Hims & Hers Declines - How The GLP-1 Market Shift Affects Growth

Core Insights - The article emphasizes a conservative investment strategy, allocating 90% to stable investments and 10% to growth opportunities for balanced returns [1] Valuation Framework - The base valuation framework projects free cash flows over a 9-year period, starting from a baseline year, applying consistent annual growth rates [1] - Cash flows are discounted using a rate calculated through CAPM, considering both time value and risk factors [1] - Terminal value is calculated by projecting Year 9 cash flows and applying a sustainable long-term growth rate, assuming steady growth patterns and discount rates [1] Pharmaceutical Revenue Model - The revenue model indicates a linear market adoption from 10% initial uptake to full penetration, followed by an 8% annual decline while maintaining at least 40% of peak levels [1] - Revenue calculations are based on patient numbers, market penetration, and annual treatment costs, with operating and production costs scaling proportionally with sales volume [1] - The final valuation incorporates success probability factors and time-adjusted cash flows using standard discount rates [1]