HIMS: A 10x Opportunity?

$HIMS is one of the most popular stocks among retail investors. Some say it doesn’t have a moat, others call it the Amazon of healthcare. Who’s right?

HIMS is setting the foundation of what could become the next healthcare giant. While many people argue there is a lack of moat, Hims & Hers has shown that perfect execution isn’t something that can easily be replicated.

With over 2.4 million subscribers, an expanding business, important growth vectors, and a loyal subscriber base, Hims is taking on the retail healthcare market with a simple motto: high quality, customer satisfaction, and convenience.

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The Business

HIMS is a diversified telehealth company with its own online pharmacy. They offer a wide array of products, and their professionals treat a wide variety of conditions.
They’ve now expanded into four large markets:

• Sexual Health

• Dermatology

• Mental Health

• Weight Loss
  

Each and every one of these markets is massive, and Hims' position is already very dominant. In the direct-to-consumer digital health services for these markets, HIMS has a massive 47% market share.

You don’t get this market share by pure luck or with, as some say, a lack of moat.
High-quality products, great marketing, highly rated service delivered by professionals, and a convenient telehealth experience can’t be easily replicated. The numbers and dominance they're putting up prove it.

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While Hims is known for GLP-1, they’re much more than that.

The GLP-1 offering is simply a demonstration of the speed and excellence of Hims’ management. They were able to move quickly and capitalize on an opportunity that appeared out of nowhere, turning it into a cash cow. Thanks to the capital generated from this opportunity, Hims has now been able to invest in new high-growth segments that will continue driving long-term expansion.

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Part of that investment has been directed toward their own facilities.

Their total nationwide internal fulfillment footprint is approximately 700,000 square feet, including:

• Three compounding pharmacies in Ohio, California, and Arizona

• A peptide facility

• An at-home lab testing facility in New Jersey
  

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The power of Hims lies in being one of the first to offer this level of telehealthcare. Thanks to their strategic positioning, they have embedded themselves into the market both in terms of subscribers and brand recognition.

This current positioning and strong brand create a moat in itself.

The cash flows generated from this allow Hims to reinvest into compounding capacity, testing infrastructure, and stronger marketing.
This reinforces the moat and creates a positive feedback loop that results in a long-term, fast-growing compounder.

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Financials

This dominance and leadership are reflected in their financials.

Hims has achieved 38% year-over-year subscriber growth and 136% growth in personalized subscribers, reaching 2.4 million subscribers.

While this growth is already impressive, what makes it even better is that monthly online revenue per average subscriber has increased by 52% over the same period, driving total revenue growth to 111%.

This is not unprofitable revenue. Hims has been free cash flow positive for two years straight, and their operating cash flow reached 109 million dollars in the last quarter.

With strong fundamentals and a 323 million dollar cash balance, Hims has more than enough firepower to keep expanding.

For the full year 2025, they expect to generate 2.35 billion dollars in revenue and 315 million dollars in adjusted EBITDA.

Based on the current enterprise value, this would value the company at 5 times sales and 37 times EBITDA, which is far from steep considering the growth trajectory of this business.

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2030 Goal

Demonstrating their confidence in the business, Hims has provided guidance for 2030.

They expect revenue to reach at least 6.5 billion dollars, signaling a compound annual growth rate above 23 percent.

Adjusted EBITDA is expected to reach at least 1.3 billion dollars, signaling a CAGR above 33%.

This will be key for the later valuation

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Looking Forward: New Segments That Will Drive Growth

Hims is expanding into new areas, including testosterone, menopause, longevity, and preventative medicine.

Testosterone is a massive and fragmented market. Currently, there are small labs offering hormonal assistance, and in some cases, treatments are available through insurance if there's a severe condition.

But what if someone wants a more convenient, high-quality experience? That’s where Hims enters.

Through their existing subscriber base, Hims will be able to distribute these treatments with ease. Their brand and market leadership will attract customers directly.

Why deal with small clinics or jump through hoops with insurers when you can get personalized, digital attention from Hims?

If you’re wondering how testing works in this model, that’s where their new facility plays a crucial role:

Hims recently acquired a testing lab in New Jersey, which allows them to enter markets they previously couldn't.

Patients can now receive an at-home test kit, send in a sample, and get results from the Hims lab. Based on that, Hims can detect deficiencies in vitamins, minerals, hormones, and prescribe personalized supplements or medications, all handled internally.

This allows Hims to move further toward becoming a fully vertically integrated healthcare provider.

The same testing infrastructure also supports their menopause treatments and broader health optimization strategy.

They aim not just to treat illness, but to prevent it by enabling patients to monitor their health and optimize it.

Their peptide facility adds to this vision. Peptide research has seen a surge in interest, with numerous reported benefits. Consumers are eager to find out how peptides can support their well-being.

With their new facility in California, Hims can offer a broader array of solutions.
Given the brand’s reputation and scope, customers are unlikely to leave for other providers.

This isn’t just a “boner pill” provider anymore. It’s a fully integrated telehealth company with its own testing and manufacturing capacity.

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Weight Loss

GLP-1 was a cash cow for Hims, but due to the end of the shortage, they can no longer sell the same generic treatments as before. Now they can only offer the branded, expensive alternatives.

Currently, the only generic they offer is liraglutide, which is less effective than other injectables. Although they can still offer Semaglutide to existing patients, that’ll only last until Q2 of this year.

Despite this, Hims is still capitalizing on weight loss demand.

They offer popular oral solutions, including personalized formulas, which allow patients to avoid injectables altogether.
Subscriber growth from these oral offerings has grown by over 300% year-over-year in the first quarter of 2025.

They’ve also partnered with Novo Nordisk to offer a more affordable injectable solution.

Patients in the U.S. can now access NovoCare Pharmacy directly through Hims & Hers, bundled with a membership that includes 24/7 care, clinical support, and nutritional guidance, starting at 599 dollars per month.

The two companies are also developing a long-term plan that leverages Novo Nordisk’s innovations and Hims' ability to scale access to care, aiming to improve outcomes at a more affordable cost.

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International Expansion

Hims has also suggested that international expansion will accelerate as part of their growth strategy.

They’ve already expanded into the UK with positive results. This initial success gives them a playbook to enter other countries.

While no targets have been announced yet, Hims has the capital, team, and infrastructure to make meaningful investments abroad.

They also announced an 870 million dollar convertible notes offering to fund global expansion and the use of AI in healthcare.

This will give Hims nearly a billion dollars to invest in growth.

Of course, the risk is that if the capital is misallocated, they will carry unnecessary debt.

Still, given management’s track record, it makes sense to trust their decision to raise capital and seek high returns on invested capital.

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The Data Advantage

In late 2023, Hims launched MedMatch, an AI tool that uses millions of anonymized data points from their customer base and internal platform data.

With more than 2.4 million subscribers and an in-house lab, Hims will be able to build a vast dataset that can train and refine their AI models.

This capability is a quiet but significant catalyst. If used correctly, it could boost their moat and accelerate long-term growth across all verticals.

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Insider Ownership

As with any company, you want management’s goals to be aligned with those of shareholders.

In Hims’ case, that alignment is clear.

Insiders still own over 11% of the company, even at the current $12 billion valuation, reinforcing strong long-term incentives.

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Valuation Model

Hims expects to grow revenue at a 23 percent CAGR from 2025 to 2030.
Assuming growth then decelerates to 15 percent between 2030 and 2035, revenue would reach approximately 13.1 billion dollars.

With a long-term adjusted EBITDA margin target of 25 percent and applying a 15x EBITDA multiple, Hims would be valued at around 50 billion dollars.

This is likely a conservative estimate.

Hims has a proven track record of underpromising and overdelivering.

For example, their 2022 guidance projected at least 1.2 billion dollars in revenue and 100 million in adjusted EBITDA for 2025.

Now, they’re on track to generate over 2.4 billion dollars in revenue in 2025 and have already reported 91 million in adjusted EBITDA in Q1 alone.

If this level of overperformance continues, and this is yet another case of Hims lowballing their own potential, the company could ultimately command a much higher valuation.

Their total addressable market is expected to reach 1 trillion dollars this year.
Given their dominance in telehealth and consistent execution, a valuation above 50 billion dollars seems well within reach.

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Now let’s explore a more aggressive scenario

If Hims were to once again double their long-term guidance, and still grow at 15 percent CAGR through 2030 to 2035, using the same margin and multiple assumptions, they could achieve a 100 billion dollar valuation, roughly 8x today’s market cap.

That would represent the most bullish scenario, but it comes with caveats.
Achieving the same level of overperformance without a catalyst as significant as the GLP-1 shortage would be difficult.
And as the company scales, maintaining such high growth rates becomes increasingly challenging.

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So, in summary:

• A conservative but bullish scenario could deliver a 4x return over the next 10 years

• A bullish but feasible scenario could lead to a 6x return

• The maximum upside case may yield an 8x return, assuming near-flawless execution and unexpected catalysts
  

All of these outcomes are undeniably bullish and depend on continued perfect execution, something Hims has already demonstrated. And in every case, they would offer strong long-term CAGR for investors.

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Risks

Keep in mind that although the 4x case is labeled as conservative, it still assumes the company will be successful. All three scenarios, 4x, 6x, and 8x, are ultimately part of a bullish outlook on Hims & Hers.

As with any company, there are risks.

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Competition

The first risk is competition.

Someone else could do what Hims does, but better. This is a general risk that applies to any business. However, the key question is whether Hims has a lower moat than others, which could make this a more pressing concern. I’d argue that it does.

Hims does not have an impenetrable moat.

It is not Amazon, ASML, or a legacy pharma company with hundreds of patents and guaranteed cash flows through 2045. Hims operates in a space that makes it more susceptible to competition.

The most obvious threat is Amazon.

While they have made attempts to compete with Hims, they have not yet managed to break through. But given their resources, they could easily invest in a better website, offer a more seamless customer experience, and bundle health services into Prime. That could allow them to attack Hims from angles that are hard to defend against.

Even so, we’ve seen time and again that this type of disruption often does not materialize. The big fish does not always eat the small fish.

The small fish is faster, more agile, and can navigate complex waters with ease.
The big fish is often slower, more bureaucratic, and too distracted to offer the best possible product.

At this point, Hims already has millions of happy subscribers, and when it comes to healthcare, people are reluctant to switch.
If your treatment is working well and you are happy with the service, you are not going to gamble with your health.

This gives Hims a sticky customer base.

As they continue expanding their offering, increasing manufacturing capacity, and delivering a consistently high-quality product, they will keep strengthening their position.

They are growing in a market that clearly lacked a centralized, high-convenience platform for health optimization. However, the bigger your profit, the higher the incentives for other companies to invest in taking some of your share.

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Limited Differentiation

The second risk is essentially an extension of the first, and it’s the lack of differentiation.

It’s not that Hims can’t differentiate or that management is doing something wrong.
The concern lies in how far they can actually differentiate.

Hims isn’t doing anything revolutionary from a technology standpoint.

They’re not transforming computing like NVIDIA, developing advanced robotics, building foundational AI models, or doing anything that is technically complex or deeply defensible.

At its core, Hims sells generics, supplements, and treatments that are not fundamentally unique.

Their biggest advantage, and the factor I believe gives them most of their premium positioning, is their personalization.

Owning their own labs and the ability to compound customized medications is a real strength.

Their website is also impressive: it’s easy to navigate, visually clear, and offers a smooth, streamlined experience.

But beyond that, and a strong marketing strategy, their differentiation is limited.

So yes, they do have a moat.
There is differentiation. And that has helped them achieve strong market share and healthy margins.
But there are limits to how far this can go.

Compounding personalized medications is not cutting-edge technology, and while their customer-facing experience is strong, it essentially comes down to good product design and web development.

Even their dataset and experiments with AI are not major differentiators at this stage.
Companies like Tempus already have greater resources and more technical sophistication in that area.

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Here’s the bottom line:

Hims is fundamentally attractive.
The business is well managed, the metrics are excellent, and the industry is promising.
But there is a hard ceiling on how much they can truly separate themselves from potential competitors.

Right now, they are clearly the best at what they do, but nothing guarantees that another player won’t come along who offers something equally good.

No matter how much they expand their offerings or improve their interface, Hims is not operating at the edge of innovation.
And that limits how far they can build or defend a deep moat.

That’s why, despite my confidence in the business, Hims cannot be a huge position in my portfolio.
I’ve been buying since $15, and based purely on fundamentals, I would’ve felt comfortable allocating 50% of my portfolio to it.

But I didn’t. Because the real risk isn’t the current lack of moat, it’s the inability to meaningfully expand and deepen that moat in the long term.

It reminds me of companies like Nike.

They have a strong brand, high-quality products, good management, and decades of success.
Their differentiation lies in brand equity, consistency, and marketing.
But that differentiation also has limits.

At the end of the day, shoes and sweatpants are not unique products, and anyone with the budget can contract manufacturers in Southeast Asia to replicate them.
Nike’s brand protects them to an extent, but product complexity does not.

Even a company like Nike, with cultural presence and a dominant market share, has struggled in recent years because of this.
There is only so much they can do to stop new entrants.

The same principle applies to Hims.

Can this change in the future? Possibly.
Their growing health dataset and potential for AI integration could become stronger assets.

But for now, Hims is not developing the next cancer breakthrough, and their ability to build an unreplicable business model is still very limited.

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Conclusion

Hims is a wonderfully managed company, experiencing hypergrowth, with solid financials, and operating in a rapidly expanding, multi-hundred-billion-dollar TAM.

The company is wisely allocating its resources to become a vertically integrated, AI-powered online health optimization ecosystem.

As much as I’d like to say otherwise, I believe the 10x possibility is out of reach if you’re buying at current levels.
The maximum potential I can see is an 8x return in 10 years, which is not far off, but even that scenario is unlikely.
Now, that projection is based on the current $55 share price.
If you take advantage of potential dips, you could certainly improve your chances of getting a great return from this stock.

However, keep in mind that there are clear risks involved, the most important being competition and the limited potential for deep differentiation.

The extent to which Hims can maintain its market share and succeed in new segments will ultimately depend on execution, and their track record earns the benefit of the doubt.

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My final take is that Hims is a strong company that will likely be a good addition to the portfolio of many growth-oriented investors, as long as you’re prepared to keep a close eye on its progress and ensure that this story of near-perfect execution continues to be written in the same ink.