Becker Business Podcast Summary
Episode: hims & hers Misses Estimates
Host: Scott Becker
Release Date: August 5, 2025
Overview
In this episode of the Becker Business Podcast, host Scott Becker delves into the recent performance of Hims & Hers Health, Inc., focusing on the company's financial results, market expectations, and the broader implications for investors. The discussion provides insightful analysis on why the company's stock, despite a stellar year-to-date performance, faced a downturn following the latest earnings report.
Hims & Hers: Year-to-Date Performance
Scott begins by highlighting the impressive growth Hims & Hers has achieved over the past year.
"Hims and her is having a great year, up 144% year to date."
– Scott Becker [01:15]
This substantial increase underscores the market's positive reception of the company's business model and growth prospects. However, such rapid growth has led to an "explosive price to earnings ratio," positioning the stock as highly sensitive to any deviations from expected performance.
Earnings Report and Revenue Miss
The core of the discussion centers on Hims & Hers' latest earnings report, where the company narrowly missed revenue expectations.
"It missed revenues, its target for this quarter, by about a percentage and a half."
– Scott Becker [03:22]
Wall Street had projected revenues of $552 million for the quarter, but Hims & Hers reported $545 million. While the miss appears minimal, in the context of the company's high valuation, even slight disappointments can have significant repercussions.
Market Reaction and Stock Performance
The immediate market reaction to the earnings miss was a noticeable decline in the stock price.
"The Stock now is down 7 to 8% today."
– Scott Becker [05:40]
This drop reflects investor sensitivity to growth metrics, especially when the company's valuation is heavily reliant on continued rapid expansion. The episode underscores the risks associated with high price-to-earnings ratios, where any underperformance can lead to amplified negative impacts on the stock price.
Comparison with Palantir
Scott contrasts the experience of Hims & Hers with that of Palantir, another high-growth company.
"We'll talk separately about Palantir, which is having the opposite experience and rocking and rolling and had a great quarter."
– Scott Becker [06:10]
While Palantir reported strong quarterly results and continued to thrive, Hims & Hers faced challenges despite an overall strong year. This comparison highlights how different companies navigate their growth trajectories and market expectations uniquely.
Investor Insights and Market Dynamics
The discussion touches upon the broader implications for investors in high-growth stocks. Scott emphasizes the importance of managing expectations and understanding the volatility that comes with high valuations.
"We were trading at such an explosive price to earnings ratio. This becomes punitive when you miss revenues even a little bit because people are banking on so much growth."
– Scott Becker [04:05]
Investors are advised to remain cautious and consider the sustainability of growth rates when investing in similarly positioned companies.
Conclusion
Scott Becker wraps up the episode by summarizing the key takeaways regarding Hims & Hers' recent performance and its impact on the stock. He reiterates the importance of monitoring earnings reports and understanding the underlying factors that drive stock valuations.
"Thank you for listening to the Becker Business Podcast. The Becker Private Equity Podcast."
– Scott Becker [09:50]
Listeners are encouraged to stay informed about market developments and consider the nuanced dynamics that influence high-growth companies.
Key Takeaways
- Hims & Hers' Impressive Growth: Achieved a 144% increase in stock price year-to-date.
- Earnings Miss: Narrowly fell short of revenue expectations by $7 million.
- High Valuation Risks: Explosive price-to-earnings ratio makes the stock sensitive to any performance deviations.
- Market Reaction: Experienced a 7-8% drop following the earnings miss.
- Comparative Performance: Contrasted with Palantir's robust quarterly results.
- Investor Caution: Highlights the need for cautious investment in high-growth stocks with substantial valuations.
This episode provides a comprehensive analysis of Hims & Hers' financial performance, market expectations, and the resulting stock market response. Scott Becker offers valuable insights for investors navigating the complexities of high-growth companies and emphasizes the importance of informed decision-making in volatile market conditions.