LifeMD Faces Lawsuit Over Alleged Misleading Statements
Telehealth firm accused of providing a false picture of its financial health, leading to significant investor losses after a sharp guidance cut.
LifeMD (NASDAQ: LFMD), a direct-to-patient telehealth company, is facing a federal securities fraud class action lawsuit alleging that the company and its executives misled investors about its financial health and growth prospects. The lawsuit, filed by Hagens Berman, centers on claims that the company painted an overly optimistic picture of its business before a dramatic reversal that sent its stock price tumbling.
The legal action alleges that between May 7 and August 5, 2025, LifeMD failed to disclose significant business challenges. These included rising customer acquisition costs in its RexMD segment and higher-than-expected refund rates in its weight management business. This news comes after a period where the company had been projecting strong growth, for its full-year revenue and adjusted EBITDA.
The situation came to a head on August 5, 2025, when LifeMD announced its second-quarter results. The company not only missed revenue and earnings per share estimates but also drastically cut its full-year guidance. During the subsequent earnings call, management acknowledged the very issues the lawsuit claims were previously undisclosed: “temporary elevated customer acquisition costs” and problems with patient refunds. The market’s reaction was swift and severe, with following the announcement.
This is not the first time LifeMD has faced legal challenges. The company recently settled a separate class-action lawsuit related to the alleged with third-party tech companies like Facebook and Google. While that case has been resolved, this new securities fraud lawsuit puts the company’s investor communications and corporate governance back under a microscope.
Multiple law firms are now encouraging investors who suffered significant losses to seek lead plaintiff status in the ongoing securities fraud case, with deadlines in late October 2025. The lawsuit seeks to recover damages for investors who purchased LifeMD securities during the specified period and were allegedly harmed by the company's misleading statements. The legal proceedings will be closely watched by investors and the broader telehealth industry, as the outcome could have significant implications for LifeMD's future and investor confidence in the rapidly evolving digital health market.