Last Update 09 Jan 26
Fair value Increased 88%FIGS: Upgraded Outlook Hinges On Strong Brand And Healthcare Apparel Demand
Analysts have lifted their FIGS fair value estimate from US$8.00 to US$15.00, reflecting updated assumptions for revenue growth, profit margins and future P/E, along with a series of recent price target increases from Barclays, Roth Capital, Morgan Stanley, Goldman Sachs and BTIG.
Analyst Commentary
Recent Street research around FIGS has leaned more constructive, with several bullish analysts lifting price targets and initiating positive coverage. While ratings still span the full spectrum from Sell to Buy, the direction of price targets has generally moved higher, which feeds into the higher fair value estimate.
On the more cautious side, Goldman Sachs has a Sell rating but recently adjusted its FIGS price target to US$5.50 from US$5. This signals that even bearish views are being recalibrated, which can be relevant if you are comparing upside or downside scenarios across different research houses.
Elsewhere, one bullish analyst raised their FIGS price target to US$7.50 from US$5.25 after updating their model post Q3 results, while another lifted their target to US$12 from US$10 and kept a Buy rating, pointing to what they described as strong business momentum after a breakout Q3 and positive takeaways from meetings with company leadership.
In addition, BTIG initiated coverage with a Buy rating and a US$9 price target, pointing to a strong brand, encouraging demand trends in the U.S. healthcare apparel market, and a debt free balance sheet as key pillars of their constructive view.
Taken together, the range of price targets, from US$5.50 on the cautious end to US$12 on the more optimistic end, frames how different analysts are thinking about valuation versus execution risk. For you as an investor, that spread highlights both the perceived opportunity and the debate around what is already reflected in the current share price.
Bullish Takeaways
- Several bullish analysts have raised FIGS price targets into a US$7.50 to US$12 band. This lines up with the higher fair value estimate and signals greater confidence in the company’s ability to execute against current expectations.
- The Buy rated research citing strong business momentum after Q3 and positive management meetings points to growing comfort with FIGS delivery on growth plans and margin assumptions already embedded in models.
- BTIG’s Buy initiation at US$9 highlights support for the brand, demand in the U.S. healthcare apparel market, and a debt free balance sheet. All of these factors can matter for valuation resilience if conditions become more challenging.
- Even with a Sell rating still in the mix, the upward move in that bearish price target to US$5.50 suggests that downside scenarios are being reassessed, which can be relevant if you are stress testing your own risk and reward expectations.
What's in the News
- FIGS, Inc. revised its full year 2025 earnings guidance and now expects net revenues to grow approximately 7% year over year, compared with a prior outlook of low single digit growth (Key Developments).
- The company completed the repurchase of 9,872,547 shares, representing 5.83% of shares, for US$48.01 million under its buyback announced on August 8, 2024, with no additional shares repurchased between July 1, 2025 and September 30, 2025 (Key Developments).
- FIGS expanded its partnership with Team USA, committing to outfit more than 150 healthcare professionals at the Milano Cortina 2026 Olympic and Paralympic Winter Games and continuing through the Los Angeles 2028 Games, with a dedicated Team USA Medical Team kit and the debut of its new FIBREx fabric in the Winter Games collection (Key Developments).
Valuation Changes
- The fair value estimate has increased from US$8.00 to US$15.00, indicating a higher assessed value per share based on the updated assumptions.
- The discount rate has risen slightly from 8.43% to 8.62%, indicating a modestly higher required return being applied in the updated model.
- Revenue growth has increased from 5.63% to 8.64%, reflecting a higher assumed pace of top line expansion in the new framework.
- The net profit margin has risen from 5.82% to 6.86%, indicating a higher expected level of profitability in future periods.
- The future P/E has increased from 37.83x to 63.95x, indicating a higher valuation multiple being used for the company’s earnings in the updated analysis.
Key Takeaways
- Rapid international expansion, omnichannel strategies, and strong healthcare brand affinity position FIGS for outsized growth in both customer base and recurring revenues.
- Optimized logistics, sustainable cost reductions, and institutional sales expansion support durable margin improvement and above-expectation earnings potential.
- Heavy reliance on healthcare professionals, rising costs, lack of innovation, intensifying competition, and weak sustainability positioning threaten long-term growth and market relevance.
Catalysts
About FIGS- Together with its subsidiary, FIGS Canada, Inc., operates as a direct-to-consumer healthcare apparel and lifestyle company in the United States and internationally.
- Analysts broadly agree that international expansion in Asia and other regions will support growth, but this likely understates the potential: early wins in Japan and Latin America, the company's technology-enabled regional model, and the targeting of rapidly growing healthcare markets could drive a step change in international revenues and customer acquisition, significantly increasing total addressable market and long-term revenue growth rates.
- The consensus expects improved net margins and engagement via community hubs and omnichannel strategies; however, with nearly 40% of hub traffic from new customers and rapid omnichannel migration post-visit, the store rollout could rapidly accelerate FIGS' customer base and average order value in urban markets, leading to an outsized impact on both revenue and margin leverage well above current expectations.
- FIGS' deep brand affinity with healthcare professionals-demonstrated by record engagement during major campaigns and policy advocacy-positions it to capture an outsized share of long-term, recurring uniform purchases as the healthcare workforce expands, which should drive above-industry growth in both active customers and repeat revenues.
- The growing shift among healthcare organizations and institutions toward quality, brand-transparent apparel creates an opening for FIGS to expand its 'Teams' and institutional sales business globally-an underappreciated growth channel that could drive large-scale, high-margin contracts, accelerating earnings and supporting durable net margin expansion.
- FIGS' success in optimizing its logistics footprint, driving sustainable fulfillment and shipping cost reductions ahead of plan, and ongoing SG&A rationalization provide operating leverage that is not yet fully reflected in earnings estimates, creating room for further net margin upside even if tariffs persist, and improving free cash flow outlook.
FIGS Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- This narrative explores a more optimistic perspective on FIGS compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
- The bullish analysts are assuming FIGS's revenue will grow by 5.6% annually over the next 3 years.
- The bullish analysts assume that profit margins will increase from 1.3% today to 5.8% in 3 years time.
- The bullish analysts expect earnings to reach $39.1 million (and earnings per share of $0.25) by about September 2028, up from $7.2 million today. The analysts are largely in agreement about this estimate.
- In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 37.8x on those 2028 earnings, down from 151.2x today. This future PE is greater than the current PE for the US Luxury industry at 19.8x.
- Analysts expect the number of shares outstanding to decline by 3.85% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 8.43%, as per the Simply Wall St company report.
FIGS Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- FIGS' overreliance on healthcare professionals as its primary customer segment exposes the business to risk if penetration within this niche plateaus or if demand among medical workers weakens, which would limit revenue growth over the long term.
- Intensifying pricing and margin pressure from tariffs and a need to avoid broad price increases due to affordability concerns for customers could constrain FIGS' net margins, especially as tariffs on key sourcing countries like Vietnam and Jordan are set to increase and a significant portion of cost of goods sold is subject to these pressures.
- Growing competition from larger apparel and athletic brands entering the healthcare workwear space may erode FIGS' market share, resulting in slower revenue growth and potentially higher sales and marketing expenses as the company tries to defend its customer base.
- Slowing product innovation, evidenced by a recent decrease in non-scrubwear launches and a core focus that could limit newness, raises the risk of brand fatigue among customers, which could impact repeat purchase rates and long-term earnings growth.
- FIGS faces risk from consumer trends prioritizing sustainability and ethical production, and if it is not perceived as a leader in this area, consumer backlash and preference for more sustainable brands may dampen demand and reduce both revenue and brand equity over time.
Valuation
How have all the factors above been brought together to estimate a fair value?- The assumed bullish price target for FIGS is $8.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of FIGS's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
- However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $8.0, and the most bearish reporting a price target of just $5.0.
- In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $671.2 million, earnings will come to $39.1 million, and it would be trading on a PE ratio of 37.8x, assuming you use a discount rate of 8.4%.
- Given the current share price of $6.65, the bullish analyst price target of $8.0 is 16.9% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystHighTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystHighTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystHighTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
