$HIMS: Paul Cerro wouldn't trust the CEO to walk his dog. He's still long. Why? | Cedar Grove

Episode Summary

Executive Summary: The conversation centers on Hims & Hers (HIMS) as a cash-pay telehealth platform with a controversial past but potentially durable long-term upside. Paul argues the market overfocuses on GLP-1/peptide headlines and underweights HIMS’s real value: better retention through labs, data, and cross-selling. He remains skeptical of management and execution, but believes valuation can still work if the company scales internationally and improves LTV.

Main Topics: HIMS business model and cash-pay telehealth: Paul explains HIMS as a cash-pay alternative to insurance-based healthcare, arguing it simplifies access, pricing, and distribution while avoiding insurance inefficiencies. GLP-1 compounding boom and collapse: The discussion revisits HIMS’s growth surge from compounded GLP-1 drugs, the FDA shortage loophole, and the later regulatory reversal that ended the compounding party. Retention, labs, and data as the real long-term thesis: Paul says the market is fixated on customer acquisition and product launches, while the real opportunity is using labs and data to keep customers longer and raise LTV. Valuation versus private-market comps: They debate HIMS’s public-market valuation against private-market wearables/data companies like Whoop and Oura, with Paul arguing the market may be underpricing HIMS’s growth path. Management credibility and regulatory risk: A major thread is skepticism toward CEO Andrew Dudum and HIMS’s boundary-pushing behavior, especially after the compounded GLP-1 episode and regulatory scrutiny. Competition from wearables, startups, and big tech/pharmacy incumbents: The hosts compare HIMS with Whoop, Oura, Apple, Amazon, CVS, Walgreens, and smaller peptide startups, debating whether data-rich or well-capitalized players can outcompete HIMS. Near-term earnings and M&A impact: They briefly discuss how the Eucalyptus acquisition, Novo Nordisk partnership, and new business lines could affect the upcoming earnings release and revised guidance.

Key Arguments: Cash-pay telehealth can disrupt the inefficiencies of U.S. insurance-based healthcare by offering flat pricing and simpler access. HIMS’s GLP-1 compounding growth was real but temporary because it depended on a regulatory shortage loophole that eventually closed. The market is overemphasizing product launches and underweighting the more important driver: customer retention through labs, data, and longitudinal care. Better patient data should improve outcomes, reduce churn, increase LTV, and materially improve payback economics. HIMS is already building a broader platform, so labs and cross-sell are not speculative ideas but active initiatives. Private-market valuations for wearables/data companies like Whoop appear rich, implying either those valuations are too high or HIMS is too cheap. Management is talented but untrustworthy; investors should assume they will push boundaries and may only be constrained by regulators. Regulatory reality matters: once the FDA, FTC, SEC, and lawsuits moved against HIMS, the company hit a real boundary check. Competition from smaller, less compliant peptide startups may create short-term pressure, but well-capitalized platforms like HIMS could win if they maintain trust and pricing power. CVS, Walgreens, and similar incumbents are focused on insured pharmacy battles and may not be immediate threats to HIMS’s cash-pay model.

Data Points: HIMS enterprise value: about $7.5 billion to $8 billion - Used during valuation discussion as a rough market value benchmark HIMS share price: about $31 per share - Referenced when discussing current market pricing HIMS 2030 EBITDA target: at least $1.3 billion - Management long-term guidance cited in the discussion HIMS 2026 EBITDA target: a little over $300 million - Used as a shorter-term forecast comparison Implied 2026 EBITDA multiple: ~30x EBITDA - Approximate valuation on near-term EBITDA if using current EV Implied 2030 EBITDA multiple: ~6x EBITDA - Approximate valuation on long-term EBITDA target Eucalyptus acquisition timing: closed as of June 2025 - Expected to affect 2026 revenue and EBITDA guidance Quoted long-term revenue target: $6.5 billion by 2030 - Management long-term top-line guidance mentioned in valuation debate Compounded GLP-1 stock move: $25 to $72 per share - Described as the stock’s run-up during the GLP-1 compounding boom Whoop private valuation: $10 billion - Used as a comp valuation reference for data/wearable businesses Illicit peptide market size: just under $2 billion - Mentioned as the estimated current size before legalization/regulation Compensation add-backs in EBITDA: about $130 million stock comp and $135 million D&A - Raised to highlight how adjusted EBITDA is heavily modified

Pivotal Quotes: "The real play here is the company has not had an issue getting customers. They have had an issue keeping customers." — Paul Serrow: Explaining why retention, labs, and data matter more than headline growth from GLP-1s "Would I trust the CEO to walk my dog or plant sit my cactus? No." — Paul Serrow: Summarizing his skepticism of management credibility despite being bullish on the business "Cash pay alternative is like, you know what? Screw all of that. It’s almost like Walmart everyday low price." — Paul Serrow: Describing why cash-pay telehealth can undercut insurance-driven healthcare pricing

Implications: HIMS could be a durable telehealth/data platform if it improves retention and trust, but the story remains highly sensitive to regulation, management behavior, and execution. Investors should watch whether labs, international expansion, and cross-sell can offset churn and headline-driven volatility.