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I keep seeing HIMS argued like it is one business. For value, I think you have to split it in your head.
There is a real cash pay subscription platform underneath the headlines. Hair, ED, derm, mental health. Recurring revenue, low insurance complexity, brand and distribution that actually exist. That is the asset.
Then there is the GLP1 compounding era. A national funnel built around a regulatory perimeter that was never meant to support mass market distribution at scale. If you are a value buyer, you do not have to debate the politics of compounding. You have to decide whether you are willing to underwrite a business that just learned what happens when a revenue line sits on the edge of enforcement posture.
So the value question becomes this: what is Business A worth as a standalone if Business B shrinks hard or goes close to zero.
The reason I start there is unit economics. Subscriber growth is not the point if the economics under each subscriber drift the wrong way. You do not need subs to collapse to get a permanent rerate. You just need the platform to get more expensive to grow.
From public reporting I have seen cited in the filings and earnings materials, non GLP ARPU dropped from roughly $60 to $55 in a single quarter in Q2 2025. Blended ARPU fell from roughly $84 to $74 over the same period. Marketing spend was about $218M in Q2 2025 against roughly 73,000 net new subs, which is about $3,000 per marginal add. Gross margin moved from roughly 82% in FY2023 to roughly 74% by Q3 2025. Mix and fulfillment complexity doing what they always do to high margin platform narratives.
None of that says the core is worthless. It says the core needs to prove it can acquire and retain profitably when headlines are negative and CAC wants to rise. If you are underwriting owner earnings, this matters more than vibes about subscriber count.
Now the part value investors cannot ignore: the capital structure clock.
HIMS has about $1B in zero coupon convertible notes due May 2030 with a conversion price around $70.67. With the stock far below that, those notes behave like cash debt, not equity dilution. The company has reported about $1.1B cash. In a clean scenario with roughly $300M a year free cash flow, you can tell a story where the maturity is manageable. In a downside scenario where free cash flow compresses into the $100M to $150M range, the same maturity turns into an overhang that forces capital allocation decisions you might not like as an equity holder. It is not bankruptcy math today. It is a future constraint that raises your required discount rate right now.
Governance is the other value filter. HIMS is effectively controlled by the CEO through a dual class structure. Class A gets one vote. Class V gets 175 votes. Roughly 88% of voting power sits with the controller group. That does not make the business bad. It changes what you can assume about course correction. Concentrated control makes outcomes more binary. When it works, it is fast. When it does not, there is no one to pull the brake.
So where do I land as a value lens, not a trade.
I am not interested in valuing GLP1 growth stories or debating regulatory optics. I am interested in whether the core subscription platform has durable owner earnings at a normalized CAC, and what multiple it deserves when you haircut the growth narrative and price in a higher risk premium from control structure and legal overhang.
If you are bullish from a value angle, the clean way to argue it is not that the company has millions of subscribers. It is that the core can sustain a stable contribution margin per subscriber after a year of negative headlines, and that normalized free cash flow can cover reinvestment needs while keeping the 2030 maturity non disruptive.
One question for value people here: if you assume GLP1 revenue contribution goes close to zero and CAC stays higher than the pre headline period, what do you think normalized free cash flow looks like for the core, and what multiple would you pay for that given the 88% control structure and the 2030 maturity constraint.
Disclosure: no position. Public info only. Not investment advice.