HIMS 7.2.26

It's funny because just to add some credibility to what I'm talking about, we were even short the company for most of 2025. Obviously, we weren't holding it the whole time, just because we knew what the GLP-1-compounded side of the business was basically doing to it. It was jet fuel, but it was also a massive target on their back. So we understand that maybe not all the decisions that Andrew has made have been great. But at the end of the day, even when you mentioned international expansion, in our mind, it's a great hedge against relying solely on the American healthcare system.

It's very different between the U.S. and the EU, or the U.S. and Canada. There's socialized healthcare. But what's interesting is that if you can diversify not only your revenue sources but also the models of those revenue sources, you can actually do very well because you're getting to the same endpoint. You're just getting there in different ways. Here in America, you can get cheap medications like generics, but it's also hard to actually get to see a doctor. Whereas in the EU, it's actually pretty easy to go see a doctor, it's just that they don't cover the medication side of things.

Exactly. So you're getting to the same endpoint just in different ways. And Hims has already proven that in America, we do very well as a basically marketing-and-distribution company for medication. And then, when they acquired Eucalyptus and the U.K.-based company, it was just a different version of that. And if they've already been doing it, great, wrap up their operations under a big parent company that has the capital resources in order to push it further, probably faster than all the other competitor companies. And you're looking pretty good.

It's not a first-mover-advantage type of situation. I use the example of Uber (UBER). It's not like when Uber first came online; it was like, “All right, we need to spread out as quickly as possible to plant our flag everywhere.” No, that's not the case for Hims because these guys have already been doing it in Canada. They've already been doing it in the U.K., Germany, and France.

Oh yeah, because I think they were actually founded a couple of months apart from each other. So they're very intertwined as far as brand awareness goes. That's another plus for us, they've just done so well.

One point that doesn’t get enough attention is their marketing approach. This doesn’t refer to the more recent Super Bowl campaigns attacking pharma and the system. Looking back at their earlier marketing campaigns, what they do differently from many other telehealth companies is actually very smart. It kind of bit them at the beginning, but it actually worked out over time. They cater their marketing campaigns to a lot of the younger audience. And I mean younger, like 20s to 30s. And the benefit there is if you can obviously get them early, then they're already in your ecosystem.

As an example, you capture a 25-year-old male who comes in for erectile dysfunction. But then, over the next five or 10 years, maybe there's something wrong with his skincare, or 10 years from now, he starts to go bald and gets hair loss. There was this very interesting difference between a lot of telehealth companies that were just trying to grab the easiest person they could get, which typically was an older guy with erectile dysfunction. Hims kept targeting the younger crowd because they knew they would eventually get older and contract more diseases and conditions, and they were already on the platform. So, where would you most likely go? The same platform.

And that's why, when it comes to testing kits, as we get older, I've done my own testing. Not with Hims yet, I did it previously with Function Health. People do it because they get nervous or want to see how they’re doing. Then Hims is there, ready to prescribe something. It’s actually pretty genius.

Because I know they target a one-year payback, which is good. But then again, if you fall off for whatever condition, the odds of you coming back on for something else because you've already used them before are incredibly high. So what's your customer acquisition cost on that? It's zero. Your payback is basically immediate. So that's what's very interesting. The more they keep launching new things, the more they can create a flywheel, the more people it can get on it, the more data it can gather, etc.

I think they're going to be launching, hopefully sometime this year, their own at-home testing kit. So you don't even have to go to a Quest (DGX). You don't even have to go to one of these blood testing facilities to do it. That was the YourBio acquisition in 2025. So I think they're making a lot of smart moves. Again, am I the happiest with Andrew and his stupid decisions with GLP-1s? No, but now that's behind us, at least I hope so.

I do agree with you, but I’d push back because you have to be careful when you go down those conditions. Yes, the market opportunity is there. I know some people say they can just name various categories, like sleep, ear, nose, and throat, or energy supplements. But the thing is, it's so hard to get those people because either the drugs themselves are super cheap, or they're covered by insurance, or the market is so saturated that it's just really hard to compete. So that's why you go down this rabbit hole. When it came to GLP-1s, it was basically like you were just scooping up gold on the sandy beaches because it was just so easy to make money. So it's like, why not, right? Some people were saying they could easily do massive categories like blood pressure. There are tons of Americans who suffer from blood pressure issues like hypertension. But the pills themselves cost you a couple of bucks, it's not really going to move the needle.

But what I mentioned before that I just thought about is, are you familiar with Mark Cuban's Cost Plus Drugs? Ingenious idea. Why can't you basically get somebody on with a blood test kit? You tell them they have high blood pressure. And then on the backend, you can go ahead and prescribe them blood pressure medication.

So if you look at the market hard enough and long enough, you basically can see what is and what isn't working. And then you can decide from there. I mean, they're sitting on a ton of cash. You can decide what we can just bolt on or loop into our existing offering that somebody else is already doing, but we're going to be better at it because we already have 20 other things. I wouldn't necessarily say that's a moat. I'd say that's more just a competitive advantage.

But that's basically how I see it. You have all these little startup companies popping up. I just saw one the other day, launching a wearable to track your hormones. It wasn't even your blood sugar; it was about tracking your hormones from a sensor on your wrist. I'm like, oh my God, they could easily do that. They're already on TRT and HRT. It's just stuff like that where I'm sure they're just monitoring the market and watching what they can do, what makes the most sense, whether it's a partnership or a buyout or they're going to build it on their own. So that's how we see things. And if you want to talk about the non-fundamental side of this business —

So the non-fundamental stuff. When it comes to insider selling, the easiest excuse is that they're just timed selling. But I'm not the biggest fan of that if they never buy anything. I think it's just an excuse to finally recognize money, especially since they just keep getting more stock options. It's basically them tapping into their little piggy bank of shares, and that's how Andrew is affording his multimillion-dollar new house in California. So no, I don't really like that. I don't think it's going to change, though. I mean, these guys just keep getting free money with options, so it is what it is, unfortunately.

The other fundamental thing is that there's a psychopathic cult following in the stock. So if you add that as a bullish indicator, it's that these people just live and die by this stock and say Hims to $100. So you got that going for you.

Oh, I think Hers is going to be way bigger than Hims. One hundred percent. That's actually one of the points that got us involved in 2024, because we could see the runway of Hers being much bigger than Hims. If you look at the data, on average, women go to the doctor for various reasons way more than men. I forget the exact numbers, but when they have an issue, they go way more. And that's the thing. Let's call a spade a spade. They want to make sure that they look good, they feel good, etc. Men are just like, I'm always good, what are you talking about? Until they're not, which is the erectile dysfunction thing. But women, the slightest inconvenience, they're going to want to find something to fix it.

So that's why whenever you look at their shareholder letters, they always highlight how fast Hers is growing because it's a really big part of the business. You can look at the alt data with the app downloads. Hers is very much up there. So yeah, we're very bullish on Hers, and I think eventually it’ll actually be the majority part of the business.

It's not a secret. It's just getting really competitive to get customers. If you look at it in 2020 and 2021, everybody was flush with cash. They were just spending any amount of dollars to basically get a customer. And then in the post-COVID era, 2022, 2023, 2024, it was still elevated, but it came down significantly just because there wasn't as much money to go towards it anymore. And then now that we're out of it, 2024, 2025, 2026, it's gone back up again, especially with the rise of GLP-1s. Everyone's been bidding on the same keyword searches.