first month, but it is not. You have to look at this figure in relation to the forecast earnings growth. This is forecast at $HIMS at +89% (by the company itself (but by a weak key figure Adj. EBITDA)).
This can be put into relation using the PEG ratio: P/E ratio(60)/earnings growth(89)=yields0.67. If daS PEG ratio is <1, this may indicate an undervaluation. Of course, these forecasts must also be met and the future prospects must prove themselves.

I have been invested in $HIMS for a long time and still see great potential 🚀 However, it should be noted that this share is extremely volatile and can be very nerve-wracking.

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SemiGrowth@SemiGrowth

@Pazzzi Firstly, the P/E ratio is not 60, but actually over 70. Secondly, earnings growth of 35-40% is forecast for the next few years. Makes your PEG almost 2, which indicates overvaluation. Even if they grow 40%pa for 3 years, the P/E ratio is still >30 after that. At the moment you are also diluted with a good 5%pa, so you still have to deduct that. Margins are also no longer rising and no margin expansion is forecast.
You only grow through sales

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Pazzzi@Pazzzi

@SemiGrowth The P/E ratio of 70 is correct. I have calculated the profit and sales growth until 2030 according to the internal targets -> please see my profile in the last post. It is true that the longer-term growth is ~40% p.a. I see the P/E ratio differently than you do. Please correct me if I have made a mistake. 👍

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SemiGrowth@SemiGrowth

@Pazzzi My figures are the average analyst forecasts. I don't know what you can see differently with the P/E ratio, it's an objective figure. And also objectively there has been no margin expansion for a year, rather a reduction. Do you really believe that telemedicine has high margins? There's probably nothing to be gained. Longer-term growth is below 40% (approx. 37%). The thing is far too expensive for growth, especially with the margin. You just buy a lot of story, as with $TSLA

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Pazzzi@Pazzzi

@SemiGrowth Yes, you can see it that way. I realize that the net margin is very low. Of course, there is also a lot of fantasy involved. But $HIMS is currently growing and has to invest heavily to gain market share. That is why the company spends around 50% of its turnover on advertising. If the market should saturate at some point, $HIMS can develop into a cash cow, reduce growth expenditure and thus increase its margin. This may justify the valuation.

What has emerged from our conversation is that the P/E valuation is actually relatively poor as an investment basis.

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SemiGrowth@SemiGrowth

@Pazzzi I took another quick look at the figures. The gross margin is indeed diabolical at 72%. However, it used to be 82%. But yes, the margins still seem to be relatively high. They spend more on marketing than on production costs, which is, let's say, special

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Chris@Multibagger

Either I get them for around €30 or they don't find their way back into my portfolio. I think there are more interesting growth stocks with fewer regulatory risks and a high valuation. But some people here see it differently, which is not a bad thing.

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Alexxela@Alexxela

@Multibagger Which ones?

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Olli@Olli68

I'm also torn at the moment. But I'm thinking more of an exit. I'm currently concerned about the risk of an FDA investigation and possible legal action. That's why I'm not buying any more for the time being, but rather looking to get out.

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Shell@Shell

@Olli68 same for me. Risk of FDA stepping in and banning compounded drugs (not only glp-1 but all of them with glp-1 as a precedent) is getting bigger now. That would kill the whole businessmodel of hims which is all-in on compounded drugs and the judicial loophole that there is (‘personalised drugs’) until this moment

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Bubu@Bubu_98

If you are not invested, simply add a small trial position to your portfolio. Then you will see whether you can withstand the volatility.

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Chris@Multibagger

@Bubu_98 the vola would not be a problem for me, 80% of my derivatives have a much higher vola. 20-40% is not a problem, but why should I buy now if I think it will test the last lows again.

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