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    • Hims & Hers Health, Inc.’s earnings (HIMS) Expected to Rise: Should You Buy?
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    Hims & Hers Health, Inc.’s earnings (HIMS) Expected to Rise: Should You Buy?

    Vaseline Posted on

    Wall Street expects year-over-year earnings growth on higher revenues when Hims & Hers Health, Inc. (HIMS) reports its results for the quarter ending September 2024. While this widely known consensus outlook is important in measuring the company’s earnings picture, one powerful factor that could impact the stock price in the near term is how the actual results relate to these estimates.

    The earnings report, which is expected to be released on November 4, 2024, could help the stock price rise if these key figures are better than expected. On the other hand, if they miss, the stock could go lower.

    While management’s discussion of business conditions on the earnings call will largely determine the sustainability of the immediate price change and future earnings expectations, it’s worth having some insight into the chances of a positive EPS surprise.

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

    Revenue is expected to reach $382.09 million, up 68.5% from the same quarter last year.

    The consensus EPS estimate for the quarter has remained unchanged over the past thirty days. This is essentially a reflection of how the respective analysts have collectively reassessed their initial estimates over this period.

    Investors should note that the direction of estimate revisions by each covered analyst may not always be reflected in the overall change.

    Estimate revisions prior to a company’s earnings release provide clues to business conditions for the period for which the results are being announced. This insight is at the heart of our proprietary surprise forecast 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 here is that analysts who revise their estimates just before earnings releases have the latest information, which could potentially be more accurate than what 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 measurements.

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

    Vaseline
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