Wall Street remains divided on Hims & Hers Health following an intensified regulatory focus on non-FDA approved GLP-1 medications and the company's decision to withdraw a low-cost compounded weight-loss pill. Morgan Stanley maintained an Equalweight rating and a $40.00 price target on the shares, keeping its view steady even as headlines pressured the stock.
The shares have been volatile, sliding nearly 13% over the past week and trading around $23.02. The stock's move comes after federal regulators signaled they intend to step up enforcement against entities involved with unapproved GLP-1 products.
On Friday, the Food and Drug Administration said it intends to pursue action against non-FDA approved GLP-1 drugs. The agency warned that parties involved in manufacturing, distributing, or marketing compounded GLP-1 products could face enforcement remedies including seizure and injunction.
The FDA also notified that it would restrict access to active ingredients used in the company's $49 per month weight-loss pill and indicated it could refer the company to the Department of Justice if regulatory violations were not corrected. The General Counsel for the Department of Health and Human Services separately confirmed a referral to the DOJ to investigate potential violations of the Federal Food, Drug, and Cosmetic Act.
In response to the regulatory scrutiny, Hims & Hers announced it will discontinue its compounded semaglutide pill offering. The product had been marketed at $49 per month, significantly below the list price for an FDA-approved injectable such as Wegovy, which is priced at $149 per month. Company statements note the compounded pill had not been reviewed or approved by the FDA for safety or effectiveness.
Regulators emphasized that while compounding is allowed under limited circumstances, marketing compounded products in ways that imply equivalence to FDA-approved therapies can be misleading. The enforcement language from the agency underscores heightened scrutiny around access to GLP-1 active pharmaceutical ingredients in non-approved compounded drugs and explicitly named Hims & Hers among companies of interest.
Beyond the GLP-1 episode, Hims & Hers has continued to expand its healthcare offerings. The company recently introduced a multi-cancer screening blood test in partnership with GRAIL, Inc., a test the company says can detect signals associated with more than 50 types of cancer, including cancers for which routine screening is not currently recommended such as pancreatic and ovarian cancers.
On valuation and fundamentals, Hims & Hers retains a market capitalization of approximately $5.2 billion and reported strong top-line momentum, with revenue growth of 78%. The shares trade at a price-to-earnings ratio of about 42.7. The company is due to report quarterly results on February 23.
Analyst reactions to the regulatory and commercial developments have varied. Bank of America Securities lowered its price target from $26.00 to $21.00 and kept an Underperform rating. Morgan Stanley, while maintaining its Equalweight rating and $40.00 target, highlighted a notable slowdown in revenue growth and projects additional deceleration - forecasting growth of 17% in 2026 and 15% in 2027, which Morgan Stanley says falls below consensus expectations.
Market-focused valuation analysis suggests the shares may be somewhat elevated versus a calculated Fair Value. Investors and subscribers to equity research services have access to further analytical tools and notes to assess the stock's positioning relative to intrinsic value measures.
Key dates and metrics referenced in this coverage:
- Recent share price approximately $23.02 after a near 13% decline over the prior week.
- Market capitalization roughly $5.2 billion.
- Reported revenue growth of 78% and a P/E ratio near 42.7.
- Scheduled earnings report on February 23.
The near-term outlook for Hims & Hers will likely hinge on the company's ability to navigate regulatory expectations around compounded products, sustain revenue growth in the wake of the product discontinuation, and meet or revise guidance when earnings are released.