6/21/24 :: VROCKSTAR :: 
HIMS
Prefer other names, reassess <$15 k?
I'm going to keep the comment short bc this one is a sort of obvious "stay on the sidelines" to me.
- stock has had a great bump since announcing they're selling cheap alts to the weight loss juice. cool.
- great gross margins, but when you look at the SG&A (there's no R&D in this biz - which i don't like) the SG&A basically drives 100% of the gross profit. which means, perhaps they get some sort of leverage in the future but it's not happened yet.
- good portfolio that allows a lot of cross/ up selling. but again refer to the prior comment.
- so the cash gen is all we can hang our hats on today (not growth, or some sort of growth multiple), and they dilute a lot (see stock comp) more than the organic cash gen.
- my conclusion is it's a great brand with great traction and recently great news. hence the stock move. but to get this thing higher and sustainably, we need either other larger announcements (unlikely), a few more Q's of results (that will take time), or some sort of buyout (I don't typically use this argument to own something unless the stock is reaching super low lows and there's some form of identifiable R&D value - not the case here - brand sure - but again - no inflection yet).
the $15/shr target to take a look again is still a place i'd unlikely own it, but willing to reassess here. i think stock is probably worth closer to $10 all else equal today, but i know that won't earn me any fans holding the stock (tho i don't care bc i write these notes mainly for myself but publish for benefit of others if they can contribute thoughts that augment the thesis and we can make more money together).
so don't get too hard just yet for this one.
V
HIMSPrefer other names, reassess <$15 k?
I'm going to keep the comment short bc this one is a sort of obvious "stay on the sidelines" to me.
- stock has had a great bump since announcing they're selling cheap alts to the weight loss juice. cool.
- great gross margins, but when you look at the SG&A (there's no R&D in this biz - which i don't like) the SG&A basically drives 100% of the gross profit. which means, perhaps they get some sort of leverage in the future but it's not happened yet.
- good portfolio that allows a lot of cross/ up selling. but again refer to the prior comment.
- so the cash gen is all we can hang our hats on today (not growth, or some sort of growth multiple), and they dilute a lot (see stock comp) more than the organic cash gen.
- my conclusion is it's a great brand with great traction and recently great news. hence the stock move. but to get this thing higher and sustainably, we need either other larger announcements (unlikely), a few more Q's of results (that will take time), or some sort of buyout (I don't typically use this argument to own something unless the stock is reaching super low lows and there's some form of identifiable R&D value - not the case here - brand sure - but again - no inflection yet).
the $15/shr target to take a look again is still a place i'd unlikely own it, but willing to reassess here. i think stock is probably worth closer to $10 all else equal today, but i know that won't earn me any fans holding the stock (tho i don't care bc i write these notes mainly for myself but publish for benefit of others if they can contribute thoughts that augment the thesis and we can make more money together).
so don't get too hard just yet for this one.
V
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.