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The Ugly Stick Has Beaten Beauty Stocks, But They’re Ready to Rebound

Key Points
Hims & Hers is a telehealth platform offering wellness and beauty products, including medications and medical consultations.
Hims is experiencing strong growth, with revenues rising 83.1% and subscriber growth rising 74% year over year (YoY). They are expanding into the weight management segment by offering GLP-1 agonist drugs by the end of 2023.
Insiders buying over 100,000 shares has led to a 12% jump in The Beauty Health Company stock.
Beauty stocks, such as Ulta Beauty Inc. and Estee Lauder Co., have performed poorly this year compared to the S&P 500 index’s gain of 20.2%.
Niche beauty and wellness companies, like Hims & Hers, may be nearing a bottom as their fundamentals improve.

Hims & Hers started as a platform to sell erectile dysfunction (ED) medication and sexual health products but has expanded to offer a wide range of wellness and beauty care products. They provide over-the-counter and prescription medications for various conditions such as hair loss, birth control, anxiety, depression, anti-aging, skincare, and primary care services. Their network includes over 600 licensed medical providers, offering convenient and accessible healthcare services.

Hims continues to grow with 74% subscriber growth, 83% revenue growth, and 12% adjusted EBITDA margin YoY growth. In Q2 2023, the company reported a 3-cent EPS loss, beating analyst expectations. Revenues surged 83% YoY to $207.91 million, and subscribers grew 74% YoY to 1.3 million. The company has also raised its revenue guidance for Q3 2023 and the full year.

The Beauty Health Company sells skin care products and services. They have a community of estheticians and professionals who personalize skin care in over 90 countries. Their flagship product brand, Hydrafacial, is a hydra dermabrasion machine used for facials. The company also sells other products like micro-needling devices and scalp health products.

Beauty Health reported its Q2 2023 earnings, showing a rise in profits and revenues. However, their gross margins have decreased due to product costs and a shift in product mix. The company is rebounding from launch issues and plans to expand in China.

Insiders have shown confidence in The Beauty Health Company by buying shares. CEO Andrew Stanleick remarked on strong consumer engagement and net sales growth in various regions. The company reaffirms its outlook for full-year 2023 revenues and plans to expand in China.

Note: The information in this article is summarized from publicly available sources and does not represent financial advice.

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