Hims Hers Health Inc (HIMS)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 81.99% | 77.57% | 75.22% | 73.58% | 54.03% |
| Operating profit margin | -3.38% | -13.04% | -42.31% | -10.18% | -90.14% |
| Pretax margin | -2.47% | -12.47% | -40.75% | -12.09% | -87.18% |
| Net profit margin | -2.70% | -12.46% | -39.60% | -12.18% | -87.29% |
Over the past five years, Hims Hers Health Inc has shown a consistent improvement in its gross profit margin, reflecting its ability to effectively manage its cost of goods sold and generate higher revenues relative to costs. This trend indicates that the company has been able to maintain strong pricing power and efficiently control its production and distribution costs.
However, the operating profit margin of the company has been negative in most years, indicating that its operating expenses, including sales, general, and administrative costs, have been relatively high compared to its revenue. This suggests that the company may need to focus on optimizing its operational efficiency and cost structure to enhance its profitability from core business activities.
Similarly, the pretax and net profit margins have also been negative over the years, highlighting that expenses beyond operating costs, such as interest and taxes, have further impacted the company's overall profitability. The negative pretax and net profit margins indicate that the company has been operating at a loss, which may be attributed to higher non-operating expenses or one-time charges incurred during the period.
In conclusion, while Hims Hers Health Inc has successfully improved its gross profit margin over the years, its negative operating, pretax, and net profit margins suggest that the company needs to continue working on optimizing its operational efficiency and controlling its overall expenses to achieve sustainable profitability in the long run.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -6.68% | -18.75% | -27.35% | -12.76% | -36.34% |
| Return on assets (ROA) | -5.34% | -17.93% | -25.60% | -15.26% | -35.19% |
| Return on total capital | -8.56% | -22.04% | -33.11% | — | — |
| Return on equity (ROE) | -6.84% | -21.07% | -32.17% | — | — |
Hims Hers Health Inc's profitability ratios have shown a mixed performance over the past five years.
1. Operating Return on Assets (Operating ROA): This ratio measures the company's operating income generated relative to its total assets. The negative trend in Operating ROA from -6.68% in 2023 to -36.34% in 2019 indicates decreasing operational efficiency and profitability in utilizing the company's assets for operations.
2. Return on Assets (ROA): ROA provides insight into the company's overall ability to generate profits from its assets. Hims Hers Health Inc's ROA has also displayed a downward trend, ranging from -5.34% in 2023 to -35.19% in 2019. This indicates a consistent challenge in generating profits relative to the total assets employed.
3. Return on Total Capital: This ratio reveals the company's ability to generate returns from both equity and debt capital invested. The negative trends in this ratio, with figures of -8.56% in 2023, -22.04% in 2022, and -33.11% in 2021, show a consistent struggle in generating satisfactory returns on its total capital.
4. Return on Equity (ROE): ROE measures the return generated on shareholders' equity, and Hims Hers Health Inc's ROE has also experienced a decreasing trend from -6.84% in 2023 to -32.17% in 2021. This indicates a decline in the company's ability to generate profits for shareholders relative to their equity investment.
In summary, Hims Hers Health Inc has faced challenges in generating profits efficiently from its assets, total capital, and equity over the past five years. Continuous monitoring and strategic adjustments may be necessary to improve profitability and enhance shareholder value.