Is FIGS (FIGS) Undervalued On Raised Earnings Estimates?

Analysts have recently raised earnings estimates for FIGS (FIGS) and upgraded its ranking, which has drawn fresh attention from investors trying to gauge how this healthcare apparel business is being valued.

At a latest share price of US$14.06, FIGS has seen strong momentum build over the past quarter, with a 90 day share price return of 36.11% and a 1 year total shareholder return of 103.77%, even though the 5 year total shareholder return remains down 61.76%.

Seize the momentum in FIGS and compare it with other consumer-focused companies showing strong earnings sentiment using our curated list of 20 high quality undiscovered gems.

Bulls argue FIGS' sharp rebound and upbeat analyst sentiment signal a reset in how this healthcare apparel specialist is priced. Bears point to the long term decline. Which case do the current valuation markers support?

Most Popular Narrative: 2% Undervalued

FIGS is trading close to the narrative fair value of $14.39, with the last close at $14.06. Based on that framework, the market is essentially pricing in only a small discount and leaving limited room for obvious mispricing.

The company, on an absolute basis, is still growing well. Further, it has several growth levers, such as expanding its product range, entering new markets, and leaning into its “TEAMS” offering.

See why 24 investors see FIGS as 2% undervalued.

Result: Fair Value of $14.39 (UNDERVALUED)

Still, the FIGS narrative can break if revenue growth slows more sharply than expected, or if efforts to expand internationally introduce heavier execution and FX risk.

Find out about the key risks to this FIGS narrative.

Another Take On FIGS: Rich On Earnings Multiples

While the FIGS narrative fair value points to only a small discount, the earnings multiple tells a different story. The stock trades on a P/E of 37.7x, far above the US Luxury industry at 16.3x, the peer average at 20.5x, and a fair ratio of 15.7x that the market could move towards. That gap implies meaningful valuation risk if sentiment cools, so how much multiple pressure are you comfortable with?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Sentiment around FIGS is mixed, which is exactly when independent analysis matters most. Move quickly, review the underlying data, and shape your own stance. To see what optimistic investors are focusing on, take a closer look at the company's 3 key rewards.

Looking For More Investment Ideas Beyond FIGS?

If FIGS has your attention, do not stop your research there. The same tools can surface other opportunities that might suit your goals even better.

• Target resilient choices by scanning companies with sturdy finances and dependable track records using our 31 resilient stocks with low risk scores.
• Hunt for quality at a sensible price by reviewing the 29 high quality undervalued stocks that combine robust fundamentals with more modest valuations.
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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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