The telemedicine platform Hims & Hers is navigating one of the most turbulent stretches in its history, caught between a widening regulatory offensive and an aggressive push into the booming weight-loss drug market. Investors, for now, appear willing to give management the benefit of the doubt.
Shares climbed roughly 8% on Monday to €26.08, clawing back a portion of the steep losses sustained in July. The rebound comes even as the company contends with a lawsuit filed by the Federal Trade Commission alongside the states of California and Utah. The complaint, lodged last Wednesday at the US District Court for Northern California, accuses the company of deceptive billing practices and improper handling of sensitive health data.
At the heart of the allegations is the use of tracking pixels from platforms including Meta and Snap. Regulators claim Hims & Hers transmitted sensitive patient information to advertisers through these tools, contradicting the company’s marketing promise of services that are “100% online, private and secure.” The government contends this data sharing occurred without explicit user consent and was deployed for targeted advertising purposes.
The FTC also takes issue with how the company acquired customers. According to the complaint, users were drawn in by promises of a “free consultation,” only to find themselves enrolled in subscriptions with charges appearing before any actual physician visit. The company is further accused of deliberately complicating the cancellation process.
Hims & Hers has dismissed the allegations as baseless, pointing to safeguards such as the separation of patient data from marketing operations and the use of hashing techniques to preserve anonymity. The company had already set aside $15 million for litigation-related expenses back in May, an acknowledgment that legal exposure was building well before the formal complaint landed.
Rather than retreat, management is doubling down on its most promising growth avenue. The company is significantly broadening its catalog of GLP-1 medications, adding Eli Lilly’s Zepbound, Mounjaro and Foundayo to its platform, alongside Novo Nordisk’s Ozempic and Wegovy. CEO Andrew Dudum has framed the offering as a subscription-style model akin to Netflix, with the goal of fostering long-term patient relationships rather than one-off transactions.
Should investors sell immediately? Or is it worth buying Hims & Hers?
Pricing for the new treatments is tiered. Zepbound starts at $199 per month, while Mounjaro can reach up to $1,899 monthly. New customers pay an introductory fee of $39 for the first month, which then rises to $149. The company is also paying attention to presentation: medications ship in premium frosted-glass containers, an effort to strip away the stigma attached to medical treatments and encourage adherence.
The market’s reaction to these competing narratives has been volatile. Friday’s regular session closed with a gain of 3.07% at €24.16, though the stock remains roughly 55.90% below its 52-week high — a stark reminder of how much confidence has eroded amid the ongoing investigation.
BofA Securities has nevertheless raised its price target to $37, signaling continued conviction in the platform’s growth story. The bank points to the strategic shift toward branded pharmaceuticals as a key catalyst. The stock is now approaching its 200-day moving average of €27.71, a technical level that could attract further buying if breached.
Attention now turns to the second-quarter earnings report due at the end of August. Analysts project revenue of approximately $699 million, with the operating margin drawing particular scrutiny following a significant loss in the prior quarter. The market is looking for evidence that the company can stabilize its finances while the legal saga plays out.
Adding another layer of uncertainty, the law firm Bronstein, Gewirtz & Grossman has announced it is investigating potential securities violations. That development did little to deter buyers on Monday, but it underscores the breadth of legal headwinds the company now faces.
The central question for investors is whether the momentum in obesity-care therapies can outpace the financial and reputational costs of the FTC action. With the earnings report just weeks away, management will need to demonstrate that the growth engine is firing on all cylinders — and that the legal noise is just that.
Ad
Hims & Hers Stock: Buy or Sell?! New Hims & Hers Analysis from August 3 delivers the answer:
The latest Hims & Hers figures speak for themselves: Urgent action needed for Hims & Hers investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from August 3.
Hims & Hers: Buy or sell? Read more here...
