Hims & Hers Health (HIMS) is back in focus as investors weigh its expanding GLP-1 weight-loss offering, its new partnership with Novo Nordisk, and the international acquisition of Eucalyptus.

Hims & Hers Health shares trade at US$32.96 after a strong recent run, with a 30 day share price return of 38.78% and a 90 day share price return of 58.16%, while the 1 year total shareholder return is down 23.26% but the 3 year total shareholder return is up around 3x. This suggests near term momentum has picked up even as longer term holders have experienced a wide range of outcomes.

With GLP-1 expansion, the Novo Nordisk partnership and telehealth growth in focus, this can be a good moment to scan the wider opportunity set and see how other healthcare AI focused platforms are trading using the 38 healthcare AI stocks.

With Hims & Hers Health now trading above the average analyst price target and recent returns running hot, the key question is simple: is the stock already fully priced, or is the market underestimating future growth potential?

Most Popular Narrative: 81% Undervalued

Hims & Hers Health closed at $32.96, while the most followed narrative, according to Deep_Insights, anchors fair value at $173.02 using a 7% discount rate and a long term growth story.

Over the long term (10yrs), Hims & Hers has an unusually large addressable market ahead of it. The company’s growth is driven by three reinforcing dimensions:

• Expanding market size, digital healthcare adoption continues to grow globally

• Category expansion, new offerings such as hormonal health, longevity, and sleep

• International scaling, multiple geographies already in the pipeline (e.g. Brazil, Australia)

• Growth inside of the current categories

Curious how this multi dimensional growth story backs a much higher fair value for Hims & Hers Health? The narrative leans heavily on rapid revenue expansion, rising margins and a rich profit multiple that is more often associated with mature software style platforms. Want to see how those assumptions stack together into that $173.02 figure?

Result: Fair Value of $173.02 (UNDERVALUED)

However, this optimistic Hims & Hers Health narrative still hinges on successful execution of acquisitions like Eucalyptus, as well as on GLP-1 weight loss partnerships meeting expectations.

Another View: SWS DCF Model Flags Overvaluation

The 81% undervalued narrative for Hims & Hers Health contrasts with our DCF model, which estimates future cash flow value at just $3.86 per share, far below the current $32.96 price. If the cash flow view is closer to reality, how much margin for error is really left?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Hims & Hers Health for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 44 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If the split between bullish and cautious views on Hims & Hers Health leaves you undecided, now is a good time to test the numbers yourself and decide where you stand. To balance the enthusiasm with the concerns in one place, take a closer look at the 1 key reward and 1 important warning sign

Looking for more investment ideas beyond Hims & Hers Health?

If Hims & Hers Health has sharpened your thinking, you can continue that momentum by scanning other opportunities that might fit your risk tolerance, time horizon and return goals.

• Target steady compounding by reviewing companies with strong cash generation and attractive valuations using the 44 high quality undervalued stocks.
• Prioritise resilience in tougher markets by checking out companies screened for 67 resilient stocks with low risk scores.
• Look for quality stocks that remain off most radars by exploring our screener containing 19 high quality undiscovered gems.

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.