How Higher Earnings Estimates Will Impact FIGS (FIGS) Stock

• FIGS has attracted increased analyst optimism after full year earnings estimates rose by 23.1% over the past quarter, alongside a 23.9% year to date return that compares favorably with its retail wholesale peers.
• The sharper earnings outlook points to investor focus on how FIGS is managing demand, product mix and cost discipline within its direct to consumer healthcare apparel model.
• We will look at how FIGS' investment narrative intersects with stronger earnings estimates and what that shift might imply for investors.

Scan beyond FIGS and line up other direct to consumer leaders showing strong earnings momentum with the curated 31 high quality undervalued stocks.

FIGS Investment Narrative Recap

For FIGS, the big picture you would need to buy into is pretty simple. The business is trying to turn a direct to consumer scrub brand into a broader healthcare apparel platform, with e commerce scale, repeat purchasing and international reach doing most of the heavy lifting. The latest earnings estimate upgrade points to expectations for steadier execution on that plan rather than a new phase altogether.

In the near term, the key swing factor is whether FIGS can keep gross margins intact while tariffs, product costs and lower discounting all pull in different directions. The biggest risk is that reduced promotions slow customer growth just as competition intensifies, and the recent news does not materially change that trade off; it just raises the bar on delivery.

There are no fresh corporate announcements tied directly to this earnings revision, so the most relevant context is how existing initiatives feed into the new numbers. FIGS is already leaning into international markets like Japan, South Korea and several Latin American countries. If executed cleanly, this can spread fixed costs and broaden the customer base.

Those same moves also raise execution risk. If FIGS misjudges demand or assortment in newer regions, inventory can build, markdowns can creep higher and the margin story that underpins current expectations becomes harder to sustain. When you look at the sharper earnings outlook, it effectively puts more scrutiny on how well these expansion and product roll out efforts land over the next few reporting periods.

FIGS Earnings Assumptions And Valuation Setup

FIGS now sits on a clearer analyst script. Forecasts point to revenue growing at 9.0% a year over the next few years, with profit margins easing from 8.7% today toward 7.9% as the model matures. On current consensus, earnings are expected to reach $72.9 million by 2029, compared with $61.9 million today, which implies an increase of about $11 million in profit on the same timeframe.

FIGS' narrative projects $918.9 million revenue and $72.9 million earnings by 2029. This assumes 9.0% yearly revenue growth and an earnings increase of about $11 million from $61.9 million today.

Those same analyst numbers sit behind a P/E bridge that matters for anyone assessing FIGS. The stock would need to move from roughly 39.4x current earnings to about 56.1x on the 2029 consensus profit to line up with the $18.62 target. That multiple is well above the quoted 17.0x P/E for the wider US Luxury industry. The thesis here therefore leans heavily on the durability of the direct to consumer model, not just simple mean reversion or sector averages.

Forecast revenue of $918.9 million and earnings of $72.9 million in 2029 also assume a modest 1.0% annual increase in the share count. That share creep dilutes some of the per share benefit of higher earnings, so it is worth checking whether personal expectations on buybacks or equity grants sit above or below that line. For readers, the real work is testing whether a nearly $11 million uplift in profit with slightly lower margins feels achievable given the promotional pullback, tariff exposure and the international expansion already underway.

Discover how FIGS' fair value indicates a 38% potential upside to its current price that may not last much longer.

Exploring Other Perspectives

One alternate FIGS storyline focuses on slowing customer acquisition. The bearish group was already penciling in around US$960.0 million of 2029 revenue and US$76.6 million of earnings before this earnings upgrade, yet still saw only a cautious upside. That is a much more wary stance. Use this spread in views to stress test your own assumptions because both sets of estimates may shift after the latest news.

Explore 4 other FIGS fair value estimates, including one that suggests as much as 30% downside from the current price.

Decide For Yourself

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your FIGS research is our analysis highlighting 3 key rewards that could impact your investment decision.
• See our latest analysis for FIGS. The report includes a comprehensive fundamental analysis summarized in a single visual, the Snowflake, making it easy to evaluate FIGS' overall financial health at a glance.

Looking for more FIGS style investment ideas?

If FIGS has sharpened your focus on earnings quality, balance sheet strength and valuation, it can help to line it up against a wider watchlist built from consistent criteria using the Simply Wall St screener.

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• For those hunting less crowded stories with stronger quality markers, widen your search through a 19 high quality undiscovered gems that could complement any work you do on FIGS itself.

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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