🚩 $HIMS International Expansion is a RED Flag! 1. Socialised Healthcare Model 🇪🇺 In a lot of countries in Europe, there is a socialised healthcare model where governments cover a large share of healthcare expenses through high taxes and mandatory health insurance. The whole business case of $HIMS involves working outside the health insurance model. Why would anyone use $HIMS for dermatology, sexual health, or mental health if they can get all of those needs covered through their doctors without paying anything extra? They already pay high taxes and health insurance, why would they pay again for something that they already have access to? Of course healthcare is not perfect in the EU, there are large wait times and sometimes inconvenient healthcare options, or limited choice in medicines. But in general the affordability is not comparable to the US. This means that the $HIMS service must be much more convenient and faster for anyone to even consider using it. Even in cases where $HIMS would acquire a customer in Europe, it would be significantly less profitable than a customer in the US. Higher CAC - Because patients already have good options, marketing expenses to acquire a customer would be much higher. Higher Churn - I expect EU customers to cancel at a higher rate, because the bar to keep a subscription would be higher than in the US, as they would compare the outcome to existing options, which are better than in the US. The same medical outcome as in the US would result in more cancellations. Lower LTV - If you combine higher churn with lower prices due to lower purchasing power, you get significantly lower lifetime value. I am extremely skeptical that $HIMS can make it work in the EU. 2. Expanding to Latin America and Asia must be a joke. While not as developed, Latin America generally also has a socialised healthcare model similar as in EU. It would be extremely hard to acquire any users there. Furthermore, disposable incomes in Latin America and Asia are significantly lower than in the EU, not even talking of the US. How many subscribers $HIMS can get that are able to pay $200 a month? That is a monthly salary in Thailand. Another factor to consider is that private healthcare is significantly more affordable in these countries. So either people are too poor to afford $HIMS, or if they can, private healthcare would be similarly priced, but more convenient and better. 3. Regulation The healthcare industry is significantly more regulated in the EU, Latin America, and Asia than it is in the US. In many countries, there are laws that limit what services private healthcare companies can offer. This is to limit the competition with the public sector. Also, it is quite rare to see advertising for drugs, while in the US, the pharma industry has penetrated every media venue. In France, Thailand and Brazil D2C advertisements of prescription drugs are illegal. $HIMS won't be able to advertise as easily, and they won't be able to use dubious or cherry-picked effectiveness claims the way they are in the US. Most importantly, in many countries there are drug prices are regulated by the government. This means that drug prices outside the US are significantly lower. In the US, lower prices are part of the $HIMS value proposition. They won't be able to undercut competitors as they can in the US. 4. The US TAM 🇺🇸 The TAM in the US is just so larger than anywhere else in the world. Why would $HIMS even waste time looking abroad? In 2024, US spent $5.3T on healthcare, compared to around $2T in the EU. In Latin America and Asia the spending is even lower. The US is the perfect country for a D2C healthcare subscription company. - Large population of unhealthy people - High disposable incomes - No socialised healthcare - Expensive health insurance - Expensive private healthcare - Low-quality public healthcare - Highly susceptible to healthcare marketing - Open to trying new products and services - Less regulation 5. Conclusion Giving a 2030 target was a red flag and it is getting increasingly clear that it is unlikely that $HIMS will achieve it. It seems to me that $HIMS are just giving out these shinny object goals to sustain their stock price as their core GLP1 business is slowing down. International expansion may be a smokescreen to distract from legal and growth headwinds in the core US GLP-1 business. Lawsuit with $NVO seems imminent and I think $HIMS has a very low chance of winning it. I think courts will see $HIMS personalisation loophole for what it is. A straightforward attempt to circumvent pharma patent laws.