HIMS Stock Posts Worst Day In A Month As Visa Flags Disputes — But Analyst Says GLP-1 Users Are Sticking Around
<img src="https://s3-symbol-logo.tradingview.com/hims-and-hers-health.svg” alt=””>HIMS
Key points:
- Visa placed Hims in a monitoring program following a July surge in disputes.
- Weight-loss memberships accounted for 75% of the company’s credit card disputes.
- The Visa action adds to an FTC lawsuit over subscriptions, cancellations and customer privacy.
Shares of Hims & Hers Health (HIMS) suffered their steepest decline in nearly a month on Monday after global payment technology firm Visa reportedly flagged a surge in credit card disputes related to the company’s weight-loss subscriptions, renewing scrutiny of its billing and cancellation practices
HIMS stockfell 8% on Monday, snapping three straight sessions of gains
Visa Flags Hims’ Credit Card Disputes
Visa placed Hims in its Acquirer Monitoring Program after credit card disputes increased in July, Bloomberg reported, citing internal documents. Stripe, Hims’ payment processor, reportedly informed the company of the decision earlier this month. Hims must bring its dispute rate below 1.5% of transactions and remain under that level for three consecutive months to exit the program
Each dispute will now trigger an $8 surcharge, producing an estimated bill of nearly $75,000 in September. While modest relative to Hims’ overall business, the penalty places fresh attention on the customer experience within its fast-growing weight-loss operation
The business generated 75% of Hims’ credit card disputes, according to the documents. Membership starts at $39 for the first month, then rises to $149, with automatic renewals based on the customer’s selected schedule. Prescription drugs are billed separately, with costs varying by medication and dosage. Hims is reportedly considering clearer notifications about upcoming charges to prevent customers from being caught off guard. The telehealth company has 2.9 million subscribers across weight management, hair loss, sexual health and other treatment categories.
Hims & Hers Battles Subscription And Privacy Claims
The Visa action intensified pressure on Hims just a month after the Federal Trade Commission, Utah and Los Angeles County sued the company over its subscription, cancellation and data-privacy practices
Regulators allege that Hims failed to make recurring subscriptions sufficiently clear, created unnecessary barriers to cancellation and shared private customer information with Meta Platforms and Snap for advertising. The complaint also alleges that some customers were charged immediately after completing an intake form and that cancellations remained difficult even after Hims added an online option
However, Hims has rejected the claims, saying that regulators disregarded evidence supplied during a nearly three-year investigation
Truist Says GLP-1 Users Are Sticking Around
Despite the fresh billing controversy, Truist raised its price target on Hims to $32 from $27, implying a 3% upside from current levels, while retaining a ‘Hold’ rating
Using proprietary card data and Hims’ second-quarter disclosures, Truist refined its outlook across the branded GLP-1, compounded GLP-1 and non-GLP-1 businesses. The firm said deferred compounded GLP-1 revenue likely boosted quarterly results, while the data showed “stronger-than-expected retention” among existing compounded GLP-1 customers
How Do Retail Traders Feel About HIMS?
On Stocktwits, retail sentiment for HIMS flipped to ‘bearish’ over the past week from ‘extremely bullish’ levels amid a 136% jump in 24-hour message volumes
One user said, “$HIMS I guess the news is apparently someone wants a lot of shares, so the push down. End of day it should recover some.”
Another user said, “$HIMS Monday panic sell off Wednesday recover, Thursday run, Friday sell off”
View this Stocktwits post
HIMS stock has declined 30% over the past year
AnalystsStocktwitsUS stocks
Read more from Stocktwits
