How To Trade Hims & Hers Health Stock Ahead of Its Earnings?

Hims & Hers Health (NYSE:HIMS) is scheduled to release its earnings report on Monday, May 5, 2025. Historically, the stock has exhibited significant volatility around its earnings announcements. Over the past five years, it has shown a negative one-day return following earnings in 56% of cases, with a median negative return of -5.8% and a maximum negative return of -22.3%.

This upcoming earnings report is particularly noteworthy, as analysts anticipate earnings per share of $0.23 on revenue of $538.4 million. These estimates represent approximately a two-fold increase compared to the earnings of $0.10 per share on revenue of $278.2 million reported in the same quarter last year. The company has been experiencing strong customer growth, and this trend is expected to persist.

For event-driven traders, understanding these historical patterns could offer a potential edge, although the actual market reaction will heavily depend on how the reported results compare to consensus estimates and broader market expectations. There are generally two approaches to consider: either positioning before the earnings release based on historical probabilities, or analyzing the correlation between immediate and medium-term returns after the announcement to inform subsequent trades.

From a fundamental perspective, Hims currently has a market capitalization of $7.7 billion. Its revenue over the trailing twelve months stands at $1.5 billion, and the company has demonstrated operational profitability with $62 million in operating profits and a net income of $126 million.

That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

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Hims & Hers Health’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 16 earnings data points recorded over the last five years, with 7 positive and 9 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 44% of the time.
• However, this percentage decreases to 42% if we consider data for the last 3 years instead of 5.
• Median of the 7 positive returns = 13%, and median of the 9 negative returns = -5.8%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

HIMS 1D, 5D, and 21D Post Earnings Return

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

HIMS Correlation Between 1D, 5D and 21D Historical Returns

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