Thinking to short Hims Hers (USA Stocks:HIMS) based on its current debt commitments?

The stock is currently undergoing above-average trading activities. Hims Hers Sales per Share is comparatively stable at the moment as compared to the past year. Hims Hers reported Sales per Share of 1.31 in 2022. Tangible Assets Book Value per Share is likely to gain to 1.70 in 2023, whereas Earnings Before Interest Taxes and Depreciation Amortization EBITDA are likely to drop (102.2 M) in 2023. Although many aggressive traders are getting into consumer defensive space, Hims Hers Health may or may not be your first choice. Let's try to break down if Hims Hers shares are reasonably priced going into March.
Published over a year ago
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Reviewed by Raphi Shpitalnik

This firm currently holds 4.81 M in liabilities with Debt to Equity (D/E) ratio of 0.02, which may suggest the firm is not taking enough advantage from borrowing.
On a scale of 0 to 100, Hims Hers holds a performance score of 16. The company retains a Market Volatility (i.e., Beta) of 2.03, which attests to a somewhat significant risk relative to the market. Let's try to break down what Hims Hers's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Hims Hers will likely underperform. Although it is vital to follow Hims Hers Health current price history, it is good to be conservative about what you can do with the information regarding equity current price movements. The philosophy towards determining future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. We have found twenty-one technical indicators for Hims Hers Health, which you can use to evaluate the performance of the firm. Please utilizes Hims Hers coefficient of variation, treynor ratio, as well as the relationship between the Treynor Ratio and semi variance to make a quick decision on whether Hims Hers Health current trending patterns will revert.
Hims Hers financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Hims Hers, including all of Hims Hers's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Hims Hers assets, the company is considered highly leveraged. Understanding the composition and structure of overall Hims Hers debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Hims Total Liabilities

Hims Hers Health liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Hims Hers Health has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Hims Hers balance sheet include debt obligations and money owed to different Hims Hers vendors, workers, and loan providers. Below is the chart of Hims short long-term liabilities accounts currently reported on its balance sheet.
You can use Hims Hers Health financial leverage analysis tool to get a better grip on understanding its financial position

How important is Hims Hers's Liquidity

Hims Hers financial leverage refers to using borrowed capital as a funding source to finance Hims Hers Health ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Hims Hers financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Hims Hers' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Hims Hers' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Hims Hers's total debt and its cash.

Breaking it down

The company reported the previous year's revenue of 271.88 M. Net Loss for the year was (107.66 M) with profit before overhead, payroll, taxes, and interest of 204.49 M.

Asset Breakdown

187 M
Assets Non Current
169.7 M
Goodwill
250.7 M
Current Assets
Total Assets521.86 Million
Current Assets250.71 Million
Assets Non Current186.96 Million
Goodwill169.7 Million

Our take on today Hims Hers gain

Newest coefficient of variation is at 377.36. Hims Hers Health shows above-average downside volatility for the selected time horizon. We advise investors to inspect Hims Hers Health further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Hims Hers future alpha. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Hims Hers' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Hims Hers' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Takeaway on Hims Hers Investment

Whereas some other firms under the household & personal products industry are still a bit expensive, Hims Hers may offer a potential longer-term growth to private investors. To conclude, as of the 11th of February 2023, our research shows that Hims Hers is a rather somewhat reliable investment opportunity with a below average chance of bankruptcy in the next two years. From a slightly different view, the entity currently appears to be overvalued. However, our primary 90 days buy vs. sell advice on the firm is Buy.

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Editorial Staff

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