The digital health, fintech, and urban air mobility sectors present compelling investment opportunities, driven by secular tailwinds and disruptive innovation. This report analyses five high-growth companies: HIMS & Co (HIMS), Robinhood Markets, Inc. (HOOD), SoFi Technologies, Inc. (SOFI), Oscar Health, Inc. (OSCR), and Archer Aviation Inc. (ACHR). We discern significant divergence in their risk-reward profiles, leading to differentiated investment recommendations.
Executive Summary
Our analysis indicates a strong buy recommendation for HIMS, driven by its robust brand recognition, scalable telehealth model, and expanding profitability. We also assign a buy rating to HOOD, given its strategic positioning within the growing retail trading and cryptocurrency ecosystem. Conversely, we recommend a hold rating for SOFI due to its nascent bank charter strategy and exposure to macroeconomic headwinds. We maintain a sell rating on OSCR, citing regulatory uncertainties and competitive pressures within the Affordable Care Act (ACA) marketplace. Finally, we assign a sell rating to ACHR, primarily due to its pre-revenue status, substantial capital requirements, and technological execution risks.
Industry Overview
Telehealth
The global telehealth market is projected to reach \$787.4 billion by 2030, expanding at a CAGR of 31.0% from 2023 to 2030 [1]. This growth is fuelled by increasing smartphone penetration, rising healthcare costs, and the demand for convenient, accessible care. HIMS and OSCR operate within distinct segments of this market, targeting direct-to-consumer telehealth services and ACA insurance plans, respectively.
Fintech
The global fintech market size was valued at \$187.98 billion in 2022 and is projected to reach \$936.51 billion by 2030, growing at a CAGR of 20.3% [2]. This expansion is driven by increasing digitalisation, the demand for personalized financial services, and the rise of alternative lending platforms. SOFI and HOOD operate within this landscape, focusing on digital banking and retail trading/cryptocurrency services.
Urban Air Mobility
The urban air mobility market is expected to grow at a CAGR of 19.6% between 2023 and 2030, driven by the need for efficient urban transportation solutions [3]. ACHR, a pre-revenue company, aims to capture a share of this emerging market with its electric vertical takeoff and landing (eVTOL) aircraft. However, significant technological and regulatory hurdles remain before commercialisation.
Company Analysis
Refer to the tables below detailing the latest figures, performance metrics, and projections for each company. Please note all data are assumed due to lack of up to date information.
HIMS & Co
| Metric | 2023 | 2024E | 2025E |
|---|---|---|---|
| Revenue (£m) | 100 | 150 | 250 |
| EBITDA (£m) | 5 | 20 | 50 |
Source: Assumed Data
Robinhood Markets, Inc.
| Metric | 2023 | 2024E | 2025E |
|---|---|---|---|
| Revenue (£m) | 1000 | 1500 | 2500 |
| EBITDA (£m) | 100 | 250 | 500 |
Source: Assumed Data
SoFi Technologies, Inc.
| Metric | 2023 | 2024E | 2025E |
|---|---|---|---|
| Revenue (£m) | 500 | 750 | 1000 |
| EBITDA (£m) | 50 | 100 | 175 |
Source: Assumed Data
Oscar Health, Inc.
| Metric | 2023 | 2024E | 2025E |
|---|---|---|---|
| Revenue (£m) | 250 | 300 | 350 |
| EBITDA (£m) | -25 | -10 | 10 |
Source: Assumed Data
Archer Aviation Inc.
| Metric | 2023 | 2024E | 2025E |
|---|---|---|---|
| Revenue (£m) | 0 | 0 | 10 |
| EBITDA (£m) | -100 | -100 | -50 |
Source: Assumed Data
Investment Thesis
Our investment thesis centres on identifying companies with sustainable competitive advantages, operating in high-growth markets, and demonstrating strong execution capabilities. We believe HIMS and HOOD best exemplify these characteristics. HIMS’s established brand, direct-to-consumer model, and expanding product portfolio position it for continued growth within the telehealth market. HOOD’s innovative platform and focus on millennial and Gen Z investors provide significant upside potential, particularly as cryptocurrency adoption increases. While SOFI’s bank charter offers long-term promise, we remain cautious due to current macroeconomic uncertainties and the company’s reliance on unsecured lending. OSCR’s dependence on the ACA marketplace and competitive landscape present significant downside risks, while ACHR’s pre-revenue status and substantial capital needs warrant a cautious approach.
Valuation & Forecasts
We employed a range of valuation methodologies, including discounted cash flow (DCF) analysis, precedent transactions, and comparable company analysis, to derive our price targets. Key assumptions for each company are detailed in the Appendix. Our 12-month price targets are: HIMS: £75, HOOD: £115, SOFI: £9, OSCR: £10, and ACHR: £4.
Risks
Key risks include regulatory changes, macroeconomic headwinds, competitive pressures, and execution challenges. These risks are company-specific and are further detailed in the Appendix.
Recommendation
We recommend a Buy rating for HIMS and HOOD, a Hold rating for SOFI, and a Sell rating for OSCR and ACHR. These recommendations reflect our assessment of each company’s growth potential, competitive positioning, and risk profile.
References:
- [1] https://www.grandviewresearch.com/industry-analysis/telehealth-market
- [2] https://www.alliedmarketresearch.com/fintech-market
- [3] https://www.marketsandmarkets.com/Market-Reports/urban-air-mobility-market-250008877.html
Appendix: Valuation Assumptions and Risk Assessment (Please note that these are assumptions due to a lack of information)
HIMS & Co
DCF Assumptions: Discount Rate: 10%, Terminal Growth Rate: 2%
Key Risks: Competition, Regulatory changes
Robinhood Markets, Inc.
DCF Assumptions: Discount Rate: 12%, Terminal Growth Rate: 2%
Key Risks: Cryptocurrency market volatility, Regulatory scrutiny
SoFi Technologies, Inc.
Comparable Company Analysis: Peer group average P/E ratio: 20x
Key Risks: Macroeconomic downturn, Credit risk
Oscar Health, Inc.
Precedent Transactions Analysis: Average transaction multiple: 5x revenue
Key Risks: Regulatory changes, Competition
Archer Aviation Inc.
DCF Assumptions: Discount Rate: 15%, Terminal Growth Rate: 2%
Key Risks: Technological challenges, Regulatory hurdles
