Hims & Hers Faces Headwinds Amid GLP-1 Crackdown and Novo Nordisk Patent Fight

Hims & Hers has been hit hard in rapid succession by regulatory pressure and a patent dispute with Novo Nordisk. Following the withdrawal of a central weight?loss product, the stock slid to a fresh 52?week low. Paradoxically, the stock?s heavy short?selling interest could set up a potential countermove ahead of the upcoming earnings release.

• Trigger: withdrawal of a semaglutide pill after FDA guidance on GLP?1 compounds
• Legal pressure: Novo Nordisk has filed a patent infringement lawsuit, including damages claims
• Next milestone: Q4 results due on February 23
• Support: authorization of a $250 million share repurchase program

The downside momentum stems from a run of negative news over a short period. On February 7, Hims & Hers halted the launch of its compounded semaglutide pill, a product that had only recently entered the market. This followed an FDA communication dated February 6, in which the agency signaled a strong crackdown on unapproved, mass?market GLP?1 compounds.

Two days later, on February 9, Novo Nordisk filed a lawsuit alleging patent infringement. The company seeks to halt sales of compounded copies of Wegovy products and also seeks damages. For investors, the focus shifted decisively from growth narratives to regulatory and litigation risk.

Short-Squeeze Scenario Ahead of the Results

Despite the bleak mood, market observers are weighing a possible short?squeeze as a catalyst for a near?term rebound. Macro Risk Advisors? CEO, Dean Curnutt, describes a setup in which elevated short interest meets a sharply lower stock price, potentially triggering rapid covering. Could such a move materialize before the Q4 release? Curnutt suggests it could, particularly if short?sellers are compelled to unwind their positions.

The scenario centers on the days leading up to the February 23 earnings release. He also points to the options market as presenting asymmetric risk?reward opportunities for speculative long bets, such as Call Spreads.

Should investors sell immediately? Or is it worth buying Hims & Hers?

Targets Fall, Yet Valuation Stays Elevated

Wall Street analysts have adjusted targets downward to reflect the altered risk profile. Citigroup trimmed its price objective to $16.50. Bank of America reduced its target to $21.00 and assigned an Underperform rating.

Even with the share decline, Hims & Hers maintains a market capitalization of roughly $3.8 billion. The next clear read comes on February 23, when the company?s quarterly performance is examined independent of the GLP?1 controversy, and investors will see whether the authorized $250 million buyback program can lend near?term support to the stock.

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