Hims & Hers vs. Amwell: Which Telehealth Stock Is the Better Buy?

An analysis comparing Hims & Hers (HIMS) and Amwell (AMWL) as investments in the telehealth sector favors HIMS due to its superior stock performance, profitability, and user engagement, despite AMWL appearing cheaper based on forward price-to-sales ratios. HIMS is expanding into new specialties and partnering with companies like Novo Nordisk, while AMWL focuses on enabling healthcare providers with its platform and has partnerships with organizations like Cleveland Clinic; however, analysts' average price target suggests a potential decline for HIMS and a significant increase for AMWL.

Analysis

The telehealth sector is witnessing significant evolution, with Hims & Hers Health, Inc. (HIMS) and American Well Corporation (AMWL) representing distinct investment opportunities. HIMS has exhibited strong stock performance, appreciating 35.1% over the past three months and 183% in the past year, significantly outperforming AMWL, which declined 22.3% and 20.3% respectively over the same periods. From a valuation perspective, HIMS trades at a forward 12-month price-to-sales (P/S) ratio of 4.6X, above its three-year median of 2.3X and the medical sector average of 2.4X, indicating a premium valuation. In contrast, AMWL’s forward P/S is 0.4X, below its median of 1.3X, suggesting it is relatively undervalued. HIMS is pursuing aggressive specialty expansion, evidenced by its collaboration with Novo Nordisk for obesity care, the launch of six-month Wegovy access at $549/month, and the fact that over 65% of its new 2024 subscribers benefited from personalized products via its MedMatch AI. AMWL, on the other hand, focuses on empowering healthcare providers with its Converge platform, which boasts interoperability with major EHRs and supports partnerships with organizations like Cleveland Clinic. Financially, HIMS projects a 166.7% EPS improvement for 2025, while AMWL aims for a 49.7% reduction in its loss per share. Analyst sentiment presents a dichotomy: HIMS's average price target of $43.00 implies a 17.9% potential decline, whereas AMWL's target of $10.00 suggests a 44.7% potential increase. Despite this, the article favors HIMS (Zacks Rank #2 Buy) due to its financial stability, profitability, user engagement, and capital-efficient model, while AMWL (Zacks Rank #3 Hold) is recognized for its growth and clinical expansion efforts.

Key Decisions for Investors

• Investors should weigh HIMS's strong operational momentum, direct-to-consumer appeal, and profitability against its current premium valuation and analyst price targets that indicate potential for near-term pullback.
• AMWL presents a value-oriented opportunity with significant analyst-projected upside, but this is contingent on its ability to successfully execute its B2B enterprise strategy and demonstrate a clear path to profitability.
• Closely monitor key catalysts for HIMS, such as uptake of its new obesity treatments and AI personalization impact, and for AMWL, track the progress of its Converge platform adoption by large health systems and its cost alignment measures.