How might the outcome of these lawsuits influence the valuation multiples (e.g., P/E, EV/EBITDA) for Hims & Hers Health?

Impact on valuation multiples

The pending securities‑class‑action suits represent a material contingent liability for Hims & Hers Health (HIMS). If the lead‑plaintiff applications are accepted and the plaintiffs ultimately secure a judgment or settlement, the company will have to record a one‑time charge that could run into the high‑hundreds of thousands of dollars (and potentially more if the case expands). That charge will depress net income and EBITDA in the next reporting period, compressing the P/E and EV/EBITDA ratios until the earnings base recovers. In practice, analysts will likely apply a higher “risk‑adjusted” discount rate to the firm’s cash‑flow forecasts, which further widens the spread between HIMS’ current multiples and those of healthier tele‑health peers.

Conversely, if the lawsuits are dismissed or the lead‑plaintiff deadline passes without a filing, the contingent liability evaporates. The market can then re‑price Hims on the basis of its growth trajectory—higher projected revenue, expanding margins from new product lines, and a stronger balance sheet. In that scenario the P/E and EV/EBITDA multiples would expand toward the mid‑20s (P/E) and 12‑15× (EV/EBITDA) that comparable “digital health” companies command, reflecting a lower perceived risk premium.

Trading implications

• Short‑bias until the court’s next filing deadline (Aug 25 2025) if you expect a lead plaintiff to be named and the case to move forward. The risk of a sizable non‑recurring charge justifies a defensive position or a stop‑loss‑protected short.
  
• Long‑bias if you anticipate the deadline will pass without a lead plaintiff—especially if the company can demonstrate that the alleged losses are immaterial to its cash‑flow. A breakout above the 20‑day EMA on the daily chart, coupled with a bounce in volume, could be used as a trigger for a modest long entry, with a stop just below the recent swing low.
  

Monitor the KSF‑Foti communications and any court filings over the next two weeks; a material development will quickly re‑price HIMS and either tighten or expand its valuation multiples.