A class action lawsuit was filed against LifeMD (LFMD) by Levi & Korsinsky on August 27, 2025. The plaintiffs (shareholders) alleged that they bought LifeMD stock at artificially inflated prices between May 7, 2025, and August 5, 2025 (Class Period) and are now seeking compensation for their financial losses. Investors who bought LFMD stock during that period can click here to learn about joining the lawsuit.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
LifeMD is a telehealth company offering the most patient-centric healthcare in the world. It engages in the provision of a platform that supposedly delivers “patient-centric care” by allowing users to access telehealth, labs, and pharmacies in one place.
The company’s claims about its competitive position and future expectations are at the heart of the current complaint.
LifeMD’s Misleading Claims
According to the lawsuit, LifeMD and two of its senior officers (the Defendants) repeatedly made false and misleading public statements throughout the Class Period. In particular, they are accused of omitting truthful information about the company’s competitive position and other issues from SEC filings and related material.
At the beginning of the Class Period, LifeMD’s CEO said during an earnings call that the company grew in all areas during the quarter, highlighted success in its weight management program, and stated that it was expected to exceed both sales and profit expectations for the whole year.
He also said that LifeMD made new partnerships with Eli Lilly’s (LLY) LillyDirect and Novo Nordisk’s (NVO) NovoCare, which help the company offer easier and more affordable access to popular GLP-1 medications. He highlighted that LifeMD is the only telehealth service in the U.S. that can provide live doctor care and cash-pay access to both Wegovy and Zepbound medications.
He emphasized that, combined with LifeMD’s direct-to-patient pharmacy, specialized nationwide provider network, and pharmacy benefits infrastructure, the company had created a strong competitive advantage in virtual obesity care.
Finally, the CEO stated in the same call that LifeMD is set for a strong start to 2025. Its first quarter results show focused progress on the company’s key goals and provide greater confidence for the rest of the year.
However, subsequent events (detailed below) revealed that the defendants were reckless in raising LifeMD’s 2025 guidance, considering that they had not properly accounted for rising customer acquisition costs (CAC) in LifeMD’s RexMD segment as well as for Wegovy and Zepbound.
Plaintiffs’ Arguments
The plaintiffs maintain that the defendants deceived investors by lying and withholding critical information about the company’s business and prospects during the Class Period. Importantly, the defendants failed to inform investors that LifeMD’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
The information became clear after the market closed on August 5, 2025, when LifeMD issued a press release for the second quarter of 2025. The Company’s CFO explained that due to some temporary challenges facing our Rex MD business, which were largely resolved, LifeMD was revising its full-year 2025 guidance for revenue and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to reflect the impact. However, the company still expected strong year-over-year growth in both revenue and adjusted EBITDA. Following the news, LFMD stock collapsed 44.9%.
To conclude, the defendants failed to inform investors about the true extent of the CAC expenses on LifeMD’s business, operations, and prospects. Due to these issues, LFMD stock has lost more than 45% over the past three months.
