What is the potential effect on HIMS’s future revenue forecasts if the lawsuits lead to increased regulatory scrutiny?

Impact on Revenue Forecasts

If the class‑action suits against Hims & Hers (HIMS) trigger heightened regulatory scrutiny—e.g., FDA, FTC, or state health‑authority investigations—the company could face several cost‑inflating constraints: mandatory product recalls, tighter advertising approvals, mandatory data‑privacy upgrades, and possible caps on tele‑health prescribing. These compliance‑related outlays would erode margins and, in the near term, force the firm to defer or scale back growth initiatives (new product launches, geographic expansion, and marketing spend). Consequently, analysts are likely to trim HIMS’s 12‑month revenue guidance by 5‑10 %, reflecting both the direct expense hit and the slower customer‑acquisition pace that typically follows a regulatory “reset” period.

Trading Implications

From a market‑structure perspective, the stock has already priced in the headline‑risk (sentiment –75) and is trading near the lower end of its 6‑month range, with the 20‑day SMA acting as a support level around $4.20. A breach below this technical floor could open the door to a short‑cover rally if the company announces a concrete remediation plan, but the upside is capped until the regulatory path is clarified. In the meantime, a short‑position with a stop just above the 20‑day SMA (≈ $4.30) or a long‑position on a bounce off that level—targeting the next resistance at $4.80—offers a way to capture the volatility while keeping risk limited. Investors should monitor SEC filings, any regulatory press releases, and the upcoming August 25 lead‑plaintiff deadline for clues on the likely scope of enforcement actions.