Hims & Hers Stock Jumps on Vow to 'Vigorously' Defend Against FTC's 'Baseless Claims'

Hims & Hers Health (HIMS) shares rose over 5% after a previous 15% drop, following the company's vow to vigorously defend against an FTC lawsuit alleging privacy violations and deceptive billing practices. The FTC, joined by Utah and California, accused Hims & Hers of sharing patient data with ad platforms and making subscription cancellations difficult. Hims & Hers dismissed the claims as baseless, citing substantial evidence and established industry standards. Analysts maintain a Moderate Buy rating with an average price target of $29.88.

Shares in telehealth provider Hims & Hers Health (HIMS) popped by more than 5% on Thursday morning after plunging by almost 15% the previous day. This came even after the company, in response to a lawsuit from the U.S. Federal Trade Commission (FTC), vowed to "vigorously defend" itself against the agency's "baseless claims."

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FTC Lawsuit 'Disregards Substantial Evidence'

On Thursday, the FTC, alongside U.S. states Utah and California, dragged Hims & Hers to a California federal court. The consumer protection watchdog alleged that the telehealth provider broke its privacy promise by sharing details about patients' medical conditions with advertising platforms such as Meta (META) and Snap (SNAP).

The lawsuit also accused the company of engaging in "deceptive" billing practices such as enrolling most patients into subscription-based treatment plans without their consent. Hims & Hers also allegedly made it difficult for consumers to cancel their subscription by not "clearly and conspicuously" informing them of when their prescriptions would be refilled each month.

In response, Hims & Hers criticized the lawsuit, noting that it "disregards substantial evidence" the company provided during the agency's almost three-year investigation.

Hims & Hers Accuses FTC of Trying to Manufacture Claims

In a statement issued on Thursday, Hims & Hers further claimed that the lawsuit ignores established state laws and standards in the telehealth industry. The suit also "contorts the law to try to manufacture claims," the firm added.

"Our customers have the information they need to make informed decisions about their care and the use of our services," Hims & Hers noted.

It continued, "And our privacy policy makes clear that they may choose how their data is used, and that information patients share with their healthcare providers is used only in providing care."

Is HIMS Stock a Good Buy Right Now?

On Wall Street, Hims & Hers' shares remain a Moderate Buy based on analysts' consensus rating. This breaks down into four Buys and nine Holds issued over the past three months.

However, the average HIMS price target of $29.88 implies about 14% upside (see HIMS stock forecast here).

FTC Lawsuit 'Disregards Substantial Evidence'

In response, Hims & Hers criticized the lawsuit, noting that it "disregards substantial evidence" the company provided during the agency's almost three-year investigation.

Hims & Hers Accuses FTC of Trying to Manufacture Claims

"Our customers have the information they need to make informed decisions about their care and the use of our services," Hims & Hers noted.

It continued, "And our privacy policy makes clear that they may choose how their data is used, and that information patients share with their healthcare providers is used only in providing care."