FIGS: International Expansion And Margin Recovery Will Support Future Upside Potential

Analysts have inched their FIGS fair value estimate down from $17.75 to $17.63, reflecting a slightly higher discount rate and lower future P/E assumptions, even as they continue to cite international expansion, product initiatives, and scale potential as key support for higher Street price targets in the stock around $17 to $20.

Analyst Commentary

Recent Street research on FIGS clusters around price targets in the mid-to-high teens, with several firms lifting targets as they reassess the company’s execution and growth opportunities. The commentary provides a mix of optimism around demand, international expansion, and operating discipline, along with reminders that profitability and margins still matter for how the stock is valued.

Bullish Takeaways

Bullish analysts highlight what they describe as "impressive" Q4 results, calling out stronger topline performance and tighter expense control as support for higher price targets around US$15 to US$20.
Several price target increases are tied to views that FIGS has the infrastructure to scale revenues meaningfully over time, with international growth repeatedly cited as a central opportunity for continued expansion.
Upgrades to ratings such as Overweight and Outperform are framed around what analysts see as a "sustained recovery" in demand and a focus on profitable, sustainable growth rather than growth at any cost.
Analysts also point to brand strength, product initiatives, and marketing reach as factors that could help FIGS maintain its positioning with healthcare professionals and support both growth and valuation multiples.

Bearish Takeaways

More cautious analysts acknowledge recent momentum but emphasize that FIGS still has work to do to bring margins back toward prior levels, which can limit how far valuations move relative to earnings power.
Some research notes frame current enthusiasm as at least partly dependent on continued expense discipline and consistent execution, warning that any slip in operating leverage could weigh on the stock’s risk and reward profile.
Market Perform and similar ratings indicate that, while recent results have been strong, not all analysts see clear upside from current levels, with questions around how quickly margin recovery can progress.
The clustering of price targets around US$15 to US$20 suggests that even bullish analysts are balancing growth narratives with caution around profitability and the need for FIGS to prove it can scale efficiently.

What's in the News

FIGS, Inc. raised earnings guidance for the full year 2026 and now expects net revenues growth to be up 14% to 16% (company guidance).
FIGS, Inc. issued earnings guidance for the full year ending December 31, 2026, indicating expected net revenues growth versus 2025 of 10% to 12% (company guidance).
FIGS, Inc. reported that from October 1, 2025 to December 31, 2025, it repurchased 0 shares for US$0 million, and that under the buyback announced on August 8, 2024, it has completed the repurchase of 9,872,547 shares for US$48.01 million, representing 5.83% of shares (company filing).

Valuation Changes

Fair value was trimmed slightly from $17.75 to $17.63 as updated model inputs were applied.
The discount rate was nudged up from 8.61% to 8.63%, indicating a modestly higher required return in the cash flow assumptions.
Revenue growth was adjusted higher from 8.35% to 9.00% in the underlying forecasts using the company’s reporting currency of $.
The profit margin was lifted from 8.40% to 8.97% in the model, reflecting a higher assumed steady-state earnings level in $ terms.
The future P/E was brought down from 60.1x to 52.0x, signaling a lower multiple applied to forward earnings in the valuation work.

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Key Takeaways

Expanding international presence and ongoing innovation are diversifying revenue and strengthening customer loyalty beyond the core U.S. market.
Enhanced cost discipline and a digital-first approach are boosting margins, offsetting external headwinds, and positioning the company for sustained earnings growth.
Rising tariff costs, lower promotional activity, and intensifying competition threaten FIGS' growth, margins, and premium positioning amid expanding inventory and ongoing macroeconomic risks.

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.What are the underlying business or industry changes driving this perspective?

Persistent and accelerating growth in healthcare employment, along with a gradual normalization of purchasing behavior post-COVID, is increasing the core customer base and supporting a sustained rise in repeat and new customer revenue.
Ongoing adoption of e-commerce and direct-to-consumer models is driving higher margins and improved customer retention, as evidenced by growing AOV, strong engagement on baseline (non-promo) days, and the successful expansion of omnichannel community hubs that fuel incremental revenue.
Strategic international expansion, with recent launches in Japan, South Korea, and twelve new Latin American markets, is poised to diversify revenues and accelerate top-line growth beyond the U.S. core over the next several years.
Enhanced product innovation-including new fits, fabrications, limited edition/seasonal launches, and deeper lifestyle category offerings-is increasing AOV and customer engagement, setting the stage for higher gross margins and expanded customer lifetime value.
Disciplined cost management, logistics optimization, and targeted SG&A savings are quickly restoring EBITDA margin levels, helping to offset tariff headwinds and positioning earnings to accelerate as revenue growth compounds.

FIGS Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming FIGS's revenue will grow by 9.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 6.1% today to 9.0% in 3 years time.
Analysts expect earnings to reach $77.4 million (and earnings per share of $0.32) by about May 2029, up from $40.6 million today.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 52.2x on those 2029 earnings, up from 51.5x today. This future PE is greater than the current PE for the US Luxury industry at 22.1x.
Analysts expect the number of shares outstanding to grow by 2.31% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.63%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

FIGS faces ongoing and increasing tariff headwinds, particularly as most of its cost of goods sold is subject to tariffs in Vietnam, Jordan, and China, which could put sustained pressure on gross margins and profitability into 2026 and beyond.
The company's growth outlook is tempered by a deliberate reduction in promotional activity, likely leading to slower customer acquisition and softer active customer growth, risking top-line revenue deceleration if baseline demand does not fully offset lost promotional-driven sales.
Intensifying competition and the risk of commoditization in medical apparel could erode FIGS' premium positioning and pricing power, especially as non-scrubwear and lifestyle product categories showed signs of softness and limited launches, potentially pressuring revenue growth and market share over the long term.
FIGS' planned inventory growth and investments in international expansion and new business lines increase execution risk-misjudging demand, overexpansion, or localized missteps could result in excess inventory, increased markdowns, and impaired net margins or earnings.
The company's dependence on healthcare employment and spending-while currently robust-remains exposed to broader secular risks, such as cost-cutting at institutions or shifts to lower-cost alternatives, which could limit FIGS' ability to maintain revenue and profitability growth if the macro backdrop weakens over time.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $17.62 for FIGS based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $22.0, and the most bearish reporting a price target of just $14.0.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $862.6 million, earnings will come to $77.4 million, and it would be trading on a PE ratio of 52.2x, assuming you use a discount rate of 8.6%.
Given the current share price of $12.54, the analyst price target of $17.62 is 28.9% 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

AnalystConsensusTarget 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 AnalystConsensusTarget 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 AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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