Paul Cerro was long Hims & Hers in 2024, short it through the compounded GLP-1 unwind, and covered when the stock broke $14 after Q1. He's long again, and his thesis has almost nothing to do with peptides, testosterone, or the international launches everyone else is excited about. Those, he says, are table stakes. Hims has never had a problem acquiring customers. It has a problem keeping them, and subscriber counts have barely moved in three quarters. His argument is that labs and patient data are what push retention and LTV up, and that is the part the market isn't paying for.

I push back in three places. The data play doesn't look unique to me: Whoop and Oura own a wearable and a daily interaction, Hims owns commoditized blood work, and if Hims does unlock it, Apple or Amazon can walk in on top of them. The 2030 targets ask you to double trust management, once on 4x-ing EBITDA and again on a very heavily adjusted EBITDA number, from a CEO Paul says he wouldn't trust to walk his dog. And when peptides go legal, I think a hundred Instagram churn-and-burn startups compete away the customer acquisition edge. Paul's answers are worth the hour, especially the balance-sheet argument for a price war and the Ro story. We close on what to watch in the August 10 print.

Paul's Hims & Hers write-up: https://www.cedargroveresearch.com/p/hims-whoever-controls-the-data-controls-the-industry

This episode is sponsored by Trata: https://trata.com/hims. Trata is two investors who hop on and talk about a stock they're both in, sometimes one long and one short, sometimes both on the same side, but always about what actually drives the stock up or down. Trata now has an MCP, so you can point your AI agent at a company and pull the transcript, which is one of the first things I do when I start looking at a name. They have four HIMS calls, all less than a year old and one about a month old, and if you follow the link you can get their most recent HIMS coverage as a free trial.

Chapters:

(00:00) Long it, shorted it, now long again

(02:57) Paul on the setup right now

(04:17) What he learned building Ro

(05:19) How cash-pay healthcare actually works

(11:54) The original 2024 Hims thesis

(13:26) The compounding loophole and its expiration date

(15:58) Covering the short and going long again

(18:54) Acquisition was never the problem, retention is

(20:35) Why the money in healthcare is chasing data

(22:33) My pushback: what is unique about Hims' data?

(26:32) Hims versus Whoop, Oura and the Apple Watch

(29:21) Valuation: 30x 2026 EBITDA, 6x 2030

(32:56) Why international makes the targets conservative

(34:12) Double trusting a heavily adjusted number

(36:16) Icarus, Napoleon and the Teflon Don

(40:05) On putting too much faith in regulators

(43:49) Peptides and the market nobody has priced

(45:36) Chinese peptides and what is in the vial

(50:12) Can a hundred Instagram startups undercut Hims?

(54:40) Why the balance sheet decides a price war

(56:13) What to watch in the August 10 print

(57:40) CVS, Walgreens, Walmart and Amazon

(1:00:49) Closing thoughts

Paul Cerro / Cedar Grove: https://www.cedargroveresearch.com

Links:

Yet Another Value Blog - https://www.yetanothervalueblog.com

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Production and editing by The Podcast Consultant - https://thepodcastconsultant.com/