HIMS’ 34% Pullback Reflects Rising Regulatory Risk

Two words can tank a stock faster than you can say semaglutide: FDA warning. That’s exactly what happened to Hims & Hers Health Inc’s shares, with Hims & Hers stock (NYSE: HIMS) sliding roughly 34% over the last month as investors fled amid regulatory heat and mounting legal concerns.

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A Wild Ride Turns Sour

For much of 2025, Hims & Hers was riding high as one of the high buzz names in direct-to-consumer health. The company’s platform, which delivers telehealth services and pharmaceuticals for everything from hair loss to mental wellness, had attracted growth-oriented investors. But in the past few weeks, much of that optimism has evaporated.

At the center of the sell-off is the company’s controversial push into compounded weight-loss drugs—specifically cheaper versions of semaglutide medications like Wegovy, which are wildly popular but tightly regulated. Hims launched a low-cost alternative, priced around $49 for the first month and $99 per month after, far below branded competitors. That initially sparked excitement, but it didn’t take long for the mood to shift.

Regulators Step In

Recently, the U.S. Food and Drug Administration warned Hims over its semaglutide claims, stating that the company was marketing compounded versions of weight-loss drugs that haven’t been FDA-approved and whose safety and efficacy couldn’t be verified. This isn’t a minor slap on the wrist—such warnings can lead to legal action, product seizures, or injunctions if the company doesn’t adequately address the issues.

That warning rattled investors. Shares initially jumped on the product news, but then slid sharply once the regulatory risk became clear, contributing to the decline. It’s one thing for a stock to fall on disappointing sales; it’s another when the core business model suddenly looks like it might run afoul of federal safety standards.

Legal and Competitive Headwinds

The regulatory trouble isn’t the only pressure on HIMS. The company’s earlier collaboration with Danish drug giant Novo Nordisk—which was meant to expand access to weight-loss treatments like Wegovy—fell apart in mid-2025 amid allegations over deceptive marketing and legal compliance. That split triggered a major sell-off last year, and its legacy still looms over the stock.

Meanwhile, competitors both big and small are circling. Established pharmaceutical companies like Novo Nordisk and Eli Lilly continue to roll out their own GLP-1 medications, and regulatory scrutiny of compounded alternatives is tightening industry-wide. These dynamics feed into investor fears that Hims’ future revenue growth—especially in high-margin prescription verticals—might be more volatile than previously thought.

The Sentiment Shift and What It Means

Investors hate uncertainty, and regulatory warnings plus legal overhang equal uncertainty in spades. Even though Hims & Hers has posted strong revenue growth historically and remains profitable on a diluted EPS basis, the perceived risk of future litigation or tougher oversight has forced many holders to reassess their positions. Shares of HIMS recently hit a 52-week low around $20, reflecting this shift in sentiment.

Part of the downside move also relates to broader volatility in telehealth and subscription-based healthcare stocks—sectors that investors are now scrutinizing more for churn, regulatory risk, and sustainable profitability.

Where Things Stand Now

In short, the roughly 34% drop in HIMS stock over the past month isn’t due to one simple thing like a missed quarter. It’s about a crescendo of regulatory concern, legal risk, competitive pressure, and shaken investor confidence. When a company suddenly looks like it might be on the wrong side of federal drug standards—even if unintentionally—stocks often get sold first and explained later.

For now, Hims & Hers is navigating choppy waters where the future of its weight-loss drug strategy and its relationship with regulators will likely dictate whether sentiment stabilizes or continues to sour.

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