Hims & Hers Health, Inc. (HIMS) Expects Rising Earnings: Should You Buy?

When Hims & Hers Health, Inc. (HIMS) reports results for the quarter ending September 2024, Wall Street expects a year-over-year profit increase on higher sales. While this widely known consensus outlook is important in assessing the company's earnings position, one important factor that could impact the stock price in the near term is comparing actual results to these estimates.

The earnings report, expected to be released on November 4, 2024, could help the stock move higher if these key numbers come in better than expected. However, if they miss, the stock could decline.

While management's discussion of terms and conditions at the earnings release will largely determine the sustainability of the immediate price change and future earnings expectations, it is worth gaining insight into the chances of a positive EPS surprise.

This company is expected to report quarterly earnings of $0.06 per share in its upcoming report, representing a year-over-year change of +250%.

Revenue is expected to be $382.09 million, up 68.5% from the year-ago quarter.

The consensus EPS estimate for the quarter has remained unchanged over the past 30 days. This essentially reflects the way the covering analysts have collectively reassessed their original estimates over this period.

Investors should keep in mind that the direction of estimate revisions by individual analysts may not always be reflected in the overall change.

Estimate revisions prior to a company's earnings release provide an indication of business conditions for the period in which the results are reported. These insights form the core of our proprietary surprise prediction model – the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The most accurate estimate is a more recent version of the Zacks Consensus EPS estimate. The idea is that analysts who revise their estimates right before an earnings release have the latest information, which could potentially be more accurate than they and others contributing to the consensus had previously predicted.

Thus, a positive or negative Earnings ESP value theoretically indicates the likely deviation of actual earnings from the consensus estimate. However, the predictive power of the model is only significant for positive ESP values.

A positive Earnings ESP is a strong indicator of earnings growth, especially when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP value is not an indication of a loss of profit. Our research shows that stocks with negative Earnings ESP values and/or a Zacks Rank of 4 (Sell) or 5 (Strong Sell) are difficult to predict an earnings beat with any degree of certainty.

For Hims & Hers Health, the Most Accurate Estimate comes in below the Zacks Consensus Estimate, suggesting that analysts have recently become more pessimistic about the company's earnings outlook. This has resulted in an ESP of -11.42%.

On the other hand, the stock currently has a Zacks Rank of #3.

This combination therefore makes it difficult to conclusively predict that Hims & Hers Health will beat the consensus EPS estimate.

Analysts often consider the extent to which a company has been able to meet consensus estimates in the past while calculating their estimates for their future earnings. So it's worth taking a look at the surprise story to assess its influence on the coming number.

For the most recently reported quarter, Hims & Hers Health was expected to report earnings of $0.05 per share when the company actually produced earnings of $0.06, a surprise of +20%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Above- or below-average earnings may not be the sole basis for a stock to rise or fall. Many stocks end up losing ground despite a decline in earnings due to other factors that disappoint investors. Similarly, unforeseen catalysts are helping a number of stocks rise despite a lack of earnings.

However, betting on stocks that are expected to beat earnings expectations increases the chances of success. For this reason, it's worth checking a company's Earnings ESP and Zacks Rank before its quarterly release. Make sure to use our Earnings ESP filter to find the best stocks to buy or sell before they are reported.

Hims & Hers Health doesn't appear to be a compelling candidate for earnings growth. However, investors should also consider other factors to bet on this stock or stay away from it before its earnings release.

Among stocks in the Zacks Medical Info Systems industry, GE HealthCare Technologies (GEHC) is expected to report earnings of $1.06 per share for the quarter ending September 2024. This estimate suggests a change of +7.1% year-over-year. Revenue is expected to be $4.86 billion this quarter, up 0.9% from the year-ago quarter.

The consensus EPS estimate for GE HealthCare has remained unchanged over the past 30 days. However, a higher most accurate estimate has resulted in an Earnings ESP of 0.27%.

This Earnings ESP combined with its Zacks Rank #3 (Hold) suggests that GE HealthCare will most likely beat the consensus EPS estimate. Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Stay on top of upcoming earnings releases with the Zacks Earnings Calendar.

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Hims & Hers Health, Inc. (HIMS): Free stock analysis report

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