It has also been difficult for me to comprehend… and also difficult to comprehend how the cash and debt figures should be read (i.e., in which figures the bond money is included)
I was horrified by that billion and tried once again to dig for an answer to the long-standing question of how much Zava paid
I decided to ask ChatGPT to look at what the q3 10-Q says, and it thought the estimated final purchase price would be around $258M
Ultimately, what was actually gained with that money is more significant than the purchase price; that’s what matters. At least now it looks good, because the additional purchase price was increased in accounting, meaning Zava’s performance has met or exceeded targets.
PS. Regarding share repurchases, a small detail caught my eye when comparing the q3 10-Q and the announcement of the new 250M program: according to the 10-Q, about 55.5M was still unused from the old 100M program, but now it had been used, which is quite an impressive sprint at this point. Apparently, there has been selling pressure, but looking at the average daily trading volume, the amount purchased probably doesn’t feel like much.
Sometimes it’s good to get a bit more negative views on one’s investments, and I came across a quite interesting video by Daniel Pronk on YouTube:
I timestamped the video to the point where Daniel talks about HIMS for over 10 minutes. I occasionally watch Daniel’s videos, and he seems like a sensible guy. Here are a few interesting observations from the video, in my opinion:
Daniel was involved with HIMS from December 2024 - June 2025.
The reason for selling was that, in his opinion, HIMS’s fundamentals seemed to be eroding, and the stock was outside his area of expertise.
Daniel goes through HIMS’s Q3 report in the video, from which he makes a few observations.
At first glance, the report looks good from the perspective of YoY revenue growth, subscriber growth, and operating cash flow growth.
Based on the Q4 guidance, YoY revenue growth is expected to drop to 26-30%, so growth is clearly slowing down.
The first red flag, however, is the current FY 2025 revenue guidance. At the beginning of the year, HIMS guided for 2.3-2.4 billion in revenue for this year. However, according to Daniel, this revenue guidance did not include acquisitions, and HIMS has made 2 acquisitions this year, e.g., Zava, which should bring in about 50 million in revenue for FY 2025. The current FY 2025 revenue guidance, i.e., 2.34-2.36 billion, thus includes ~50 million in revenue from the Zava acquisition. Without this acquisition, HIMS would therefore likely not reach the revenue guidance given at the beginning of the year, or would only reach the very bottom end of it.
In Daniel’s opinion, the company does not communicate this clearly enough to investors. At the same time, he argues that HIMS’s CEO (Dudum) does not always seem completely transparent in terms of communication. He wants management to communicate clearly both good and bad things, as well as business risks.
As an example, Zeta Global clearly communicates the impact of acquisitions on guidance.
Also, subscriber growth appears to be slowing down radically, see image below.
By comparing gross revenue and marketing expenses, it can be seen that the cost of customer acquisition has grown radically.
This is also visible in the graph below, where in recent quarters, marketing expenses relative to new subscribers have exploded, and this is not a good direction.
The Q3 report also contained no indication from which revenue without GLP-1 drugs could be calculated, unlike in previous quarters. Although this was not done very transparently before, enough information was given to investors to calculate it. Daniel also argues that this is a red flag when transparency in business and core business has been reduced.
Daniel argues that if there were a good reason for this, it should have been communicated better. It is likely not disclosed because HIMS’s core business is not growing at the moment.
I recommend that all interested parties watch the video themselves; it contained a lot of good points, in my opinion. Of course, practically all the above points have been mentioned more or less earlier in this thread, but still.
HIMS is my largest single investment in my portfolio, and even with the current stock price situation, it is solidly in the black. I do like the company, and I believe the company’s management is doing many good and essential things for the growth story, and I believe there is plenty of growth potential far into the future. At the same time, I agree with Daniel that slowing growth / eroding fundamentals combined with management’s increasingly less transparent communication and reporting does not inspire much confidence in the management.
The reasons that come to mind for the slowdown in growth during the mentioned period are the end of GLP copying and whether the Novo collaboration even had time to start and end. These must have an impact. New released products and the decreased share price make me stay as an owner.
and tried once again to dig for an answer to the long-standing question of how much Zava paid
