We recently published a list of 15 Stocks That Outperform the S&P 500 Every Year For the Last 3 Years. In this article, we are going to take a look at where Hims & Hers Health, Inc. (NYSE:HIMS) stands against other stocks that outperform the broader market.
Imagine choosing a group of stocks that not only weathered the market’s storm but also outpaced its peers. Clearly, a win. Such is the case of these 15 stocks that delivered returns greater than what the market had to offer over the last three years. Before we get down to those top-tier winners, let’s discuss what the broader market index actually is.
This may not be something new to seasoned investors. As one of the most widely known benchmarks of the United States, the S&P Index is considered the best gauge of notable American equities’ performance and the health of the economy, in general. Covering around 80% of market capitalization, the S&P is a float-weighted index, which means that the market capitalizations of all the companies included are adjusted by the volume of shares available for trading publicly. Since it’s an index, you can’t just invest in it directly, but rather you can invest in one of the many funds that use it as a benchmark and measure the overall performance.
As a research report by Alex Frino and David R. Gallagher stated:
“Over long horizons, index funds tracking the index consistently outperform the majority of actively managed funds, reflecting the efficiency of broad-market exposure.”
This highlights that S&P index funds generally deliver better results than most actively managed funds.
If we look at the 5-year trend for the broader market, the index witnessed a growth of around 105%. While this may be a decent growth rate, it’s not something truly amazing. The stocks in the index tumbled in 2022, mainly owing to the FED’s shift in monetary policy, the Russia-Ukraine war, and lingering post-COVID supply chain disruptions. Even after this period, the trendline is not something that would break records or catch an eye. In a span of 3 years, the stocks have witnessed a growth of 32%, which is just decent in this high-growth world.
From energy, agriculture, and finance to gold mining, automotive, technology, and construction industries, the companies have showcased strong returns in a short period. This is a result of favorable macroeconomic policies for these markets, particularly with Trump back in office. The stocks we have favored are the ones featuring good performance in the past, as well as the ones surrounding optimism in the future. Thus, we can safely say that it’s still not too late to invest in these stocks. As the elders used to say, “The best time to plant a tree was 20 years ago. The second-best time is now.”
Our Methodology
We have taken a list of 15 companies from Finviz and Yahoo Finance that have witnessed a growth rate of more than 32%, witnessed by the S&P index funds, over three years. These companies then have been listed in descending order, from the highest growth to the lowest growth. The trend line has been captured from Google’s latest stock prices, with respect to the returns of the respective shares.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A nurse in a telehealth platform talking with a patient on video call for consultation.
Hims & Hers Health, Inc. (NYSE:HIMS)
3-Year Return as of the Close of March 12: 656%
Hims & Hers Health, Inc. (NYSE:HIMS) is a leading telehealth platform that connects consumers to professional healthcare providers in the USA, UK, and internationally. On a mission to normalize health and wellness challenges, and innovate solutions, the company offers a range of curated prescription and nonprescription health and wellness products and services via its website and mobile application. This California-based company also provides medical consultation and post-consultation support services to enhance the overall well-being of all.
Considering the company’s Q4 financials, HIMS bid farewell to 2024 with 2.2M subscribers, reflecting a year-over-year surge of 45%. On a quarter basis, it welcomed 182K net new subscribers, which ranks as the second highest in a single quarter. The management attributes this growth to the expansion of personalized treatments, from unique form factors and multi-condition treatments to tailored dosages. While the addition of subscribers strengthens the platform in terms of brand loyalty, data insights, product innovation, and clinical experience, it also tells the future.
Hims & Hers Health, Inc. (NYSE:HIMS) recently launched a weight-loss portfolio, which was met with huge success. The offerings, which include oral weight loss and compounded GLP-1 injections, not only increased revenues but also secured the company’s position in entering new specialties and scale. That being said, management expects the revenue through its weight loss segment to be at least $725 million in 2025.
Looking ahead, the company has projected revenues between $2.3 billion and $2.4 billion for the current year, with adjusted EBITDA to expand from $177 million to a range of $270-320 million in 2025. Delivering a return of over 676% in the last three years, Hims & Hers Health, Inc. (NYSE:HIMS) has outperformed the health sector.
Overall, HIMS ranks 2nd on our list of stocks that outperform the broader market. While we acknowledge the potential for HIMS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HIMS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
