We assign a fundamental rating of 5 out of 10 to HIMS. HIMS was compared to 102 industry peers in the Health Care Providers & Services industry. HIMS has an average financial health and profitability rating. HIMS is valued quite expensively, but it does show have an excellent growth rating.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year HIMS was profitable.
In the past year HIMS had a positive cash flow from operations.
In the past 5 years HIMS reported 4 times negative net income.
The reported operating cash flow has been mixed in the past 5 years: HIMS reported negative operating cash flow in multiple years.

1.2 Ratios

Looking at the Return On Assets, with a value of 5.99%, HIMS belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
With an excellent Return On Equity value of 23.03%, HIMS belongs to the best of the industry, outperforming 91.18% of the companies in the same industry.
HIMS's Return On Invested Capital of 5.84% is fine compared to the rest of the industry. HIMS outperforms 60.78% of its industry peers.

		Industry Rank	Sector Rank
ROA	5.99%
ROE	23.03%
ROIC	5.84%

ROA(3y)-1.82%

ROA(5y)-6.51%

ROE(3y)-0.49%

ROE(5y)-7.04%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

HIMS has a better Profit Margin (6.05%) than 82.35% of its industry peers.
HIMS has a Operating Margin of 5.96%. This is in the better half of the industry: HIMS outperforms 66.67% of its industry peers.
HIMS has a better Gross Margin (75.01%) than 90.20% of its industry peers.
In the last couple of years the Gross Margin of HIMS has grown nicely.

		Industry Rank	Sector Rank
OM	5.96%
PM (TTM)	6.05%
GM	75.01%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y1.84%

GM growth 5YN/A

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

HIMS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
HIMS has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, HIMS has more shares outstanding
HIMS has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

2.2 Solvency

HIMS has an Altman-Z score of 3.84. This indicates that HIMS is financially healthy and has little risk of bankruptcy at the moment.
HIMS has a better Altman-Z score (3.84) than 74.51% of its industry peers.
HIMS has a debt to FCF ratio of 8.13. This is a slightly negative value and a sign of low solvency as HIMS would need 8.13 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 8.13, HIMS is in line with its industry, outperforming 53.92% of the companies in the same industry.
A Debt/Equity ratio of 1.67 is on the high side and indicates that HIMS has dependencies on debt financing.
With a Debt to Equity ratio value of 1.67, HIMS is not doing good in the industry: 68.63% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Debt/Equity	1.67
Debt/FCF	8.13
Altman-Z	3.84

ROIC/WACC0.65

WACC8.92%

2.3 Liquidity

A Current Ratio of 1.88 indicates that HIMS should not have too much problems paying its short term obligations.
The Current ratio of HIMS (1.88) is better than 77.45% of its industry peers.
A Quick Ratio of 1.64 indicates that HIMS should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.64, HIMS is doing good in the industry, outperforming 67.65% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.88
Quick Ratio	1.64

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WACC

Debt/Equity

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3. Growth

3.1 Past

HIMS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 22.73%, which is quite impressive.
The Earnings Per Share has been growing by 60.35% on average over the past years. This is a very strong growth
Looking at the last year, HIMS shows a very strong growth in Revenue. The Revenue has grown by 78.02%.
The Revenue has been growing by 75.77% on average over the past years. This is a very strong growth!

EPS 1Y (TTM)22.73%

EPS 3YN/A

EPS 5Y60.35%

EPS Q2Q%-81.25%

Revenue 1Y (TTM)78.02%

Revenue growth 3Y75.77%

Revenue growth 5YN/A

Sales Q2Q%49.16%

3.2 Future

Based on estimates for the next years, HIMS will show a very strong growth in Earnings Per Share. The EPS will grow by 28.57% on average per year.
Based on estimates for the next years, HIMS will show a very strong growth in Revenue. The Revenue will grow by 22.77% on average per year.

EPS Next Y-12.6%

EPS Next 2Y5.34%

EPS Next 3Y13.84%

EPS Next 5Y28.57%

Revenue Next Year60.27%

Revenue Next 2Y37.54%

Revenue Next 3Y31.01%

Revenue Next 5Y22.77%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 54.85 indicates a quite expensive valuation of HIMS.
HIMS's Price/Earnings is on the same level as the industry average.
HIMS is valuated expensively when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 49.43 indicates a quite expensive valuation of HIMS.
HIMS's Price/Forward Earnings is on the same level as the industry average.
HIMS is valuated expensively when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	54.85
Fwd PE	49.43

4.2 Price Multiples

HIMS's Enterprise Value to EBITDA is on the same level as the industry average.
HIMS's Price/Free Cash Flow ratio is in line with the industry average.

		Industry Rank	Sector Rank
P/FCF	56.43
EV/EBITDA	40.19

4.3 Compensation for Growth

HIMS has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as HIMS's earnings are expected to grow with 13.84% in the coming years.