Hims & Hers Health, the telehealth firm that built much of its recent momentum on sales of compounded GLP-1 weight-loss medications, is under intense pressure as regulatory action and litigation threaten a core revenue stream at the same time the company is incurring higher costs to expand internationally.
The company recently pulled back on a plan to offer a $49 version of Novo Nordisk’s newly introduced Wegovy pill after the U.S. Food and Drug Administration referred the matter to the Department of Justice and warned it might limit the ingredients pharmacies are allowed to use when compounding their own versions. Hims has also disclosed that it became aware in February of an investigation by the U.S. Securities and Exchange Commission.
Those developments come while Hims is allocating capital and managerial attention to grow beyond the U.S., including entry into the U.K. and a planned purchase in Australia and Japan. Three analysts said the combination of regulatory risk, litigation and rising international costs makes it uncertain whether the company can hit its growth projections.
CEO Andrew Dudum has maintained that the company can continue its weight-loss business despite regulatory pressure and has pledged to adjust the firm's model to accommodate patient demand "even in a draconian scenario of compounding GLP-1s not being there." Management has projected revenue growth of more than 15% in 2026, a notable slowdown from the 59% reported growth in 2025.
Investor confidence has shifted since Hims’ quarterly results call on February 23. Four analysts cut their share price targets after that call, reducing the mean target to $20.70 from $29.42, according to LSEG data. The stock closed at $14.52 on Friday.
"We see a lot of question marks on (Hims), including litigation with Novo Nordisk and potential regulatory changes to the compounding industry," said Kadyn Kim, an analyst at Morningstar.
Novo Nordisk has filed suit against Hims over compounded versions of its Wegovy and Ozempic drugs, both of which use the active ingredient semaglutide. Under U.S. rules, compounders are permitted to create personalized copies of drugs but are not allowed to mass-produce them; the legal and regulatory debate centers on where Hims’ practices cross that line.
In filings and public comments, Hims has acknowledged the uncertainty around how regulators might proceed. Two industry experts said the FDA could respond by adding semaglutide to its "do-not-compound" list, a designation used when the regulator finds safety, complexity or efficacy concerns that justify limiting compounding for an entire drug product. The FDA might also revise separate lists that identify which bulk ingredients are acceptable for personalized compounding - lists that have not previously been updated to explicitly address semaglutide despite its widespread use.
Rosalie Hoyle, a research scientist at health consultancy Avalere, said she expects the FDA to update or change its compounding guidance documents this year. "The FDA could use it as an avenue to identify potential safety risks of using the active ingredient in compounding," she added.
Analysts warn that the duration and scope of federal inquiries are unpredictable. "There’s always some risk they might find something else," said Jailendra Singh, an analyst at Truist, noting the unknowns posed by ongoing investigations.
At the same time, Hims is betting on international acquisitions to broaden its product mix away from its U.S. compounded-GLP-1 business. The company completed a purchase of U.K.-based Zava six months ago and has announced plans to spend up to $1.15 billion to acquire Australia’s Eucalyptus, which also operates in Japan. Both Zava and Eucalyptus offer branded GLP-1 products; Hims has said Eucalyptus does not provide compounded versions.
Beyond weight-loss medications, those platforms also offer services in mental health and sexual health, which could help Hims diversify revenue if the company successfully integrates those businesses. Two analysts said the non-weight-loss offerings provide a pathway to reduce dependence on GLP-1 treatments, but only if integration is executed effectively.
For now, the cost of building the international footprint is weighing on profitability. During its February earnings call, Hims warned that its weight-loss business would face a $65 million headwind in the first quarter. Management has linked the weight-loss segment to a long-term target of $6.5 billion in revenue by 2030, but near-term margins are under pressure while the company scales overseas.
Chief Financial Officer Yemi Okupe acknowledged that international markets carry higher operating costs, and said the company expects that challenge to ease as brand equity and scale grow in new territories.
What this means for markets and sectors
- Telehealth and digital health companies face scrutiny when product offerings rely on ambiguous regulatory frameworks for compounded drugs.
- Pharmaceutical manufacturers and branded drug sellers are directly affected by litigation and regulatory actions that target the compounding ecosystem.
- International expansion can dilute near-term margins, especially for consumer health platforms building brand and operational capacity in new markets.
The coming months are likely to reveal whether Hims can pivot quickly enough to protect revenue and margins, or whether the combination of legal battles, regulatory change and acquisition costs will delay the company’s path to sustainable, diversified growth.