Becker Private Equity & Business Podcast: "Hims & Hers Misses Estimates" – August 5, 2025

Host: Scott Becker

Introduction

In this episode of the Becker Private Equity & Business Podcast, host Scott Becker delves into the recent financial performance of Hims & Hers, a prominent player in the telehealth and personal wellness industry. Released on August 5, 2025, the discussion centers around the company's missed revenue estimates, its implications on Wall Street valuations, and a comparative analysis with Palantir's contrasting performance.

Hims & Hers' Financial Performance

Scott Becker opens the episode by addressing the unfolding scenario at Wall Street regarding Hims & Hers:

Scott Becker [00:30]: "Hims and Hers is trading at an explosive price to earnings ratio, up 144% year to date."

Despite the impressive 144% year-to-date increase, the company encountered a slight setback in its quarterly revenue projections. Wall Street had anticipated revenues of $552 million for the quarter, but Hims & Hers reported $545 million, missing the target by approximately 1.5%.

Scott Becker [01:15]: "It missed revenues, its target for this quarter, by about a percentage and a half. It was expecting 552 million based on Wall Street estimates. It ended up with 545 million overall."

Implications of Missed Estimates

Becker emphasizes the challenges faced by high-growth companies like Hims & Hers when they miss revenue estimates, even marginally:

Scott Becker [02:00]: "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."

The high price-to-earnings (P/E) ratio signifies that investors have high expectations for future growth. Therefore, any deviation from projected revenues can lead to significant stock price volatility.

Stock Market Reaction

Following the earnings report, Hims & Hers experienced a noticeable dip in its stock price:

Scott Becker [02:45]: "The stock now is down 7 to 8% today."

This decline reflects investor disappointment and recalibrated expectations in light of the revenue miss, despite the company's strong performance over the year.

Comparative Analysis: Palantir

In contrast to Hims & Hers' experience, Becker briefly touches upon Palantir's robust performance during the same period:

Scott Becker [03:15]: "We'll talk separately about Palantir, which is having the opposite experience and rocking and rolling and had a great quarter."

While details about Palantir are reserved for another discussion, the contrasting outcomes highlight the varying investor sentiments and market dynamics affecting different companies within the high-growth tech sector.

Overall Performance and Market Sentiment

Becker summarizes the current status of Hims & Hers, noting the dichotomy between its stellar year-to-date performance and the recent setback:

Scott Becker [04:00]: "Hims and hers is having a great year, up 144%, missed estimates. So it's down a little bit today."

This encapsulates the delicate balance high-growth companies must maintain between sustaining investor confidence and meeting ambitious financial targets.

Conclusion

Scott Becker wraps up the episode by reiterating the critical takeaways from Hims & Hers' financial report:

• High Growth and High Expectations: The 144% year-to-date stock increase reflects significant investor optimism and expectations for continued expansion.
• Sensitivity to Revenue Misses: Even a minor shortfall in revenue can have substantial negative impacts on stock performance when valuations are exceptionally high.
• Market Volatility: The immediate 7-8% drop in stock price underscores the volatility that can arise from investor reactions to earnings reports.
• Comparative Insights: The mention of Palantir's contrasting success sets the stage for further discussions on factors that contribute to sustained market confidence.

Scott Becker [05:00]: "Thank you for listening to the Becker Business Podcast. The Becker Private Equity Podcast."

Key Takeaways

• Hims & Hers Performance: Despite a strong year, missing revenue estimates can sharply impact stock prices when high growth is already priced in.
• Investor Expectations: High P/E ratios indicate elevated expectations, making companies more susceptible to negative market reactions if projected targets aren't met.
• Market Dynamics: The contrasting performance of companies like Palantir highlights the importance of consistent financial performance in maintaining investor trust.

This episode offers valuable insights for investors and business enthusiasts keen on understanding the intricate relationship between growth expectations, financial performance, and stock market reactions in the private equity and business landscape.