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Hims & Hers Health, Inc. (HIMS) Expects Rising Earnings: Should You Buy?

When Hims & Hers Health, Inc. (HIMS) reports results for the quarter ending September 2024, Wall Street expects a year-over-year profit increase on higher sales. While this widely known consensus outlook is important in assessing the company's financial performance, an important factor that could impact the stock price in the near term is comparing actual results to these estimates.

The earnings report, expected to be released on November 4, 2024, could help the stock move higher if these key numbers come in better than expected. However, if they miss, the stock could decline.

While management's discussion of terms and conditions at the earnings release will largely determine the sustainability of the immediate price change and future earnings expectations, it is worth gaining insight into the chances of a positive EPS surprise.

This company is expected to report quarterly earnings of $0.06 per share in its upcoming report, representing a year-over-year change of +250%.

Revenue is expected to be $382.09 million, up 68.5% from the year-ago quarter.

The consensus EPS estimate for the quarter has remained unchanged over the past 30 days. This essentially reflects the way the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by individual analysts may not always be reflected in the overall change.

Estimate revisions prior to a company's earnings release provide an indication of business conditions for the period in which the results are reported. These insights form the core of our proprietary surprise prediction model – the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The most accurate estimate is a more recent version of the Zacks Consensus EPS estimate. The idea is that analysts who revise their estimates right before an earnings release have the latest information, which could potentially be more accurate than they and others contributing to the consensus had previously predicted.

Thus, a positive or negative Earnings ESP value theoretically indicates the likely deviation of actual earnings from the consensus estimate. However, the predictive power of the model is only significant for positive ESP values.

A positive Earnings ESP is a strong indicator of earnings growth, especially when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

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