Hims & Hers stock plunges 53% as SEC probe and weak forecasts rattle investors
Hims & Hers stock plunges 53% as SEC probe and weak forecasts rattle investors
Hims & Hers stock plunges 53% as SEC probe and weak forecasts rattle investors
Hims & Hers has faced a turbulent start to the year, with its share price dropping nearly 53%. The company's stock now trades at around $13.50, hovering just above its 52-week low. This decline comes as regulators and investors scrutinise its operations more closely.
The troubles follow a period of strong growth in its weight-loss division, which has been a major driver of revenue. However, recent challenges—including regulatory pressure and a weaker-than-expected revenue forecast—have overshadowed its expansion plans.
In late 2025, the company reported a 28% revenue increase for the fourth quarter, reaching nearly $618 million. Earnings per share also exceeded expectations at $0.08. Despite this positive performance, concerns soon emerged.
The U.S. Securities and Exchange Commission (SEC) launched an investigation into the company's public statements about its compounded semaglutide products. These products fall under the weight-loss division, a key area of growth. The SEC's request for information has added uncertainty at a critical time.
Adding to the pressure, Hims & Hers announced a major acquisition in early 2026: the purchase of health platform Eucalyptus for up to $1.15 billion. The deal aims to expand the company's reach into Germany, the UK, Australia, and Japan. However, the acquisition is not expected to finalise until mid-2026, leaving the company to navigate current challenges without its benefits.
Investor confidence took another hit when the company forecasted first-quarter revenue of $600–625 million—below analysts' expectations of around $654 million. Following this outlook, Citigroup and BTIG downgraded the stock, further weighing on its finance.
The company now faces a pivotal period as it works to address the SEC's concerns. Its ability to resolve regulatory issues will be crucial, especially with the Eucalyptus deal still months away from completion. Meanwhile, weaker revenue projections and stock downgrades have intensified pressure on its leadership to stabilise performance.