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Hims and Hers. Equity Research! Part 2/3
Welcome to Part 2 of my Hims and Hers Deep Dive!
In Part 1, I explored their business model, GLP1 shortage, and subscriber statistics! I recommend people give it a read before continuing further!
In today’s article, we will explore Hims and Hers management, competitors, and risks.
Additionally, an analysis of Hims moats will be provided!
Let’s take a look!
1. Management
2. Competitors
3. Moats
4. Risks
5. Part 3
1. Management
Hims is led by one of the co-founders, the 37-year-old San Francisco native, Andrew Dudum. After graduating from the Wharton School at the University of Pennsylvania with a degree in Management and Economics, Andrew worked in the venture capital industry.
As Dudum doesn’t have any medical education, he has hired a team of medical professionals that are led by Dr. Pat Carrol, a Dartmouth-educated doctor with decades of experience.
It is important that the management is fairly compensated so they are motivated to grow the company for the benefit of the shareholders. At the same time, often managers of some fast-growing start-ups are grossly overpaid.
Dudum owns an estimated 15.2% of Hims, valued at around $900M, so he is heavily incentivized to grow the company!
For his work as CEO, in 2020 he was granted 3.25M shares that vested when Hims share price hit $22.99. Additionally, he was granted 1.62M shares that vested when Hims share price reached $38.31. His compensation was around $131M at today’s share price. In 2022, he was awarded an additional 2M shares that have yet to be issued.
Looking at his compensation, while it is high, I find it to be reasonable considering the returns Hims has delivered to shareholders.
However, it seems his compensation is entirely based on the stock price. I would prefer if there were some operational milestones as well, such as subscriber numbers, EPS, FCF, and others.