FIGS, Inc. (NYSE: FIGS) produces healthcare apparel and a wide range of lifestyle products and offers them to consumers directly through its mobile app and website. Its solid product offerings and exposure to the healthcare industry enhance its investment appeal and make this an attractive investment choice for investors.
On TipRanks, the California-based apparel manufacturer commands a Strong Buy consensus rating based on six Buys and two Holds. FIGS’ average price target is $16.25, suggesting a whopping 67% upside from the current level.
A few days ago, Rick Patel of Raymond James initiated coverage on FIGS with a Buy rating and a price target of $15 (54.16% upside potential).
Meanwhile, corporate insiders, too, look optimistic about the growth prospects of FIGS. In the last three months, insiders have purchased $499.9 thousand worth of FIGS stock. As per TipRanks, financial bloggers have a 100% Bullish stance on the company versus the sector average of 63%.
Now, let’s discuss how this recently listed company came on the radar of analysts and investors.
Going Public Was a Right Move for FIGS
On June 1, 2021, FIGS completed an initial public offering (IPO) of approximately 30.3 million (versus 22.5 million decided initially). Of its 30.3 million offerings, nearly 4.6 million shares were offered by FIGS and 25.7 million shares were extended by Tulco LLC, the largest shareholder of FIGS.
The IPO was a success as FIGS raised roughly $95.1 million in its net proceeds. The IPO price was $22 per share, higher than the company’s initial estimate of $16-$19 per share.
FIGS’ first trading day on the stock exchange was May 27, 2021. The opening price was $28.30 (up 28.6% from the IPO price) and the closing price was $30.02 (up 36.5%). Shares of FIGS have grown 36.7% in the last one month.
FIGS’ Journey
In May 2022, FIGS delivered its results for the first quarter of 2022. Revenues increased 26.4% year-over-year, driven by solid orders for its products. Its active customer base was up 31.1% to 2 million at the end of the quarter.
In April 2022, the company formed its Healthcare Advisory Board, intending to have a better approach to address the needs of the healthcare industry.
In September 2021, FIGS priced and completed a secondary offering of shares, with prices at $40.25. This offering price was nearly 83% above the company’s IPO price of $22.
Growth Drivers & Projections Support FIGS’ Promising Future
The company’s diversified product offering, including lab coats, masks, loungewear, vests, jackets, and others, can be categorized as scrubwear and lifestyle or non-scrubwear. A loyal customer base, innovation in products (by designs and color), and growing brand awareness is anticipated to be beneficial for both the product categories going forward. In the first quarter of 2022, the company introduced two products in non-scrubwear and one product in the scrubwear category.
Also, FIGS’ efforts to expand footholds in international markets, including Canada, the UK, Australia, France, Ireland, and Spain, are likely to add more vigor to the top-line growth trajectory. In the first quarter, the company’s international revenues increased 59% year-over-year.
Its measures to deal with the supply-chain challenges and restrict the impact of cost inflation might prove to be beneficial. Meanwhile, the company’s solid cash position is expected to support its growth plans.
For 2022, the company anticipates revenues to be within the $510-$530 million range, reflecting growth of 22%-26% from the previous year. The gross margin is forecast to be 67%-68% in the year.
The company’s Co-CEO and Co-Founder, Trina Spear, said, “Looking ahead, we are well-positioned to fuel profitable growth for the years to come due to our strong foundation, recession-resistant industry, and deep understanding of the healthcare community.”
FIGS Website Traffic Justifies Its Momentum
According to TipRanks, FIGS’ website traffic increased 87.71% year-over-year in the second quarter and 101.95% since the beginning of 2022. The impressive growth estimates are reflective of the company’s top-line strength.
Key Takeaways for FIGS’ Investors
Despite current challenges, FIGS prospects look bright as it is well-positioned to benefit from solid demand for scrubwear and non-scrubwear products. At current levels, the stock could be an attractive investment option.
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