Shares of Hims & Hers Health (NYSE: HIMS) plunged nearly 10% in regular trading on Tuesday as investors digested a wave of analyst price-target cuts, primarily driven by mounting legal and regulatory risks tied to the company’s compounded weight-loss offerings.
The selloff followed revised assessments from Canaccord Genuity and BofA Securities after Novo Nordisk (NYSE: NVO) filed a lawsuit accusing the telehealth company of patent infringement.
Novo alleges that Hims & Hers engaged in mass marketing of unapproved versions of its semaglutide-based medications, thereby intensifying scrutiny of the company’s business practices.
The legal action stems from Hims & Hers’ brief announcement last Thursday that it would offer compounded oral semaglutide through its platform. Although the company reversed course shortly thereafter, Novo Nordisk filed suit on Monday, linking the short-lived rollout to broader concerns over intellectual property protection and regulatory compliance in the rapidly expanding GLP-1 market.
In addition, regulatory pressure has escalated. The U.S. Food and Drug Administration has indicated plans to restrict GLP-1 active pharmaceutical ingredients used in compounded drugs that have not received FDA approval. By specifically naming companies engaged in large-scale marketing of such products—including Hims & Hers—the agency added another layer of uncertainty around the company’s compounded GLP-1 business.
Analyst Responses and Stock Performance
Against this backdrop, analysts reassessed their outlooks. Canaccord Genuity slashed its price target on Hims & Hers to $30 from $68 while maintaining a “Buy” rating. Analyst Maria Ripps said the lawsuit introduces operational uncertainty. However, she emphasized that the firm has not yet revised its financial forecasts.
Ripps also cited recent share-price weakness. Since a February 5 announcement, Hims & Hers stock has fallen roughly 20%, compressing its revenue multiple from 2.3x to 1.9x. While she suggested that much of the legal risk may already be priced in, she cautioned that ongoing litigation could continue to fuel volatility.
BofA Securities took a more bearish stance, cutting its price target to $13 from $21 and reiterating an “Underperform” rating. This move underscores the growing divergence in analyst expectations as the legal and regulatory landscape continues to evolve.
As of the latest update, Hims & Hers Health (NYSE: HIMS) shares were trading at $17.45, down more than 76% from their 52-week high of $72.98 and about 46% lower year to date. The company currently carries a market capitalization of approximately $3.97 billion.
