The U.S. Federal Trade Commission (FTC), along with Utah and California, has filed a lawsuit against Hims & Hers Health (NYSE: HIMS) for allegedly deceptive privacy practices, including sharing sensitive consumer health information with third-party ad platforms like Meta and Snap. The lawsuit was filed on July 29 in the Northern District of California.
Despite this legal challenge, Hims & Hers shares have seen a significant increase of 29% since the FTC’s announcement, and the company is well-positioned with strategic agreements, including one with Novo Nordisk that resulted in over 125,000 Wegovy shipments in Q1, contributing to its revenue growth potential. The company’s stock has risen more than 22% since May 5, showing a total increase of 121% since its year-to-date low on February 27.
Hims & Hers is set to report Q2 earnings on August 10, amid scrutiny from analysts, who currently hold a consensus Hold rating on the stock. The stock is heavily shorted, with short interest at 30.07% and institutional buying considerably decreased, highlighting investor caution regarding the impact of the FTC lawsuit and potential shareholder dilution from a recent $350 million private offering.
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