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S&P 500   4,288.05
DOW   33,507.50
QQQ   358.27
Will the Energy Sector Continue to Outshine the Market?
Better Than Oil Stocks? (Ad)
Borrowers are reassessing their budgets as student loan payments resume after pandemic pause
In a good sign for China's struggling economy, factory activity grows for the first time in 6 months
66,000% upside on tiny biotech? (Ad)
MarketBeat Week in Review – 9/25 - 9/29
Cyprus hails Moody's two-notch credit rating upgrade bringing the country into investment grade
66,000% upside on tiny biotech? (Ad)
Almost all of Nagorno-Karabakh's people have left, Armenia's government says
Federal agency sues Chipotle after a Kansas manager allegedly ripped off an employee's hijab
S&P 500   4,288.05
DOW   33,507.50
QQQ   358.27
Will the Energy Sector Continue to Outshine the Market?
Better Than Oil Stocks? (Ad)
Borrowers are reassessing their budgets as student loan payments resume after pandemic pause
In a good sign for China's struggling economy, factory activity grows for the first time in 6 months
66,000% upside on tiny biotech? (Ad)
MarketBeat Week in Review – 9/25 - 9/29
Cyprus hails Moody's two-notch credit rating upgrade bringing the country into investment grade
66,000% upside on tiny biotech? (Ad)
Almost all of Nagorno-Karabakh's people have left, Armenia's government says
Federal agency sues Chipotle after a Kansas manager allegedly ripped off an employee's hijab
S&P 500   4,288.05
DOW   33,507.50
QQQ   358.27
Will the Energy Sector Continue to Outshine the Market?
Better Than Oil Stocks? (Ad)
Borrowers are reassessing their budgets as student loan payments resume after pandemic pause
In a good sign for China's struggling economy, factory activity grows for the first time in 6 months
66,000% upside on tiny biotech? (Ad)
MarketBeat Week in Review – 9/25 - 9/29
Cyprus hails Moody's two-notch credit rating upgrade bringing the country into investment grade
66,000% upside on tiny biotech? (Ad)
Almost all of Nagorno-Karabakh's people have left, Armenia's government says
Federal agency sues Chipotle after a Kansas manager allegedly ripped off an employee's hijab

2 Beauty Stocks Beaten By the Ugly Stick But Ready to Rally

Health and Beauty Stocks

Key Points

  • Hims & Hers provides a telehealth wellness and beauty platform offering medical consults, sexual health products, and over-the-counter and prescription medications conveniently and discreetly.
  • Hims is in hypergrowth mode, with revenues rising 83.1% and subscriber growth rising 74% YoY and expanding into the red-hot weight management segment offering GLP-1 agonist drugs by the end of 2023.
  • The Beauty Health Company stock jumped 12% as insiders bought over 100,000 shares in the open market.
  • 5 stocks we like better than Hims & Hers Health

Beauty stocks have not been pretty this year. Cosmetics retailer Ulta Beauty Inc. NASDAQ: ULTA and Estee Lauder Co. NYSE: EL shares are trading down 12.3% and 38.7%, respectively. The performance is downright ugly compared to the 20.2% gain in the benchmark S&P 500 index for 2023.

While beauty stocks were the darlings of Wall Street during the post-pandemic reopening, posting record top and bottom lines, they have soured in 2023 as normalization continues to kick in like a bad hangover. As we move down the list to niche beauty and wellness companies, two low-priced stocks may finally be nearing a bottom as fundamentals improve.

His & Hers Health Inc. NASDAQ: HIMS

Originally marketed to sell erectile dysfunction (ED) medication and sexual health products through a telehealth platform,  Hims & Hers has expanded its scope to include wellness and beauty care products. It offers over-the-counter and prescription medication for hair loss, birth control, anxiety and depression, anti-aging and skincare. It also offers primary care services ranging from sick visits to annual physicals, virtual visits and prescription refills.

Mental health services include therapy, medication management and psychiatry. It offers a network of over 600 licensed medical providers, averaging less than 24 hours between visits to treatment and providing a 24/7 convenient way to access healthcare services. The platform is expanding to new categories, including cardiovascular health and weight management. Hims plans to roll out its weight management services, which will provide GLP-1 agonist weight-loss drugs by the end of the day.


Hyper Growth Mode

Hims continues to grow with 74% subscriber growth, 83% revenue growth and 12% adjusted EBITDA margin YoY growth. The company reported Q2 2023 earnings of a 3-cent EPS loss, beating consensus analyst expectations for a 5-cent EPS loss by 2 cents. Revenues surged 83% YoY to $207.91 million, beating $204.95 million analyst estimates. Subscribers grew 74% YoY to 1.3 million, with expectations of 2 million by year's end. Adjusted EBITDA has grown 12% YoY. The company has no debt.

Raised Guidance

Hims raised its Q3 2023 revenue guidance to $217 million to $222 million versus $213 million consensus analyst estimates. It raised full-year 2023 revenues of $830 million to $850 million, from previous guidance of $810 million to $830 million, versus $830.75 million consensus analyst estimates.

Hims Co-Founder and CEO Andrew Dudum commented, “This increasingly powerful flywheel model gives us confidence in our ability to achieve and surpass our 2025 target of at least $1.2 billion in revenue and over $100 million in adjusted EBITDA. Indeed, we believe the strength and composition of revenue and overarching durability of the model we're building are pointing towards many years of robust growth and increased profitability ahead.”

His & Hers Health analyst ratings and price targets are at MarketBeat.

Find Hims & Hers Health peers and competitor’s stocks with the MarketBeat stock screener.

Daily Descending Triangle Breakdown

The daily candlestick chart on HIMS illustrates the descending triangle breakdown as shares collapsed on the flat-bottom horizontal trendline support at $8.08 on its Q2 2023 earnings report. This started a selling spree that has continued to fall to the low 6s. The daily relative strength index (RSI) oscillator fell under the oversold 30-band but is attempting to stall.

The daily market structure low (MSL) triggers a breakout through $6.42. Pullback supports are at $6.01, $5.56, $5.30 and $5.02.

The Beauty Health Company Inc. NASDAQ: SKIN

As the stock symbol hints, the Beauty Health Company sells skin care products and services. It's built a community of estheticians and professionals who personalize skin care in over 90 countries. Its flagship product brand, Hydrafacial, is a hydra dermabrasion machine that lets estheticians provide facials charging between $150 to $250 per session.

The machines can range in price from $10,000 up to over $30,000 for the HydraFacial Elite machine. They also market SkinStylus micro-needling and Keravine scalp health. The Beauty Health Company also sells various serums and supplies for its machines depending on the types of treatment.

The company has an installed base of 29,682 Hydrafacial devices as of the first half of 2023, up 29% YoY. The average delivery system selling price rose 3% YoY to $22,900. 

Growth Continues

Beauty Health reported its Q2 2023 earnings report on Aug. 9, 2023. The company had 3 cents per share in profits, short of the 5 cents per share analyst estimates. Revenues rose 13.5% YoY to $117.5 million, beating $114.5 million analyst estimates.

While the company enjoys double-digit growth, its gross margins have taken a hit, falling to 64.8% in Q2 2023, down from 71% in Q2 2022. The margin drop was attributed to an unfavorable mix shift to refurbished systems and duplicative product costs.

Net loss fell to $3.4 million from $6.3 million in the year-ago period. Adjusted EBITDA rose to $17.8 million, up 15.1% versus $14.6 million in Q2 2022. Nearly half the systems sold eight to 10 years ago are still active.

CEO Insights

The Beauty Health Company CEO Andrew Stanleick remarked that consumer engagement was strong with 34% YoY increased volumes in strong consumables net sales to $51.9 million—continued strength in EMEA and APAC. China had 167% YoY net sales growth.

The company is bouncing back from the Syndeo US launch issues, which also impacted gross margins in the quarter. At its own costs, the company exchanged Syndeo devices to protect relationships at a cost to gross margins. They have “greatly” reduced system exchanges.

CEO Stanleick commented, “I am pleased to say we have greatly reduced system exchanges. Today, with the changes I initiated, we are equipped to address issues with over-the-air software updates or in-field support. And we have identified simple component upgrades to enhance the system's durability, and we have begun to replace these components in existing devices in the field.” He expects to target 500 basis points of gross margin expansion by the end of 2025.

Reaffirms 2023 Outlook

The company reaffirms its outlook for full-year 2023 revenues of $600 million to $700 million. Adjusted EBITDA is expected to be from $18 to 19% or $83 million to $91 million. The company plans to expand in China as 41% of consumers are expected to spend on health and beauty products. China generated $23.8 million in the first half of 2023.

August Insider Buying

On Aug. 18, 2023, filings showed insider buying of SKIN shares by members of its Board totaling over $630,000. Chairman Brent Saunders added 59,000 shares for a stake of 6.9% of outstanding shares.

Board member Michael Capellas bought 30,000 shares, and board member Doug Schillinger bought 33,000 shares. The new CFO, Michael Monahan, added 5,000 shares for her 0.27% stake in the company. CEO Stanleick added 16,000 shares for a 0.53% stake in the company.

The Beauty Health Company analyst ratings and price targets are at MarketBeat.

The Beauty Health Company peers and competitor’s stocks with the MarketBeat stock screener.

SKIN stock chart

Daily Descending Trading Channel

The daily candlestick chart on SKIN illustrates the daily descending trend channel, which is responsible for the 27% drop in price for 2023. Each bounce peaks at lower highs, and each fall bottoms at lower lows. The daily MSL triggers above $7.23. The daily RSI is attempting to bounce off the 50-band. Pullback supports are at $6.20, $5.77, $5.28 and $5.00.

Should you invest $1,000 in Hims & Hers Health right now?

Before you consider Hims & Hers Health, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Hims & Hers Health wasn't on the list.

While Hims & Hers Health currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

12 Stocks Corporate Insiders are Abandoning Cover

If a company's CEO, COO, and CFO were all selling shares of their stock, would you want to know?

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Beauty Health (SKIN)
2.6132 of 5 stars
$6.02+1.7%N/A-43.00Moderate Buy$14.28
Hims & Hers Health (HIMS)
2.119 of 5 stars
$6.29-1.1%N/A-28.59Moderate Buy$11.75
Ulta Beauty (ULTA)
2.8089 of 5 stars
$399.45+0.1%N/A16.03Moderate Buy$545.13
Estée Lauder Companies (EL)
3.0652 of 5 stars
$144.55+1.8%1.83%52.00Moderate Buy$204.42
Compare These Stocks  Add These Stocks to My Watchlist 

Jea Yu

About Jea Yu

Contributing Author: Trading Strategies

With over 20 years of active participation and analysis of the US equities, options and futures markets, Mr. Yu brings fresh insights into the workings of the financial markets. He has published four books by esteemed publishers McGraw-Hill, John Wiley & Sons, Marketplace Books and Bloomberg Press. His brainchild, the Underground Trader, was voted Forbes Best of the Web for four consecutive years under the active trader category. He has been a featured speaker all over the country at various expos and seminars who enjoys a standing-room-only reception in the largest convention halls from New York to Las Vegas. He has been quoted and featured in USA Today, Wall Street Journal, Traders Magazine and the Financial Times and various trade publications like Stocks & Commodities, Active Trader and Online Investor. Mr. Yu has a B.A. in Liberal Arts and minor in Business Administration from the University of Maryland.
Contact Jea Yu via email at JeaYu21@gmail.com.

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