Hims & Hers Health (HIMS) stock declined about 2% yesterday. The fall came after the U.S. Food and Drug Administration (FDA) issued a warning about topical finasteride, a hair-loss treatment sold by telehealth companies such as HIMS. The FDA said patients were not given enough warning about possible side effects.
The FDA highlighted safety risks, citing 32 adverse event reports received between 2019 and 2024. These reports include serious side effects such as depression and suicidal ideation, even after patients stopped using the product.
Also, the warning pointed out potential risks of accidental exposure, especially for pregnant women, as finasteride is unsafe during pregnancy.
While this warning does not prevent Hims & Hers from selling these treatments, it raises questions about their future in the market.
FDA Warning Follows HIMS COO Departure
The FDA warning comes shortly after Melissa Baird, chief operating officer of Hims & Hers, disclosed plans to step down from her current role on April 21. After a decades-long career with the company, Baird intends to transition into an advisory position within HIMS. She plans to stay until a suitable successor is found, ensuring a smooth leadership change.
Importantly, to ensure the company continues to benefit from her expertise, Hims & Hers plans to enter into a long-term agreement with Baird once she moves into her advisory role.
Top-Rated BofA Analyst Bearish on HIMS Stock
Last week, a Top analyst from Bank of America Securities, Allen Lutz, reiterated a Sell rating on HIMS stock with a price target of $22, implying 13.2% downside potential.
The analyst is concerned about the slowing sales growth in March, especially for GLP-1 products. The average transaction value also dropped for the first time in months, raising concerns about sustaining revenue.
Also, the company’s reliance on personalized GLP-1 sales carries legal risks as these drugs are often compounded versions of Novo Nordisk’s (NVO) patented medications like Ozempic and Wegovy. Legal actions from NVO or the FDA could affect future sales.
Is HIMS a Good Stock to Buy?
Turning to Wall Street, HIMS stock has a Hold consensus rating based on five Buys, six Holds, and two Sells assigned in the last three months. At $45.77, the average Hims & Hers stock price target implies an 80.55% upside potential. Shares of the company have gained 18.6% over the past six months.
