Could this stock 10X?

Assalamu alaikum everyone. I hope you are doing well. Today I'm going to talk about a stock that I mentioned in passing in the last life, and I would like to do a deep dive into it, especially considering that I have revealed that it was added to our PIF portfolio at the beginning of May, the 100 that we got in at a really attractive price considering that when we first bought there was less than $12. Now it's north of 20 and just one month. So I'd like to go over the merits of this company and see whether or not there is a potential 10x in this company. So without further ado, let's get started. This is not financial advice, so be sure to do your own due diligence before making any investing decisions. And before I get started, if you don't mind, please do leave a like. It means a lot to me. It helps out the channel a lot. More people will get a chance to see this video and the more likes the video gets. So do leave a like if you would be so kind. Now, if you try to envision the future of health care, what do you think of? Well, I can tell you myself. I think that's up of the future health care as being personalized. So something that is specific to me as a customer or a patient, because every every two people are not going to be identical in their needs and what they aspire to. And so having personalized treatment makes a lot of sense. I also see it as being convenient, something that is low cost both in terms of time and in terms of monetary expense. And so the field of health care as of now has been rather modest in terms of the innovations that it has brought. We have seen the delivery of almost every other service or good evolve substantially in the digital era where basically for every service, there is a digital version that you have access to. Basically accept health care. We haven't really seen much evolution. Most of the time when you need, you have to actually physically go to the health care provider. The process is very lengthy, especially in the United States. It's very expensive. It takes a lot of time and effort to do. And so, you know, it takes a lot of time and effort to do. The field is basically ripe for innovation. A lot of companies have tried to innovate, but they really haven't been successful. Nothing has really caught on. Enter HIMS. And HIMS is a basically digital health care provider. Their mission is to make healthy and happy, easy to achieve. Now, the way they do this, their model, it's pretty simple. So they have integrated infrastructure that makes it easy for patients with chronic conditions to access health care and receive personalized treatment. So from starting with automated pharmacies on one end and customers accessing their app or website on the other, they have a basically a virtual experience for health care. So they have an app and a website that connects patients with practitioners and includes pharmacy facilities that can quickly create personalized medicines. So they're vertically integrated from end to end in the health care delivery process, which I think was the error that other telehealth companies made when they attempted to introduce their products. They tried to build their products on top of existing infrastructure, on top of existing clinics, hospitals, pharmacies. And that didn't work. But with HIMS, they basically started from scratch and owned the process from start to finish. And that is, I think, what has enabled it to have different results than other experiments. And they've experienced robust growth. So if you look at their most recent earnings report, they grew subscribers, 41% in Q1 of 24 compared to Q1 of 23. They also grew revenues, 46%. So they're actually in terms of the dollars spent per customer, which makes sense because they're adding more and more products all the time. And it also indicates that their retention of customers has been quite good. Their growth in revenue hasn't come at the expense of their margin, which is always good to see. So they're not spending more money for every additional customer they acquire. Their cost of customer acquisition has remained and actually improved with time and their gross margins have remained at a healthy 80% plus margin, which is basically top tier in terms of gross margins. So you have robust growth at the very attractive margins. And that's really what you look for as an investor. Their cash flows have been positive. So they're generating cash. And what I like to see, especially for gross stories, is aggressive investment back into the company. And this is what HIMS is doing. So you can see that the purchase of property, equipment, intangible assets is increasing quarter after quarter, as well as their investment into the website and software. So last quarter, that was close to 13 million. So of the 25 million that their operations generated 13 of that or close to 14 was spent on reinvested into the business. So they ended up with free cash flow of 11 million. And that number is increasing their investment. Their reinvestment into the business is increasing all the time, which means that this company will likely not plateau anytime soon. Especially considering all the growth opportunities that lie ahead of it. And they expect continued growth. They guided for a continued growth for this year to the tune of 38 to 41% on their top line. So revenue growing at 41%. And their margins remaining at the 10, 11% level. Now, this has some additional color around these numbers. So they have 85% long term retention, expanding portfolio of personalized offerings. And we'll talk about those in a second. They basically their payback period for every one customer. So the amount they spend to acquire one customer, they get that money back within less than one year. Their payback period is less than one year. And as they grow and more and more customers use them in word of mouth spreads their marketing efficiency is going to become greater as well. There are abundant growth opportunities for him and hers. So you look at healthcare in the United States around 25% of overall GDP. So you're talking about an industry that's in the trillions and there's no shortage of verticals that him and hers can add to its business. And they've become quite adept and good and skilled at adding additional verticals to their business. So whereas they started out with ED medication and men's dermatology, they've added women's dermatology, mental health, weight loss, most recently. And each one of these, the company is expecting to will add 100 million plus in 2025. So so many different avenues to to grow through for this company. And in terms of moat, so we have a big company or we have an opportunity here what's to prevent other people from coming in and competing. Well, they do have a chance at a strong moat through the data that they collect about their customers and personalizing the treatment based on this data for its customer and customers. And then improving their algorithm for personalization, the more data that they get. So if you look at the percentage growth in subscribers opting for a personalized product, that percentage growth was actually a greater than their percentage growth of revenue. It was actually 176% Q1 in Q1 of 2024 compared to Q1 of 2023. So the personalization can be a moat. The more data company has about you, the more personalization. This company is able to offer you the less likely you are to switch from that company to a different provider. The more sticky the company's product becomes and the wider the moat around the business. And there is a possible AI flywheel here, which I alluded to were in as they become more efficient at manufacturing the their medications. Hymns can treat an increasing range of conditions for a price that is below the out of pocket spend for other providers. As physicians as as him successfully treats more conditions, it can attract more and better doctors. And as Hymns continues to scale, it can capture more data which can be used to train AI models and these models make patient outcomes better. Per every dollar that is invested in them. So there's a real opportunity here. I know AI is the buzzword in the markets nowadays. There's a real opportunity for real integration of AI into their business model. And the flywheel that comes from that the positive flywheel that comes from that could really enhance the moat that the business has. The company is founder led and founder led companies typically have a statistically significant outperformance compared to non founder led companies. So that's another bonus, but if you look at their execution, it's been a flawless. So aside from the statistics, the positive statistics, statistics related to founder led companies, if you just look at their execution, it's been quite good. And their strategies sound. So they have built their strategy on organic growth, being their primary growth driver, which makes their marketing spend less maintaining a payback period of less than one year, focusing on investments that drive long term margin They've invested in durable long growth channels and they've introduced some share repurchasing. I don't really think that share repurchasing 50 million is going to move the needle that much now that they're knocking on the door of 5 billion market cap. But it is a good indication for the company that management is thinking about that and thinking about basically reinvesting in itself. Now, the to build on the matter of execution, their market share has been increasing over time. So if you look at hymns and hers health, that's the darker purple towards the bottom of these graphs. You look at the share of observed total customers and share of new observed customers between primary telehealth providers. You can see that they've really been eating their competitors lunch, whether that's better help, neurology, 30 medicine or Roman health. No one has really been able to increase their market share the way that hymns and hers has. And then it's always good to see insider insiders buying the company because really when you're investing, you want to have an edge and you can't really have insider information. However, you can follow what insiders are doing and insiders have an edge in terms of the information that they have. And so it's always good to see insiders buying. And recently a board member, Christopher Payne has bought close to 2 million of hymns shares at $17.74. So this is a very good sign. Now, in conclusion, the healthcare pharmaceutical business is ripe for innovation. There's growth opportunities everywhere. As I mentioned, healthcare in the United States close to a quarter of GDP. At this point, hymns and hers has a proven business model is generating positive free cash flow. So even after reinvestment, they've management has proven itself to be competent and to move in a very methodical and calculated way. Cash flow is positive with aggressive reinvestments. And so the company is not looking to plateau. It's looking to continue its aggressive growth. And the combination of digital front door and automated back end engenders a highly defensible operation. If the data is used to create this flywheel of personalization and AI improving that personalization over time. I really think it could be the next CVS or Walgreens. And for those who are unfamiliar, CVS has a market cap of close to 70 billion. It's by far the most popular pharmacy here in the United States. Walgreens has a market cap of between 15 and 20 billion. Again, hymns and hers here is close to 4 billion going on 5 billion. So there's a lot of growth here. So I definitely think that there is opportunity for a 10x in this company. It depends on their execution. Obviously there will be hiccups along along the way, especially when you're dealing with medicines and providing those to consumers. There's going to be periods where something doesn't work out. Someone has a bad experience. Maybe you get a pullback in the stock then. And those may be good buying opportunities for new investors. If you do want to follow when we buy, when we sell, when we do them, move, remove, then do become a PI of number and join our community of highly conscious investors seeking to do good and do well. And so with that, let's go to some questions. Can you make a video on active versus passing investing from a share compliance perspective? Well, I'll say that, you know, the only thing in terms of share compliance that is relevant here is when you're passively investing, you do want to check every now and then to make sure that what you have invested in is still share that compliant. So that's from a share compliance perspective. So, whereas with active, I mean, you're already active, you're already constantly checking your positions. HIMS is currently slightly above 20. Is there any transfer to go back to 13 in the near future so that those who missed it can enter? Of course, there is a chance, you know, never say never, and especially with companies that are dealing with health care and medicines. As I mentioned, there can be a lot of volatility there. I do think part of their move has been shorts getting burned, which I like to see, especially because a lot of them were politically motivated, I believe. And so there's opportunity here, but there's nothing guaranteed, obviously. I've noticed that the share compliance of many stocks change so frequently that it seems to me that Halal investing is more about actively managing your portfolio rather than passively. Yeah, so there is some truth to that, right? You have to be at least somewhat active in order to verify that the positions you have maintained their comfort level from a Halal perspective. So I'm not a good brother. I'm sad. How is this not financial advice? Are you not influencing brothers and sisters to purchase? You are a source of knowledge online. I like him. I'm brother. It's not financial advice because I'm telling you what I'm doing. This is for informational purposes. Only I'm not advising anyone to buy anything. I'm just telling you what I'm thinking and you can do with that. What you wish. This could also mean selling in the right side. All right, so we do have a lot of questions, so I'm going to go to the next person. XLM could hit 4X, probably 7X, okay? Hit the like and subscribe box. Hello, thank you for saying that. Thoughts on lithium discovery today is a bullish for PLL. InshaAllah will have a PLL and lithium industry update soon inshaAllah. I hope you enjoyed this video. As mentioned, do become a PIF member. If you aren't already, leave a like and subscribe. And until next time, take care of yourself. Same alaikum and peace be upon you all.