Hello Global Investors!
Welcome to the 3rd and final part of my Hims and Hers Deep Dive.
In Part 1, we explored their business model, GLP1 shortage, and subscriber statistics!
Meanwhile, in Part 2, we looked Hims and Hers management, competitors, and risks.
I recommend people give them a read before continuing further!
Today we will look at Hims and Hers opportunities, valuation, and financials!
Let’s go!
1. Opportunities
2. Financial Analysis
3. Valuation
4. Conclusion
1. Opportunities
Let’s look at the biggest opportunities for Hims to grow the business!
Obesity
As the world went through the Industrial Revolution, its ability to produce affordable food exploded. Cheap food significantly reduced the number of starving and malnourished people. However, it also created a new issue, obesity.
The US is the fattest country in the world, with more than 40% of adults considered overweight or obese.
For decades, diet and exercise were the only effective remedies for this issue. While it remains the most effective solution, many people lack the willpower for it.
In some sense, Obesity has become a neurological and mental condition!
But as a result of the GLP1 revolution, for the first time in our history, these food addicts have an effective pharmaceutical solution!
GLP1s are hormonal medications that work by essentially tricking a patient’s brain into not being as hungry and not enjoying food as much.
As you can see in the chart above, researchers at Grand View Research forecast the US obesity treatment market to grow with a 24.2% CAGR to reach $48.5B by 2030!
The majority of this market will go to large pharmaceutical companies such as Novo Nordisk and Eli Lilly. However, the market is so massive that even capturing 5% of it could generate $2.4B in revenue for Hims.
Ozempic, possibly the most famous GLP1 drug, has patent protections in the US till 2031. Hims will be able to offer generic versions of it through its digital platform.