Hidden in Hims & Hers' story is a specific network effect—something big —that almost no one has spotted yet.
The current brick-and-mortar healthcare model will look like something from the Middle Ages once Andrew Dudum and the new members of his product team start delivering on the vision.
Today, most doctors work alone in their own offices. They show up at one building, see 5 or 10 patients, and go home. Over a whole career, they might treat just 1,000 people. The lessons they learn stay stuck in that one place and aren't shared. So the doctor nearby, who has treated about the same number of people, doesn't swap stories, learn together, or build on each other's know-how. What one patient goes through doesn't help the next one. Basically, every new doctor starts from scratch.
So as an example in psychiatry, if you walk into a psychiatrist's office today and say you're suffering from depression, the last 20 questions and then they'll say, 'Hey, there's 10 medicines, and each of those medicines have different pros and cons. Which one do you want to start with, to try?' And the patient will look at the doctor and say, 'Well, I don't know, you tell me which one's best.' What the doctor will say, and this [is what] you hear every time, the doctor will say, 'Well, you know what? It depends on the patient. You try different ones sometimes it works, sometimes they don't, and we just keep trying until we find an outcome.'
That's how Andrew Dudum explained it in a recent interview, and it captures the inefficiency perfectly.
What Hims & Hers is building is an AI-powered healthcare platform that takes all the learnings from every single interaction between doctors and patients, then pipes those insights right back into the system to provide better care for the very next patient. It's incredible network effects in action: The more patients treated, the more learning, the more effective Hims becomes, the more patients join—and so on in a reinforcing cycle that's increasingly hard for anyone to catch up to.
"Our view is that structured data across our platform has the ability to continuously unlock a better and more effective experience for our subscribers over time in a way that does not sacrifice subscriber privacy," the shareholder letter reads. "Our mission is to have an experience that is guided by a growing selection of structured insights, combining each customer’s history with patterns drawn from millions of past, de-identified patient-provider interactions. This will allow providers on our platform to make more informed decisions and adjust treatment in real time."
As Mohamed (Mo) Elshenawy, the new Chief Technology Officer, put it during the earnings call: "First, we will ensure care is supported by a unified data and intelligence platform. Our multisource learning system will not only improve and personalize access to care at scale, but also automate key processes like fulfillment, inventory and routing to increase efficiency. And we believe our systems powered by AI will never plateau and will continuously improve over time."
A doctor on the Hims platform will soon be 2x more effective than one working outside it. In a few years, that could be 10x, and eventually 100x. Doctors will have no choice but to opt in at a certain point, because patients will only want to be treated by someone leveraging the platform. And let's be real—doctors will want it too, because healing patients is the whole reason they got into the game in the first place, right?
Not to mention the productivity boost: They'll treat way more people over their careers, which will show up directly or indirectly in their earnings.
Effectiveness rewards passion; productivity rewards the wallet.
What's the incentive left not to opt in?
This dynamic has much wider implications. According to the most recent Federation of State Medical Boards (FSMB) Census of Licensed Physicians, published in August 2025 and covering data through 2024, there were 1,082,187 licensed physicians in the U.S. Hims currently has nearly 1,500 providers onboarded on its platform, mostly in the U.S.—that's about 0.14% of the total. It's a small fraction yet, but they're growing fast.
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We can assume the total provider supply is fixed, if not shrinking with the population, while providers working with Hims will likely keep growing at a higher pace, thanks to the network effect just described. And with that will grow Hims' penetration—and providers' fear of missing out.
What happens when Hims reaches a critical penetration threshold, say, 5–10%?
Big pharma will see sales shrinking because they won't have enough doctors who can prescribe their medicines.
The only way to stay in the game? Onboard on the Hims platform to distribute their products.
Boom!
Once Hims controls prescribing channels, pharma can't ignore it—they'll partner for distribution, just like app stores forced devs to build for iOS/Android.
Expanding into longevity
The Trump administration has openly declared the goal to make healthcare more affordable and accessible, which is great news for Americans—and, indirectly, for the world. The initiatives rolling out align perfectly with companies like Hims & Hers, which share that vision: relatively new, tech-savvy players offering superior experiences at the lowest prices to patients. We want this to happen more and more, with as many entrants as possible shaking things up.
But for Hims to thrive and not get threatened by newcomers, the platform needs to become as sticky as possible.
And here we are: longevity!
Recently, Andrew Dudum announced a series of initiatives that will finally ramp up the stickiness of the platform—ultimately what decides Hims' success against competitors.
In recent years, there has been an explosion of innovative treatments across immunity, recovery and improved metabolic function. We believe that by combining access to comprehensive lab work with a growing network of compounding and peptide facilities, we are well positioned to unlock broader access to thoughtful, proactive interventions that are not just reacting to certain conditions, but focused on helping individuals live longer, healthier lives.
And what business model could better embody this vision than a membership-based approach?
We believe each of these initiatives is laying the foundation for a future where a membership at Hims & Hers will cover the majority of conditions that impact an individual's everyday health…
Eventually, we expect that we will transform our platform from a destination where customers come to treat issues to one where they come to prevent them.
Lab testing is a cornerstone of this new phase. With the recent acquisition of a blood testing lab, Hims is verticalizing its capabilities to make testing simple, affordable, and integrated. The shareholder letter spells it out: "As we move into 2026, we plan to introduce standalone lab testing and expand into longevity-focused care. Together, these additions will help transform our platform from a place people turn to when something’s wrong, to one they turn to proactively to monitor their health and prevent issues before they arise."
The platform's engagement is already growing as these pieces come together.
Customers are increasingly engaging with app-oriented capabilities that remove friction, from tools that help visualize customized titration schedules, to trackers for calorie and water intake that support healthier daily habits. We believe a substantial opportunity is available to continue elevating the experience in a way that enables a consumer to get a holistic overview of their health through the incorporation of data from wearables, lab results, provider interactions, and other app-based tools,
AI agents that support patients 24/7 are the cherry on top.
As Elshenawy explained:
We will be focused on building AI-powered personalized agents that are always on. This will create an end-to-end patient journey powered by AI that will be able to help personalize every interaction and provide 24/7 support to ensure continuous engagement and increase the likelihood of reaching a positive outcome.
Dudum echoed that:
And so I think there's going to be an agent-centric model here that delivers on-demand 24/7 access and support across the stack, whether it's the provider side, the patient side, the pharmacist side, et cetera. But we aim in the next 3 to 6 months to be building out technologies that are immediately improving efficiency, improving engagement, providing support across the stack.
So far, Hims' approach is working well. In weight loss, for instance, customers on personalized GLP-1 plans lost an average of 10.3% of their body weight after six months, with only 25% discontinuing—far better than the 80% dropout rates in some public studies. "Customers frequently citing easier communication with their provider and improved access as two of the biggest benefits," the letter says. "81% said they trust our platform to deliver access to safe and effective care. That trust continues to grow as we expand, with 84% of customers noting they have confidence in Hims & Hers to safely and effectively expand into new areas like hormonal health and longevity."
This isn't just talk—subscribers on personalized plans targeting multiple conditions surged nearly 170% year-over-year to over 500,000 by quarter-end. That's the engaged cohort buying into the vision, the ones who aren't going anywhere.
Conclusion
It appears more and more evident every day that Hims & Hers shouldn't be considered a telehealth platform, but something far beyond that.
Hims aims to be a longevity and health maximization platform powered by AI.
In 20 years from now, either it will be worth trillions if they succeed, or peanuts if they don’t.
Hims remains my highest conviction bet, currently about 25% of my portfolio. With launches in hormonal health this year, lab testing and longevity in 2026, plus international moves like the ZAVA acquisition and a Canada entry timed for generic semaglutide, the flywheel is spinning faster.
If the network effects kick in as expected, this could be spectacular!
As always, here is the “Deep Dive To Date” (DDTD), that is how the stock is performing since my initial deep dive on the February 8th 2025, when the stock price was $42.54.
+36% DDTDSee you in the next update!
The content of this analysis is for entertainment and informational purposes only and should not be considered financial or investment advice. Please conduct your own thorough research and due diligence before making any investment decisions and consult with a professional if needed.