Hims Hers Health Inc (HIMS)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 61,903 | 42,907 | 11,979 | -8,287 | -29,453 | -40,658 | -52,087 | -63,041 | -68,697 | -88,340 | -87,471 | -76,400 | -110,795 | -84,752 | -71,478 | -63,303 | -17,977 | -13,016 | -7,626 | -6,699 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 476,716 | 440,051 | 361,966 | 344,482 | 344,029 | 328,562 | 320,071 | 312,745 | 311,741 | 310,946 | 319,059 | 327,715 | 334,619 | 355,153 | 293,054 | 292,466 | -146,874 | -143,341 | -138,949 | -139,953 |
| Return on total capital | 12.99% | 9.75% | 3.31% | -2.41% | -8.56% | -12.37% | -16.27% | -20.16% | -22.04% | -28.41% | -27.42% | -23.31% | -33.11% | -23.86% | -24.39% | -21.64% | — | — | — | — |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $61,903K ÷ ($—K + $476,716K)
= 12.99%
Return on total capital is a critical financial ratio that indicates the percentage of profit a company generates relative to the total capital employed in the business. For Hims Hers Health Inc, the return on total capital has fluctuated significantly over the past few years.
From March 31, 2021, to December 31, 2024, the company experienced negative returns on total capital, indicating that it was not effectively utilizing its capital to generate profits during this period. The ratio steadily decreased from -21.64% in March 2021 to -8.56% in December 2023 before showing signs of improvement.
In the following quarters, starting from March 31, 2024, Hims Hers Health Inc began to demonstrate positive returns on total capital, indicating a reversal in its profitability trend. The company's return on total capital moved from a low of -2.41% in March 2024 to a promising 12.99% by December 31, 2024, showing a significant increase in its profitability relative to its total capital employed.
This improvement suggests that Hims Hers Health Inc may have implemented strategic measures to enhance operational efficiency and profitability, leading to a more effective utilization of its capital resources to generate returns for its stakeholders.
Peer comparison
Dec 31, 2024