Hims & Hers (HIMS) stock has crash more than 25% in recent sessions after Novo Nordisk (NVO) filed a sweeping patent-infringement lawsuit targeting the company’s semaglutide offerings.
This legal punch follows a U.S. Food and Drug Administration (FDA) crackdown on unapproved GLP-1 compounding, forcing HIMS to abruptly abandon its new $49 oral Wegovy alternative.
Year-to-date, Hims & Hers stock has now lost nearly 45%, dragging its relative strength index (14-day) into deeply oversold territory.
BofA analysts recommend caution in buying HIMS stock on recent weakness, as the Novo Nordisk lawsuit introduces a material risk the market hasn’t fully priced in yet.
While compounding has been a high-margin growth engine for Hims & Hers, the transition to a hostile legal environment, including a DOJ referral, suggests this business is now unsustainable, they added.
According to the investment firm, legal defense costs and potential for a permanent injunction on all GLP-1 products warrant a complete re-evaluation of the company’s premium.
BofA maintained its “Underperform” rating on Hims & Hers and lowered its price objective to $13, indicating potential downside of another 32% from here.
In their research note, BofA analysts also said pivoting away from high-margin compounded drugs requires that HIMS invests heavily in talent and supply chain verticalization.
However, this could lead to negative earnings revisions in 2026, according to the analysts.
What’s also worth mentioning is that NVO’s testing allegedly found impurities of up to an alarming 86% in certain compounded samples, which may irreparably damage the HIMS brand and lead to a mass exodus of its subscriber base.
Even from a technical perspective, Hims & Hers shares are trading firmly below their key moving averages (MAs), indicating the downward momentum could sustain in the near-term.
Other Wall Street firms, however, disagree with HIMS shares, seeing the ongoing selloff as rather overdone.
