Will the legal expenses associated with the class actions materially affect the company’s earnings guidance for the next quarters?

Answer:

At this stage the lawsuits are still in the pre‑litigation/lead‑plaintiff‑selection phase, and Hims & Hers has not disclosed any estimated liability or accrued provision for legal fees. In its most recent 10‑Q the company reported $0 in “contingencies” related to securities class actions, and management’s earnings guidance for Q3–Q4 2025 was issued before the August 25, 2025 lead‑plaintiff deadline. Absent a disclosed settlement or a court‑ordered judgment, the legal expense line‑item is expected to be immaterial to the forward‑looking earnings guidance that the company has already provided.

Trading implications:

- Short‑term risk: The announcement triggered a sharp sentiment downgrade (‑75) and a modest price dip (≈4‑5% on‑volume). Expect continued volatility as investors monitor the August 25 deadline and any filing of lead‑plaintiff applications.

- Long‑term view: Unless the company later announces a sizeable settlement or must book a material provision (>$10‑15 million), the guidance is unlikely to be revised. Traders can treat the current sell‑off as a potential buying opportunity on pull‑back, but keep a tight stop‑loss (e.g., 6‑7% below current levels) to protect against a surprise adverse ruling.

Actionable watch‑list:

1. SEC Form 8‑K / 10‑Q filings in the next 4‑6 weeks for any newly accrued legal reserves.

2. Lead‑plaintiff filings after Aug 25 – a high‑profile plaintiff could accelerate settlement talks and increase the probability of a material charge.

3. Volume‑weighted average price (VWAP) on the next trading day; if price stays above VWAP, the dip may be exhausted and a short‑cover rally could follow.

In summary, the current class‑action exposure is unlikely to materially alter Hims & Hers’ earnings guidance for the upcoming quarters, but the short‑term price action remains sensitive to any new legal disclosures.