Hims & Hers Falls 40% After FDA Halts Weight-Loss Drug, $65M Q1 Hit
Hims & Hers stock has plunged 40% YTD to $20, over a 70% drop from its 52-week high after FDA deemed its weight-loss drug unapproved, prompting a halt, patent infringement suit, and DOJ referral. A March settlement makes it a Wegovy distributor, cutting $65M from Q1 revenue guidance of $600M–$625M.
1. Regulatory Crackdown on Weight-Loss Drug
In early 2026, the FDA labeled Hims & Hers’ low-cost compounded weight-loss medication unapproved, forcing an immediate product halt. Novo Nordisk then filed a patent infringement suit and HHS referred the company to the DOJ for potential federal drug law violations.
2. Settlement and Business Pivot
In March, Hims & Hers settled with Novo Nordisk, ceasing compounding and becoming a distributor for branded Wegovy. This shift changes Hims & Hers from a high-margin manufacturer to a lower-margin middleman in its weight-loss segment.
3. Financial Impact and Guidance Miss
Q4 2025 earnings beat estimates, but management guided Q1 2026 revenue to $600M–$625M versus analyst expectations of $653M, reflecting a $65M hit from regulatory shipping changes. The revenue outlook rattled investors and contributed to a stock slide.
4. Valuation Reset and Upside Potential
With trailing revenue of $2.35B and shares at $20, Hims & Hers now trades at a 2x P/S multiple, down from a historical median of 3.3x. A re-rating to the median multiple could imply roughly 50% upside from current levels.