Does the Dip in Hims & Hers Stock Signal Opportunity After Latest Product Launch Buzz?

• Ever wondered whether Hims & Hers Health is actually trading at a bargain or if the excitement has already been priced in? Let’s dig into what might just be behind all that buzz.
• After gaining an impressive 75.3% over the last year and a huge 603.8% in the past three years, the stock has recently cooled off, down 29.5% in the past 30 days.
• Headline news has fueled the latest moves, with increased attention on the company's direct-to-consumer telehealth model and new product launches that are shaking up the healthcare landscape. Partnerships and expansion into new markets are ramping up, adding to both investor optimism and volatility in the share price.
• Right now, Hims & Hers Health clocks a valuation score of 2 out of 6 for undervaluation, so there is room to look deeper. Next, we will break down how analysts, algorithms, and the broader market assess value, before revealing an even sharper way to spot opportunities at the end of this article.

Hims & Hers Health scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Hims & Hers Health Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's value by projecting its future cash flows and discounting them back to today's value. This process provides insight into the business’s long-term earning power. For Hims & Hers Health, the latest trailing twelve month Free Cash Flow stands at $189.4 million.

Analysts project steady growth for Hims & Hers, with Free Cash Flow estimates reaching $490.2 million by 2029. Over the next five years, estimates indicate a rise from $205.9 million in 2026 to $490.2 million by 2029, with figures then extrapolated into the following decade. These projections are presented in the company’s home currency, the US dollar.

Based on this model, Hims & Hers Health has an estimated intrinsic value per share of $74.25, meaning the stock is trading at a 44.7% discount to its calculated fair value using the DCF method. This sizable margin suggests the stock may be undervalued according to this cash flow-based analysis, particularly since the current share price is much lower than the model’s valuation.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Hims & Hers Health is undervalued by 44.7%. Track this in your watchlist or portfolio, or discover 870 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Hims & Hers Health.

Approach 2: Hims & Hers Health Price vs Earnings

For companies that are profitable or near profitability, the Price-to-Earnings (PE) ratio is a widely used and meaningful way to assess valuation. The PE ratio allows investors to compare how much they are paying for a dollar of the company’s earnings, making it especially useful for evaluating businesses like Hims & Hers Health that are generating positive bottom-line results.

What counts as a “normal” or “fair” PE ratio can vary depending on factors such as how quickly the company is expected to grow, its risk profile, and the stability of its earnings. Growth companies often command higher multiples, reflecting higher expectations but also an increased level of risk if those projections do not materialize.

Currently, Hims & Hers Health trades at a PE ratio of 69.81x. This stands in sharp contrast to the healthcare industry average of 21.09x and a peer average of 29.02x. While the headline number seems high, it is useful to compare this to the company’s Fair Ratio, a proprietary metric developed by Simply Wall St. The Fair Ratio considers a broader set of factors including earnings growth prospects, industry dynamics, profit margins, company size, and risk, offering a much more tailored benchmark than simply looking at industry or peer averages.

For Hims & Hers Health, the Fair Ratio is calculated to be 48.52x. Since the actual PE is significantly higher than this Fair Ratio benchmark, it suggests that the current share price is running above what would be expected based on fundamentals and growth outlook. This indicates the stock may be overvalued when viewed through this lens.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1395 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Hims & Hers Health Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative lets you connect your unique perspective about Hims & Hers Health, including your expectations for future revenue, earnings, and margins, with a financial forecast that calculates your own fair value for the company. Essentially, you tell the story behind the numbers.

On Simply Wall St’s Community page, millions of investors use Narratives as a simple, interactive tool: you select your assumptions, and the platform automatically links the company’s story to a dynamic valuation. As news or earnings change, Narratives are updated in real-time, ensuring that your outlook is always based on the latest information.

This approach makes it easy to compare your fair value with today’s share price, so you can quickly see whether Hims & Hers Health looks like a buy, sell, or hold according to your own thesis.

To illustrate, one investor’s optimistic Narrative sees Hims & Hers Health as the Amazon of personalized care, with a fair value of $114 per share. Another, more cautious view values it at just $28 based on regulatory risks and slower growth. This proves there is no single “right” answer, only the perspective that best matches your view.

Do you think there's more to the story for Hims & Hers Health? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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