Should Investors Rethink FIGS After Shares Jump 27.7% and New Partnerships Spotlight Growth?

• Curious whether FIGS is a bargain or just another name on your watchlist? Let’s dig into what the numbers and recent trends signal about where this stock really stands.
• Shares have climbed 27.7% year-to-date and are up 12.7% over the past year, so there's definitely movement worth paying attention to.
• Recently, industry headlines have put a spotlight on FIGS as it expands its direct-to-consumer model and navigates ongoing supply chain challenges. The company has also gotten attention for creative partnerships aimed at broadening its reach with healthcare professionals, which may hint at possible future growth drivers.
• Despite all the excitement, FIGS currently scores 0 out of 6 on our valuation checks. This suggests the market is not currently seeing undervaluation. We'll walk through traditional valuation techniques in this article, so keep reading for a smarter way to piece together the real story behind FIGS’ price.

FIGS scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: FIGS Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a classic valuation technique that estimates a company's worth by projecting its future cash flows and discounting them back to today’s value. This approach helps investors get a clearer view of the business’s potential by looking beyond short-term market swings and focusing on long-term fundamentals.

For FIGS, analysts report a last twelve months Free Cash Flow (FCF) of $36.23 million. Estimates show FCF could reach $49.47 million by the end of 2029, with projections beyond five years extrapolated by Simply Wall St based on observed growth trends and industry data. The next ten years display notable variability, starting with $32.83 million in 2026, spiking to $78.72 million in 2028, then moderating in the years that follow as the business matures.

When all these cash flows are discounted back to their present value, the model lands on an intrinsic value of $2.49 per share. With the current trading price meaningfully above this estimate, the DCF suggests that FIGS stock is about 201.8% overvalued based on these projections.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests FIGS may be overvalued by 201.8%. Discover 862 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for FIGS.

Approach 2: FIGS Price vs Sales

The Price-to-Sales (PS) ratio is often a go-to valuation metric for companies like FIGS, where profitability may not fully reflect the underlying business potential or where operating margins are still evolving. For businesses in growth phases or facing fluctuating profits, the PS ratio can give investors a clearer sense of how the market values every dollar of revenue generated.

Generally, the meaning of a "normal" PS ratio will shift based on growth prospects and perceived risk. Fast-growing or lower-risk companies tend to justify higher PS multiples, while slower or riskier peers might be valued far less per sales dollar.

At present, FIGS trades at a PS ratio of 2.16x, notably higher than the Luxury industry average of 0.65x and its peers at 0.38x. However, these broad benchmarks often miss the mark for individual growth stories or risk profiles. Simply Wall St's proprietary Fair Ratio, calculated here as 1.24x, provides a more tailored perspective. The Fair Ratio considers not only industry averages and peers, but also key factors such as FIGS’ earnings growth outlook, market position, profit margin, and overall risk, giving a more customized valuation assessment.

Comparing FIGS’ current PS multiple of 2.16x to the Fair Ratio of 1.24x suggests the stock trades materially above fair value based on its fundamentals and risk profile.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1408 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your FIGS Narrative

Earlier we mentioned there’s an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your personalized, story-driven approach to investing. It’s where you lay out your perspective on a company by connecting its business story to your forecasts for future revenue, margins, and ultimately, fair value.

This approach lets you ground your investment decision in more than just ratios and models, by linking what you believe about FIGS’ business trajectory directly to numbers you can update and measure over time. Narratives are easy to create on Simply Wall St’s Community page, where millions of investors share and update their perspectives based on the latest news or earnings announcements.

With Narratives, you can see instantly when your estimated Fair Value diverges from the current Price, helping you quickly decide whether to buy, hold, or sell. As new developments unfold, your Narrative updates dynamically so your thesis always stays relevant. For instance, a bullish Narrative on FIGS might anticipate strong global expansion and assign a fair value near $8.00 per share, while a more cautious outlook could see more risk and target $5.00. This shows that even among experts, perspectives and outcomes can vary widely.

Do you think there's more to the story for FIGS? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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