Regarding the actions that continue to beat the market, I suppose that your mind goes directly to companies leading to the burden in artificial intelligence (AI). Of course, actions such as PALANTOUT Technologies Or Core Stay in a strong technological sector.
But intelligent investors understand that there are a myriad of opportunities beyond the usual suspects of technology. A company that has become a new favorite among investors is telemedicine activity Hims & His Health(NYSE: HIMS). With actions up 157% in the last 12 months from the market, the market close on June 4, Hims & Hers Health resembles the next growth actions of monsters at the intersection of health care and technology.
Evaluate the state of Hims & Hers affairs, then take a look at what Wall Street thinks. Is the purchase of actions from this telemedicine a good idea right now? Read the rest to discover it.
Hims & Hers is a telemedicine platform that offers patients access to a variety of drugs, including for skin care, anxiety, sexual health and even weight loss.
At the heart of the business model of the company is a subscription platform. At the end of the first quarter, Hims & Hers included 2.4 million subscribers, which represents a 38% increase from one year to the next. This resulted in a turnover of $ 586 million for the quarter, up by an 111% jaw from one year to the next.
Keeping its activities mainly online, Hims and its own can benefit from two ways.
First, subscription income is recurrent and therefore carries high raw margins. Second, by keeping its user base using its offers, the company is flexible to spend less in marketing and invest in other areas, such as technology or research and development, in order to strengthen customer acquisition strategies.
By vision of management, Hims & Hers doubles investments in AI To get a better idea of its customer data. This could be a wise decision, as it can help the business unlock new expansion opportunities.
Image source: Getty Images.
While the above ideas paint an image of a new rapidly growing and disruptive solution in the health space, Wall Street does not yet seem completely sold on Hims and Hers.
During the last month, a certain number of research analysts in shares, including Piper Sandler, Citigroup,, America BankAnd Morgan Stanleyeach have maintained ratings of neutral, sale, underperformance or equal weight. Another way to see this is that among some of the largest banks in Wall Street, none seems to have a convincing purchase note on the stock of Hims & Hers.
In addition, estimating the average price among HIMS & HERS shares analysts is around $ 48, which implies a decrease of 12% compared to the negotiation levels on June 4.
Given the somewhat downward feeling of Wall Street, what could power the apparently unstoppable rally of the stock? I think that the short -term interest of the company could be the cause of the increase in its stock.
According to the graph above, around 35% Hims & Hers Float is sold short. Investors who short-circulate a stock are betting its price will drop. A short interest of 10% or more is considered to be unusually high. Not only is the short interest of Hims & Hers much higher than the usual references, but also uprising.
High abbreviated interest can feed volatility and even an increase in the price of action if investors who short-circulate an actions must buy shares of the company to return the borrowed shares and close their position. This is known as a short coverage, and it often leads to increases in a stock for an ephemeral period of time, adding to volatility. You might be more familiar with these dynamics as a short pressure.
Despite the notable growth in subscribers’ growth and market expansion, Stock Hims & Hers shows too much volatility to my taste, and with this, comes a high degree of uncertainty.
At first glance, I can understand what makes an attractive investment look like. Telemedicine represents a convincing opportunity at the intersection of health care and technology, and Hims & Hers has certainly proven that it can constantly acquire users and monetize them.
In addition, the prospects that AI present in the health space should not be reduced – further validate the vision of management for long -term growth of Hims & Hers.
Nevertheless, I find it difficult to look beyond the type of behavior of the stock of memes manifested here. Although some investors have certainly earned money by having this stock, I am wary if their profits were triggered by the right reasons. Said differently, I consider that he and his own as more than one stock of swing trading (the timing is everything) as opposed to a good long -term opportunity at this time.
For these reasons, I would transmit it right now. Although I am intrigued by the potential of the company, I think that the actions have increased considerably and would not be surprised to see a certain contraction in the course of action as soon as possible.
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Bank of America is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. Adam Spatacco has positions in palantant technologies. The Motley Fool has positions and recommends Bank of America, Crowdsstrike, Hims & Hers Health and Palant Technologies. The Word’s madman has a Disclosure policy.
