Insider buying can provide clues about a stock’s next move. Insiders sell company stock for a variety of reasons. But they only buy stock for one reason – they expect it to go up.
In this report, we are going to highlight some interesting insider buying at Hims & Hers Health Inc (HIMS:US). Hims & Hers Health operates a telehealth platform in the US that connects patients to licensed healthcare professionals. Since its launch in 2017, it has facilitated millions of telehealth consultations for people across the country. The company is listed on the New York Stock Exchange and currently has a market capitalization of $1.66 billion.
Hims & Hers Health Inc: Insider Buying
Our insider transaction data shows that in August, board member David Wells purchased HIMS stock on four occasions. In total, the insider picked up 360,000 shares at prices of between $7.20 and $8.90 per share, spending just under $3 million on the stock.
Mr. Wells – who has served on the board since September 2020 – is considered to be a financial expert. Previously, he served as both Head of Financial Planning & Analysis and CFO of Netflix. Given his background, he is likely to have a good understanding of Hims & Hers’ financials.
What stands out about these recent purchases from Mr. Wells is the size of the transactions. The fact that the insider has spent nearly $3 million of his own capital on shares suggests that he is very confident the stock will move higher in the future. Our Insider Model views his buying activity as bullish.
Strong Revenue Growth
Hims & Hers Health recently posted a strong set of second-quarter results that exceeded guidance.
For the period, revenue was up 69% year on year to $60.7 million with online revenue up 75% to $58.1 million. Meanwhile, the gross margin for the quarter was 78% versus 71% for the second quarter of 2020. Subscriptions at the end of the period totalled 453,000, up from 258,000 a year earlier.
"This was a quarter of very strong execution, as we continued to drive consistent organic revenue growth across our business, from our core categories to the newer mental health services," commented CEO and Co-Founder Andrew Dudum.
On the back of these results, the company increased its full-year 2021 revenue guidance. It now expects revenue to be in the range of $251 million to $255 million. Previously, it was expecting revenue to be in the range of $195 million to $205 million.
In light of these strong quarterly results, we see the insider buying here as a bullish indicator.