I believe Hims & Hers has a strong and strengthening moat because it’s not just building a brand — it’s owning the entire consumer health journey. From first search to final delivery, Hims controls the experience. They’re vertically integrated, which allows them to move fast, reduce friction, and offer a better price-to-convenience ratio than traditional healthcare. As the brand becomes more trusted and normalized, switching costs increase — not in the form of contracts, but in habit, satisfaction, and simplicity. And in healthcare, once you earn trust and become the go-to, that grip tends to tighten over time, not loosen.
Most of that just sounds like marketing speak. “Owning the consumer journey” is not a moat. I don’t doubt that Hims can be more convenient than traditional healthcare, the question is why others can’t just replicate their business model.
The only thing you mentioned that can conceivably be a most, in my view, is brand trust. But even that I don’t see. The consumer doesn’t give a damn who delivers their medicine to their door - they’re gonna go with whoever’s cheapest. Medicine is medicine.
I agree that, based on the current information, Hims’ moat isn’t fully secured yet. But in my view, that’s exactly where the opportunity lies. When it comes to pricing, I believe Hims has a clear advantage over the competition. I’m still convinced that trust in the provider of my medication is a key factor—especially considering that Hims offers personalized products.
If I’m satisfied as a customer with medication that is tailored to my specific needs, it’s hard to imagine switching to the next-best provider. This might also explain why Amazon, despite many announcements and having all the necessary resources on paper, hasn’t been particularly successful in this space. There’s one thing Amazon struggles to earn: trust.
I’m not saying it’s moat isn’t fully secured yet - I’m saying I don’t think it ever will have a moat.
Trust and brand affection is a pretty weak moat. Not for >100 year old companies like Coca Cola, Rolex or Ferrari; but definitely for young telehealth companies.
When you say Hims has a pricing advantage, do you mean it has pricing power or cost advantage? Pricing power just goes back to the same “how important/durable is trust” argument. As for cost advantage - far too fleeting. Economies of scale are also a famously weak moat.
If I have one company delivering medicine to me once a week, and another is offering to do it for a few dollars a week less, I’m gonna switch pretty quick.
Tech companies deserve high valuations because the majority of costs are fixed, so incremental revenue drops to the bottom line and it’s very hard for a disruptor to undercut them, and because network effects are very common and strong. For HIMS, the majority of costs are variable, and there is no network effect. Also, with effects of GLP-1 compounders gone, the valuation is gonna look a whole lot more expensive. So you’re paying really quite a high valuation for really quite a poor-quality tech company.
My mental model and clear focus on long-term developments are helping me navigate the current market phase. How are you positioned in this environment?
The market is big, but what is the moat??
I believe Hims & Hers has a strong and strengthening moat because it’s not just building a brand — it’s owning the entire consumer health journey. From first search to final delivery, Hims controls the experience. They’re vertically integrated, which allows them to move fast, reduce friction, and offer a better price-to-convenience ratio than traditional healthcare. As the brand becomes more trusted and normalized, switching costs increase — not in the form of contracts, but in habit, satisfaction, and simplicity. And in healthcare, once you earn trust and become the go-to, that grip tends to tighten over time, not loosen.
Most of that just sounds like marketing speak. “Owning the consumer journey” is not a moat. I don’t doubt that Hims can be more convenient than traditional healthcare, the question is why others can’t just replicate their business model.
The only thing you mentioned that can conceivably be a most, in my view, is brand trust. But even that I don’t see. The consumer doesn’t give a damn who delivers their medicine to their door - they’re gonna go with whoever’s cheapest. Medicine is medicine.
Very interesting thoughts—thank you for sharing your ideas. Let’s definitely reconnect in a year or two to review how the company has developed.
I agree that, based on the current information, Hims’ moat isn’t fully secured yet. But in my view, that’s exactly where the opportunity lies. When it comes to pricing, I believe Hims has a clear advantage over the competition. I’m still convinced that trust in the provider of my medication is a key factor—especially considering that Hims offers personalized products.
If I’m satisfied as a customer with medication that is tailored to my specific needs, it’s hard to imagine switching to the next-best provider. This might also explain why Amazon, despite many announcements and having all the necessary resources on paper, hasn’t been particularly successful in this space. There’s one thing Amazon struggles to earn: trust.
I’m not saying it’s moat isn’t fully secured yet - I’m saying I don’t think it ever will have a moat.
Trust and brand affection is a pretty weak moat. Not for >100 year old companies like Coca Cola, Rolex or Ferrari; but definitely for young telehealth companies.
When you say Hims has a pricing advantage, do you mean it has pricing power or cost advantage? Pricing power just goes back to the same “how important/durable is trust” argument. As for cost advantage - far too fleeting. Economies of scale are also a famously weak moat.
If I have one company delivering medicine to me once a week, and another is offering to do it for a few dollars a week less, I’m gonna switch pretty quick.
Tech companies deserve high valuations because the majority of costs are fixed, so incremental revenue drops to the bottom line and it’s very hard for a disruptor to undercut them, and because network effects are very common and strong. For HIMS, the majority of costs are variable, and there is no network effect. Also, with effects of GLP-1 compounders gone, the valuation is gonna look a whole lot more expensive. So you’re paying really quite a high valuation for really quite a poor-quality tech company.
Really good read! I’m also confident this company has massive growth ahead.
Thank you for your positive feedback.
My mental model and clear focus on long-term developments are helping me navigate the current market phase. How are you positioned in this environment?
I like your investment thesis. Im not positioned into this business currently but I would be open to having a small portion into this business.