L.A. STEVENS
@LA_stevens_
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Actionable investment ideas in software, FinTech, AI/data infrastructure, & consumer discretionary. Official buy/sell ratings in link below. Subscribe for free.
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@algoflows
It’s all genetics, like 90%
No progress till we’re doing mysql injections into human code
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$PLTR's absolutely pristine balance sheet, with $3.1B in cash and no long term debt.
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$HIMS pulled its 2025 guidance a year forward
That is, what it guided to for 2025 it will actually achieve in 2024
*All without GLP-1s*
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$HIMS stock prices always follow free cash flow per share over time
No exceptions
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The central takeaway from this call on weight loss and GLP-1s (final post for the night):
1) $HIMS can offer branded $NVO $LLY should shortages totally end. It is, after all, just a nat'l scale AI-orchestrated general physician
2) If the tens of millions of consumers who cannot
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$HIMS purchased a 503B FDA compounding pharmacy
No more hntrbrook bear thesis related to BPI labs
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I genuinely don't want to be bearish. I only want to be objective
I own $PLTR in the single digits
But folks are saying stuff like "PLTR is the modern operating system for the enterprise, & no one knows"
Mate, the stock is trading at 30x sales on 20% growth
Everyone knows 😅
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On an annualized free cash flow basis, $HIMS now trades at 17.9x EV/fcf, growing 52%
Wild stuff here
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"What growth co. can you buy if not $CRWD?"
What you can buy:
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Important info for $HIMS investors
In the months/quarters ahead, you should expect short reports/potentially negative news flow for the company
Presently
@capitolforums
's Mike Williams is reaching out to former HIMS practitioners w/ what appears to be an intention to
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$HIMS bought back about ~$30M worth of stock
$204M in cash left on balance sheet; $0 debt
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$SE, at this point, is really as simple:
1. All three lines of business are growing
2. All three lines of business will be fcf generative by year end
3. Shopee is not only sustaining market share but also capturing it
All systems go for 2024
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$SNOW SBC is obviously an issue, and it needs to be addressed, but the stock isn't declining because of SBC
It's declining because it's been overvalued relative to its free cash flow per share generation for years now
That's it. That's the extent of it. It had a great quarter.
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To conclude all the $SE coverage this morning:
1) Brilliant report, with great growth across all segments and a huge beat on ecom GMV + revised guidance to mid 20% GMV growth in 2024 (up from high teens growth guidance previously)
2) In the comments below, I'll share my past
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$HIMS completed its $50M share repurchase program
Board authorized a new $100M program
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Former president and COO of the GLP-1 producer Novo Nordisk $NVO joins the board of $HIMS
“Mr. Schultz spent over 25 years at Novo Nordisk, where he served in many capacities, most notably as President and COO as the company established itself as a leading company in diabetes
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Ironically, GLP-1s have been net bearish for $HIMS
Without GLP-1s, HIMS just did $47.6M in fcf. $200M annualized, and grew ~45%
The stock is clearly undervalued based on its legacy products alone, ex GLP-1s
But, with the GLP-1 uncertainty overhang, the market is likely
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$HIMS partner for sourcing GLP-1s (BPI) is a 503B (more stringent than 503A) federally regulated compounding pharmacy
HIMS selected this company from a list provided to it by the federal government/FDA itself.
503B pharmacies must be federally registered and experience heavy
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So what's the market's perspective on $HIMS here?
180M obese folks in the U.S.
$1200-$2400/yr for GLP-1s on HIMS.
40-50% struggle to afford GLP-1s; certain insurers are dropping coverage due to cost analysis
So HIMS nets just 1/180M and does $1.2B-$2.4B in sales from just
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$SNOW may be the cheapest software name adjusting for NRR/sales growth/fcf margin
NRR at 128%, sales growth of 32%, and fcf margin in Q1'24 was 39%
In any other market environment, investors would be tripping over themselves to buy this 99th percentile performance at SNOW's
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Worth noting that the $HIMS thesis never hinged & still does not hinge on the success of its GLP-1 business
The GLP-1 business is just a mind-blowing serendipity where it could add millions of profitable subs by the end of the year
Importantly, the market is still not pricing
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$HIMS weight loss program reached $100M in 6-7 months w/o GLP-1s
HIMS has offered branded viagra, generic viagra, customized compounds
It will be the same for GLP-1s over time + legacy HIMS weight loss program that grew to $100M in 6-7 months (fastest new product growth ever)
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There's nothing the bears can nitpick in the $SE report
Extremely strong Shopee Q adjusting for seasonality & Shopee burned essentially no cash
Extremely strong Garena Q w/ active and paying users stronger than they've been in many quarters
Extremely strong SeaMoney Q w/
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$ADYEY is cruising towards a lost half decade
Despite more than 3x'ing its gross profit since since the beginning of 2020, the stock has not materially moved from its levels during that time
There have been a few notable instances of this where the companies have sustained
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It required $SHOP ~15 years to reach $200M in annual free cash flow
$HIMS will very likely generate ~$200M in fcf in its 7th year of operation while growing at over 50%
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$HIMS has consistently underpromised and overdelivered for nearly four years now as a public co.; meanwhile, the market has been very negative on the company for that same period of time.
So... at some point, we have to start asking: Who should we trust? The market's negative
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$HIMS selling off on news that it raised guidance for 2024 by 11%
Like I said, Fed '21 to June '22, the stock sold off from $24/share to $3/share on nothing but flawless reports
There's absolutely no rhyme or reason to the stock's price action
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$HIMS In 2021, sales & marketing was 66% of gross profit.
In 2022, it was 66% of gross profit.
In 2023, it was 62% of gross profit.
In Q4 2023, it was 61.7% of gross profit.
In Q1 2024, it was 57% of gross profit.
This improving efficiency has resulted in the linearly
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$HIMS has a pretty stacked board. Notable members:
Former $NFLX CFO David Wells, joined Sept. 2020
Former $MTCH Tinder CEO Christopher Payne, joined March 2024
Former President and COO of $NVO Kåre Schultz, joined July 2024
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Tomorrow, I will release my $HIMS Q2'24 review note
In response to requests for a primer on Hims, this note is a comprehensive assessment of the business, including a historic account of the company dating back to Andrew Dudum's time at UPenn, as well as a review of its Q2'24
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I’ll be providing a bunch of analysis on the $SE quarter today
I’ll say that at first glance, it looks just as great as Q3 2023
1. GMV in hypergrowth
2. Free cash flow positive overall
3. Hulking cash hoarding that grew to $8.5B
4. Huge fcf from Garena, the top line of which
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I’ve already shared my frameworks for thinking about $HIMS ad nauseam and in devoted research notes. Latest $LLY news doesn’t change anything about the thesis.
$LLY launching a one to one competitor with $HIMS while selling its GLP-1s at a premium to HIMS’ compounded offerings
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$HIMS generated $47.6M in free cash flow in the quarter, which was fantastic
Now at ~$200M/yr annualized even with the elevated investment in its vertically integrated pharmacies
Nothing about this report was bad. All systems go still
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$SE is now up 66% since my buy rating on the stock in 2023 and up over 100% from its lows of the last year
$ADYEY is up over 110% since my buy rating on the stock in 2023, which essentially bottom ticked the stock (rare!)
And $MNDY is up 64% from my buy rating in 2023
But the
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$HIMS Andrew Dudum's thoughts on selling GLP-1s without shortage:
He believes that personalized versions of GLP-1s will allow HIMS to sell the drugs even w/o shortages
Is this the underlying rational for $NVO's former COO and president saying HIMS has a long future of selling
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Just the fact that $HIMS gross profit has 9x'd over the last four years is fairly incredible
Still a very long runway for growth ahead, and HIMS continues to capture share in an expanding market
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$HIMS full year guide:
"For the full year 2024, we expect:
Revenue of $1.20 billion to $1.23 billion.
Adjusted EBITDA of $120 million to $135 million, reflecting an Adjusted EBITDA margin of 10% to 11%."
Implies 39% growth for full year 2024
Fantastic
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$SE will likely do billions in high margin digital ad sales.
The net present value of these sales alone likely justifies the company’s current valuation.
Even with lower market share than its current ~50%, it could build a huge digital ad business (note that $MELI only has 35%
Investors have caught up to the $AMZN digital ad thesis.
But they continue to ignore the opportunity for digital ad growth for $MELI (1.6% of $10B in GMV Q2 2023), $SE and $CPNG
( $UBER and $GRAB are interesting digital ad plays as well)
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Rahul Setty's note on $HIMS GLP-1 product is a must read.
I shared an excerpt below that got me very excited about HIMS' GLP-1 product
As I understand it, presently, sales from GLP-1 are not being factored into analyst estimates, so upward estimate revisions are very likely on
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$HIMS CFO Yemi Okupe provided three points that supported HIMS' belief that it could continue to expand the difference between gross profit an S&M
Those three points were virtually identical to the points I communicated in my note on HIMS (screenshot below)
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Stock prices always follow free cash flow per share over time
$SE
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At about 14 yrs old, $MELI held about $200M in cash on its balance sheet
At about 14 yrs old, $SE holds $8.5B+ in cash on its balance sheet
This is what I mean when I say SE's cash hoard is genuinely massive (and it's growing because the conglomerate is fcf positive now)
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Excerpt from $SE CEO Forrest Li's recent letter to employees:
"Some of you will remember this, from the note I wrote to you three years ago today:
'I am grateful for this amazing year. At the same time, I find myself arriving at our 12th birthday feeling a little worried –
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$HIMS Q2 2024 guidance:
"For the second quarter 2024, we expect:
Revenue of $292 million to $297 million.
Adjusted EBITDA of $30 million to $35 million, reflecting an Adjusted EBITDA margin of 10% to 12%."
Implies 41.5% growth at the mid point
Massive guide
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$SE Shopee had a seasonally strong quarter w/ growth in gross orders and GMV on a sequential basis Q4'23 to Q1'24. Q1'24 is seasonally weak
Year over year, growth in these respects was phenomenal: gross orders up 57%, GMV up 36% and revenue up 33%
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LAS' buy ratings thus far (+ thoughts on each)
$SE $48.25/share
$TSLA $214.88/share
$META $316.75/share
$ADYEY $6.80/share
$CPNG $15.50/share
$MNDY $163.23/share
$S $23.50/share
$HIMS $15.50/share
$GRAB $3.15/share
$FOUR $73.20/share
Thoughts:
Sea Ltd. (SE): I continue to
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These are some of the most important secular growth trends of the 2020s:
Ecommerce
Digital Ads
Buy Now, Pay Later & Digital Banking
The Region of SE Asia
Which company benefits from all four?
(it's $SE)
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There are legitimate bear theses for $HIMS out there, but $LLY resoundingly validating the HIMS business model is objectively not one of them and should not be a reason to sell the stock in a sweaty panic.
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Here's why $HIMS is up ~30% today:
"Hims & Hers Announces Access to GLP-1 Injections, Passing Cost Savings Onto Customers"
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Keep your heads up $HIMS community
Outperformed the market today 💪😅
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Cybersecurity landscape today:
$CRWD 24.5x ev/sales, ~30% growth, $4B ARR, unknown liabilities associated w/ latest incident
$S 8x ev/sales, ~30% growth, $800M ARR, growth sustainability questions
$PANW 13x sales, ~15% growth, $8B ARR, legacy tech
Which are you buying?
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$SE earnings preview
I typed out a long thread and incorporated a host of data but decided to just simplify my view in the ideas below:
1) Shopee
Shopee could lose share to TT Shop and/or Temu as they spend aggressively in the region, but Shopee is taking the right steps to
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SE Asia's ecommerce GMV has flatlined recently as the region re-opened fully after years of lockdowns.
This is likely the most impactful variable in the equation of $SE's growth slowdown (pulling up hard on profitability would be the other very impactful variable. Market share
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$SE market share = ~48%. Achieved despite its two primary competitors having 3 and 6 year head starts on it
Q3 '23, GMV and orders grew 11% and 23% respectively.
SE gained market share in Q3 '23
$MELI ecom LatAm market share = ~35%
$AMZN ecom U.S. market share = 37.6%
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$HIMS reality:
$47.6M in free cash flow Q2'24, highest ever
Has now generated fcf for 6 consecutive Qs while growing ~50%
$230M cash/$0 debt
~70% growth Q3'24
S&M as a % of revenue = 46%, lowest ever
Phenomenal performance, clean balance sheet, sustained fcf
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Someone said $HIMS is down because its margin guidance
But that was the same guidance it gave in Q1'24 report, so not negative for it to be flat
The co. is likely spending heavily on getting GLP-1s off the ground
Hence the guide for 67% growth in Q3'24
Nothing about the
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It's incredible to me that $HIMS has become all about the GLP-1s
My frank thoughts are that owners need to relax about the GLP-1s
1) They aren't necessary for the thesis to work
2) They will be on the platform in due course, and all this will be a blip on the radar in
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$HIMS free cash flow continues to ascend, with it reporting $47.6M of fcf in Q2'24 (fantastic)
As of Q2'24, it generated $91.6M in TTM free cash flow, its best TTM fcf generation ever
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$SE up on an analyst upgrade
Should simply be up on:
1) All three lines of biz will grow double digits 2024
2) All three lines of biz will sustainably produce fcf by end of 2024
3) SE conglomerate already sustainably produces fcf
4) SE has an outrageously large cash hoard of
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These are all the "buy" ratings we've done so far:
$SE $48.25/share
$TSLA 214.88/share (always knew this was a 10 yr thesis w/ no momo now)
$META $316.75/share
$ADYEY $6.80/share
$CPNG $15.50/share
$MNDY $163/share
$S $23.50/share (ridiculous response to best Q ever)
$HIMS
If you’d like to know exactly what I/LAS likes in terms of buys/sells/holds, please visit lastevensinvestments dot com (link in bio)
In briefs section, you’ll see all LAS’ ratings thus far (need to scroll a bit)
When we do finally really like $SNOW or $CAVA over time, you will
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$HIMS Semaglutide and Tirzepatide remain on the FDA shortage list
In a post shortage world, HIMS believes that it can titrate unique dosages for patients who do not tolerate the $LLY $NVO dosage offerings
This is the fundamental basis for their belief that they can continue
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An interesting way to think about $HIMS is the idea that $META's '22 decline had absolutely nothing to do w/ anything other than its fcf/share declining monumentally in '22.
All the narratives were just noise.
Stock prices always follow free cash flow per share over time.
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$SE CEO Forrest Li shared, in his recent letter to employees, that, via the implementation of AI tech in service of customers, Sea Ltd. could experience a 30x value increase:
"As I shared with you in that birthday note three years ago, 'We are a tech company. This means that we
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$HIMS just reported one of its best quarters ever
Largest number of quarterly subscriber adds in years
Highest adjusted ebitda (rough proxy for free cash flow) ever
Lowest sales & marketing as a % of gross profit ever
Sustained hypergrowth
Market will figure it out
We've literally not had a bad quarter since $HIMS went public
Not a single one. Perfection every quarter...
Looking at the stock chart since "IPO," with this reality in mind, is like staring into the cosmos and experiencing the befuddling wonder of its vastness
Awe-inspiring
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W/ this math in mind, $HIMS could double and still be reasonably valued in terms of risk = return, and objectively, HIMS is not $COST so it should offer 20%+ returns...
And it would... at $26/share... based on mgmt's long term margin guidance and current scale
Using margins at maturity (18.5% fcf margin), EV/2024 fcf = 12x 💀
Market still thinks bankruptcy is more likely than the thesis (multi-product AI-orchestrated GP platform at nat'l scale w/ attractive margins) materializing as evidenced by this continued depressive pricing
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Very strong growth for all three of $SE's lines of business
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I spoke with a doctor who was recently let go by $HIMS
This doctor had been operating a large portion of their practice on the platform over the last 4 years or so and owns tens of thousands of shares of the stock. Still does confidently after being let go.
It appears that HIMS
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We have to laugh a little bit, $HIMS community, at the fact that HIMS achieves its highest free cash flow margins ever, on the heels of its most successful category launch ever, while sustaining 50%+ growth, alongside $235M cash/$0 debt, and the market decides to get really
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Within the LAS community, I recently shared the experience of my friend, who was formerly a $HIMS' doc, who's currently working in the online GLP-1 business
In short, it is presently booming
I've noted that HIMS is still very attractive/undervalued just based on its legacy
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W/ GLP-1s shortage ending, let's remember:
1) $HIMS grew 46% without GLP-1s in Q2'24. That is insane growth
2) It grew at 46% while generating $47.6M in free cash flow in Q2'24. The co. is only 6.5 years old, so this is likewise incredible
3) At $15/share, HIMS trades at 17.2x
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Brilliant report from $MELI
In addition to the healthy FinTech user growth, its ecommerce active buyers and items sold growth accelerated, and both metrics generally grew at incredible rates
Ecom can be differentiated! 😂
$SE $AMZN $CPNG
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This mugshot is from a totally unrelated DUI arrest
Clown show stuff here
@hntrbrkmedia
Meet the $HIMS supplier: BPI Labs, owned by Belcher Pharmaceuticals. Former Belcher execs were convicted in a "Nationwide Telemedicine Pharmacy Health Care Fraud Conspiracy."
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$SE Q1’24 results will be released tomorrow morning (EST)
Regardless of how well the co. performed in Q1 (my belief is that it performed very well), I’ll here to provide interpretation and coverage of the results
Looking forward to the report!
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$SE CEO Forrest Li's remarks on Shopee's allegedly non-existent logistics network:
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$SE grew 23% while also generating free cash flow
All three lines of biz are back to double digit growth, and Shopee will likely generate free cash flow faster than the market expected in '24
Lots to love from the report
$SE, at this point, is really as simple:
1. All three lines of business are growing
2. All three lines of business will be fcf generative by year end
3. Shopee is not only sustaining market share but also capturing it
All systems go for 2024
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$HIMS CEO Andrew Dudum stating that $LLY Tirzepatide will come to the platform in the near future, despite the shortage ending:
🤔
"We also believe that enabling providers to access a broader set of solutions will make MedMatch by Hims & Hers even more impactful. In the coming
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By request, stock prices always follow free cash flow per share over time
$GRAB
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Fastest growing regions for ecommerce in the world
$SE dominates five out of ten of them
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$S trading at 7.5x EV/TTM sales as of today, growing 30%+
5.5x EV/2024 ARR
$1.1B cash, no debt, fcf+
Just reported its best quarter ever
A notable element of the $S thesis, in light of the $CRWD situation, is that the churn bear case has now greatly diminished
To this end:
1) We should remember the $SPLK case study in which it 2-3x'd its ARR while adding ~0 new logos. It did this by upselling its existing
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$HIMS is interesting not because it's performed well as a stock in recent months, but because its experience as a public company illustrates an interesting aspect of investing:
The market can stay wrong about things for very long periods of time.
There's a whole philosophy
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$HIMS growing 50%+, six consecutive quarters of free cash flow generation, $235M cash/$0 debt, latest weight loss product grew to $100M+ in 7 months (w/ no help from GLP-1s)
Now trading at 29x 2025 GAAP EPS
Notably, its margins still have room to expand as it matures as a co.
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$CELH $CMG $NKE $LULU $SBUX $TSLA all the most popular consumer brands getting annihilated
All ecom names $MELI $AMZN $CPNG $SE trading at discounts to historic valuation levels
Question is whether this is run of the mill valuation compression or a consumer health warning
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$HIMS According to Novo Nordisk, "Roughly 110 million American adults are living with obesity and approximately 50 million of them have insurance coverage for weight loss drugs, a spokesperson for Novo Nordisk said in a statement.
The company is actively working with private
Regarding $HIMS offering GLP-1s post shortage:
1) Some chance it can offer compounded versions post shortage but remains to be seen, and we can't pencil this in
2) It will offer branded versions (language from Andrew Dudum in screenshot below)
Importantly, we've seen certain
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$MELI's price action is really wild
With Q1 2024 in the books, MELI trades firmly at "Great Recession" valuations
The company just reported stellar Q4 2023 earnings
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As I've shared, we're only paying for $SE digital ads today.
There's also:
Garena
Sea Money
Sea Logistics
And future products, such as, very, very notably, Sea Computing:
"According to the Ministry, Sea's proposed plans include setting up cloud services, data hosting and
$SE will likely do billions in high margin digital ad sales.
The net present value of these sales alone likely justifies the company’s current valuation.
Even with lower market share than its current ~50%, it could build a huge digital ad business (note that $MELI only has 35%
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People posting about $HIMS getting added to these multi-billion dollar funds
Yes, that's what free cash flow in six of the last six quarters alongside 50% growth via a compelling multi-product platform will cause
Notably, equities are risky, but HIMS has been decimating bear
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@samuel_spitz
Read The Sovereign Individual.
It's an amalgamation of all those topics and has a foreword actually written by Peter Thiel.
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I lost a couple followers through the barrage of re-posting my $HIMS content but I get asked about the payback period bear thesis every other week now, and, as I've been joking about on the podcast, it's all I've talked about for the last year or so re: HIMS, so felt the need to
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I said I was done commenting on $HIMS but now I'm creating the Q2'24 review, and there's just so much data coming to mind that I'll continue sharing ideas as I work through this
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"A great investment opportunity arises when a marvelous business encounters a one-time, huge, but solvable problem."
-Warren Buffett
$CRWD
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