Why Hims & Hers Health Inc. (HIMS) Crashed On Wednesday?

We recently published a list of AI Stocks Dominate Wednesday’s 10 Worst Performers. In this article, we are going to take a look at where Hims & Hers Health Inc. (NYSE:HIMS) stands against other AI stocks that dominate Wednesday’s worst performers.

Wall Street’s major indices ended in the negative territory on Wednesday as investors parked funds to minimize risks from the resumption of trade war among the world’s largest economies, with a fresh round of tariffs scheduled to be implemented next week.

The tech-heavy Nasdaq fell the hardest, down 2.04 percent, followed by the S&P 500, down 1.12 percent. The Dow Jones declined by 0.31 percent.

According to President Donald Trump, all vehicles made outside of the US would be slapped with a 25-percent tariff.

The broader market downturn spilled over into 10 companies—predominantly AI stocks—further dampened by a cautious outlook on the industry. In this article, we listed Wednesday’s 10 worst performers and detailed the reasons behind their drop.

To come up with the list, we considered only the stocks with $2 billion market capitalization and $5 million in trading volume.

A nurse in a telehealth platform talking with a patient on video call for consultation.

Hims & Hers Health Inc. (NYSE:HIMS)

Hims & Hers tumbled by 9.94 percent on Wednesday to finish at $33.36 each as investors continued to sell off positions after earning a rating downgrade from an investment bank recently.

Last week, Bank of America gave the company a higher price target of $22, up by $1 from $21 previously. However, the new price target became a low blow for the firm, being 34 percent lower than its latest closing price.

Bank of America also assigned an “underperform” rating on HIMS.

Last month, HIMS saw a spike in sales from the Super Bowl event, but investors are now having doubts about its ability to sustain its momentum following the Food and Drug Administration’s (FDA) announcement that the bestselling Wegovy and Ozempic, manufactured by HIMS’ competitor Novo Nordisk, are back in sufficient supply and now out from the shortage list.

It can be learned that HIMS has been making a compounded knock-off version of the two treatments that propelled its sales over the past few years.

Overall, HIMS ranks 4th on our list of AI stocks that dominate Wednesday’s worst performers. While we acknowledge the potential of HIMS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as HIMS but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.