Telemedicine And AI Integration Will Redefine Digital Healthcare

Key Takeaways

• Vertical integration in diagnostics and advanced compounding boosts personalized care, user retention, and unlocks new, durable revenue streams.
  
• Investments in AI, data platforms, and global expansion support scalable, automated healthcare delivery, positioning the company for higher margins and sustained earnings growth.
  
• Rising regulatory challenges, reliance on lifestyle treatments, high competition, costly international expansion, and expensive customer acquisition threaten margins, revenue growth, and future profitability.

Catalysts

Operates a telehealth platform that connects consumers to licensed healthcare professionals in the United States, the United Kingdom, and internationally.

• Analyst consensus sees lab testing and peptide facility acquisitions as simply expanding treatment diversity, but the vertical integration of diagnostics and advanced compounding allows Hims & Hers to capture far more data per user, enabling a step-change in proprietary personalized care; this unlocks longer patient lifetimes and multiple new revenue streams, materially boosting both ARPU and retention, leading to exponential revenue and lifetime value growth.
  
• While analysts broadly agree that AI investments will enhance efficiency and outcomes, the company's vision for a unified intelligent data platform-integrating structured data, diagnostics, and wearables-positions Hims & Hers not just to improve margins, but to create a fully automated, continuously-learning digital health ecosystem that could reset the cost structure of large swathes of primary and specialty care, sharply expanding net margins and delivering sustained earnings acceleration.
  
• The international expansion strategy, propelled by the ZAVA acquisition and a scalable tech stack, gives Hims & Hers the infrastructure to rapidly replicate its direct-to-consumer, personalized care model in highly regulated and underpenetrated global markets; early-mover advantages and focused market launches could drive multibillion-dollar revenue opportunities outside the U.S., making current revenue forecasts highly conservative.
  
• The development of an all-in-one, tech-enabled preventative health membership-offering diagnostics, continuous care, and proactive wellness-can position Hims & Hers as the default health platform as consumer behavior shifts toward digital and self-directed health, potentially unlocking an order-of-magnitude increase in subscribers and transforming revenue visibility and durability.
  
• By leveraging the industry's most comprehensive data set across millions of interactions, Hims & Hers is positioned to lead the transition to proactive, longitudinal healthcare-enabling bundled, multi-condition personalized offerings that benefit from operating leverage and AI-powered automation, supporting higher margins and structurally raising long-term earnings power beyond current analyst models.

Hims & Hers Health Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Hims & Hers Health compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Hims & Hers Health's revenue will grow by 26.9% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 9.6% today to 8.1% in 3 years time.
• The bullish analysts expect earnings to reach $333.8 million (and earnings per share of $1.59) by about August 2028, up from $193.6 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 76.8x on those 2028 earnings, up from 59.6x today. This future PE is greater than the current PE for the US Healthcare industry at 19.6x.
• Analysts expect the number of shares outstanding to grow by 4.12% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

Hims & Hers Health Future Earnings Per Share Growth

Risks

• Regulatory scrutiny is increasing around telehealth and data privacy; as Hims & Hers expands into at-home lab testing and international markets, compliance costs are likely to rise and any regulatory misstep could lead to significant penalties, negatively impacting net margins and earnings.
  
• The company relies heavily on lifestyle medications such as weight loss (especially GLP-1s), sexual health, and hair loss; any change in medical guidelines, negative publicity, evolving consumer preferences, or regulatory curbs on telehealth prescriptions could sharply reduce demand and thus lower future revenues.
  
• Aggressive international expansion, including the ZAVA acquisition and entry into markets with government-run healthcare, introduces risks around regulatory complexity, potential margin compression due to price-controlled environments, and operational distraction, all of which can reduce profitability and slow revenue growth.
  
• The digital health and DTC spaces are facing intensifying competition from large incumbent healthcare firms and new telehealth entrants; this competitive pressure could force Hims & Hers to lower prices, raise marketing spend to acquire and retain subscribers, and accept lower gross margins, all of which may impair future earnings growth.
  
• Customer acquisition costs remain high and may increase as digital advertising gets more expensive and as skepticism around digital health and privacy grows, which could result in customer growth lagging behind increased spend, compressing net margins and lowering the path to sustainable profitability.

Valuation

• The assumed bullish price target for Hims & Hers Health is $82.64, which represents two standard deviations above the consensus price target of $50.45. This valuation is based on what can be assumed as the expectations of Hims & Hers Health's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $85.0, and the most bearish reporting a price target of just $28.0.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $4.1 billion, earnings will come to $333.8 million, and it would be trading on a PE ratio of 76.8x, assuming you use a discount rate of 6.8%.
  
• Given the current share price of $51.05, the bullish analyst price target of $82.64 is 38.2% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.