What Happened?
Shares of telehealth company Hims & Hers Health (NYSE: HIMS) jumped 3.5% in the morning session after investors focused on the company's strong growth prospects, which appeared to overshadow recent regulatory challenges.
The telehealth company showed compelling potential, with earnings posting a very large increase over the previous year and revenue forecasted to grow faster than the broader U.S. market. This positive outlook, however, was set against a backdrop of recent headwinds. The FDA had issued a warning concerning misbranded compounded drugs. Additionally, a partnership with pharmaceutical giant Novo Nordisk was terminated because of safety concerns, a development that had previously affected investor confidence. Despite these issues, the market seemed to prioritize the company's expansion in men's health and its fundamental growth story.
After the initial pop the shares cooled down to $57.81, up 2.9% from previous close.
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What Is The Market Telling Us
Hims & Hers Health’s shares are extremely volatile and have had 99 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 6.5% on the news that the U.S. Food and Drug Administration (FDA) sent the company a warning letter regarding “false or misleading” claims about its compounded semaglutide products.
The letter, dated September 9, alleged that the telehealth company's marketing implies its weight-loss products are equivalent to FDA-approved drugs like Ozempic and Wegovy, which they are not. The agency highlighted that compounded drug products are not approved by the FDA and stated that Hims & Hers' claims violate the Federal Food, Drug, and Cosmetic Act. Regulators gave the company 15 working days to outline the steps it will take to address the violations. The FDA warned that failure to do so could result in legal action, including seizure and injunction, creating significant regulatory risk for the company.
Hims & Hers Health is up 129% since the beginning of the year, but at $57.81 per share, it is still trading 15.9% below its 52-week high of $68.74 from February 2025. Investors who bought $1,000 worth of Hims & Hers Health’s shares 5 years ago would now be looking at an investment worth $5,260.
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