Hims Hers Health Inc (HIMS)
Interest coverage
| 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 | 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 |
| Interest expense (ttm) | US$ in thousands | 1,582 | 1,582 | 1,582 | 3,164 | 4,169 | 5,746 | 6,390 | 6,010 | 3,423 | 1,846 | 1,202 | 0 | 0 | 0 | 0 | 10 | 43 | 43 | 43 |
| Interest coverage | 27.12 | 7.57 | -5.24 | -9.31 | -9.75 | -9.06 | -9.87 | -11.43 | -25.81 | -47.38 | -63.56 | — | — | — | — | -1,797.70 | -302.70 | -177.35 | -155.79 |
September 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $42,907K ÷ $1,582K
= 27.12
The interest coverage ratio for Hims Hers Health Inc has fluctuated significantly over the past few quarters. In the most recent quarter, as of September 30, 2024, the interest coverage ratio stood at a healthy 27.12, indicating that the company is generating ample earnings to cover its interest expenses.
However, looking back at previous quarters, there are instances where the interest coverage ratio was negative, notably in March 2024 (-5.24), December 2023 (-9.31), and September 2023 (-9.75). These negative ratios suggest that the company's earnings were insufficient to cover its interest obligations during those periods.
It is important to note the severe decline in the interest coverage ratio in the third and fourth quarters of 2020, with ratios of -1,797.70 and -302.70 respectively. Such extremely negative ratios are a cause for concern as they indicate a significant inability to meet interest payments from operating earnings.
Overall, the recent improvement in the interest coverage ratio is a positive sign, but stakeholders should closely monitor the company's financial performance and its ability to generate sustainable earnings to cover its interest costs in the future.