Shares of direct-to-consumer telehealth platform Hims & Hers Health (HIMS 2.18%) have become a runaway freight train. The stock has returned nearly 20-fold returns from its 2022 lows, including a blistering 490% over the past year alone. Those who got in early may have already made life-changing money on this stock.

Its momentum is no fluke. The company has continually touted robust growth, driven by a subscriber base that reached 2 million people in the third quarter of 2024. Those just now getting to know Hims & Hers might wonder whether this is a potential millionaire-maker in the making, or if the stock's about to run out of steam.

Here's what you need to know.

Hims & Hers still has significant upside potential

Hims & Hers is a telehealth platform that offers consultations with healthcare professionals through its smartphone app and website and, if appropriate, prescribes and sells a range of medications and products. The company provides treatments across categories that include skin care, mental health, and sexual health. However, most buzz around Hims & Hers involves its compounded GLP-1 agonist drugs for weight loss.

These drugs have become sensationally popular, to the point that there have been shortages of the patent-protected brand-name versions. Novo Nordisk's semaglutide (Ozempic/Wegovy) remains in shortage, allowing companies like Hims & Hers to sell compounded versions due to loopholes in the existing rules.

While that's where most of the focus is, it's unfair to Hims & Hers because compounded GLP-1 agonist sales represent a minor portion of its broader business. Excluding GLP-1 agonists, Hims & Hers still grew revenue by 40% year over year in Q3 2024. In other words, the rest of the business is growing rapidly, too. That doesn't include expansion into new categories; Hims & Hers announced new nutrition products in November and has hinted at getting into hormone treatments soon.

HIMS Revenue (TTM) data by YCharts.

The company is growing revenue at a staggering pace, and is also profitable based on generally accepted accounting principles (GAAP). While stocks like Palantir Technologies have soared to bubbly valuations (over 55 times next year's revenue estimates), Hims & Hers still trades at just over 5 times next year's revenue estimates -- even after such a remarkable run.

It's logical to conclude that Hims & Hers still has a ton of investment upside.

However, don't look too far into the future

While Hims & Hers is on a phenomenal trajectory, I'd caution against projecting the company's success too far into the future.

The company has undoubtedly enjoyed immense success and garnered considerable attention. Now, it has to show it can sustain it, as the hype potentially attracts more substantial efforts from competitors. Amazon has long shown an interest in consumer healthcare, and while its competing platform hasn't affected Hims & Hers yet, it'd be unwise to dismiss a proven disruptor with such deep pockets.

Hims & Hers must continue to execute and grow outside of compounded GLP-1 agonists, because regulators could order them off the market once the shortages end. Management deserves a ton of credit for its marketing execution. Since the company doesn't sell any proprietary products, it's trying to build a competitive advantage through its branding, and via the proprietary data it collects and uses to personalize treatments for its customers.

Here's the smart way to approach the stock

Is Hims & Hers a millionaire-maker in the making? Yes! Or, at least, it can be. There is a possible future where Hims & Hers is a healthcare giant with millions of users. If that happens, I don't doubt the stock could change lives, even after its epic run thus far.

However, Hims & Hers is no sure thing. (No stock is -- that's why people diversify their investments.) Shares remain reasonably valued at slightly above 5 times next year's revenue estimates, especially given the company's strong and profitable growth. But it's not bad to exercise some restraint and resist the fear of missing out (FOMO) on a stock that's gone very high very quickly.

If you want to buy and hold Hims & Hers, consider dollar-cost averaging, and monitoring its future growth outside of compounded GLP-1 agonists.