Hims & Hers stock sinks after Q3 results, outlook disappoints

What happened: Hims & Hers Health ( HIMS ) shares fell as much as 19% on Tuesday after the telehealth company reported third quarter results and issued a weaker-than-expected revenue forecast for the fourth quarter.

What's behind the move: third quarter revenue rose 49% year over year to $890.4 million, roughly in line with estimates according to Bloomberg data. Gross margin dropped to 57% from 74% a year earlier, while subscriber growth also missed expectations.

The company forecast fourth quarter revenue in a range of $875 million to $895 million, below the $955.1 million analysts expected. Analysts pointed to the weaker outlook and mounting uncertainty around the company's margins as key concerns.

What else you need to know: Hims & Hers Health stock has been volatile this year, falling after a period of recovery as regulatory and legal challenges surrounding its compounded GLP-1 weight-loss drugs weighed on shares.

The company has since shifted away from copycat weight-loss medications and instead pursued partnerships with pharmaceutical manufacturers.

In late July, the company faced another challenge when the FTC filed a lawsuit against it, alleging that it shared private health data with advertisers Meta ( META ) and Snap ( SNAP ) and made subscription cancellations difficult. Hims & Hers has rejected the claim and vowed to fight it.

Year to date, the stock is down roughly 38%.