Figs Inc

FIGS shares have surged 25% over the past three months following another quarter of accelerating sales and improving profitability. Second-quarter 2026 net revenues rose 28.8% year over year to $196.6 million, marking a third consecutive quarter of more than 25% growth, with scrubwear up 27%, non-scrubwear up 40%, U.S. revenues up 22%, and international revenues up 67%. Active customers increased 13% to 3.1 million, average order value rose 9% to a record $127, and trailing 12-month net revenues per active customer reached a record $229, up 10% year over year. Adjusted EBITDA margin expanded to 18.6% from 12.9% a year earlier, supported by expense leverage, pricing, higher full-price selling, and lower return rates. The company raised its full-year 2026 revenue-growth outlook to approximately 20% from 14% to 16%, but faces tougher comparisons ahead, including lapping 33% growth in the fourth quarter and managing a U.S. Customs and Border Protection order blocking imports from a manufacturing partner in Jordan. The stock trades at 46.35 times forward 12-month earnings versus 15.28 times for its industry, leaving less room for a slowdown.

Figs stock climbed for a fourth straight day after the company reported second-quarter earnings that crushed Wall Street forecasts. The scrubs supplier posted a 300% year-over-year increase in GAAP net profit and saw its stock surge nearly 27% on earnings day. Barclays analyst Adrienne Yih and KeyBanc analyst Ashley Owens both raised their price targets to $20 per share, implying a potential 36% upside from current levels. Figs generated $97 million in free cash flow over the past twelve months, and the stock trades at an enterprise value-to-free cash flow ratio of 22 times, which some investors consider cheap given its growth rate.

FIGS is turning healthcare apparel into a broader investment story, with net revenues rising 28% year over year to $159.9 million and active customers surpassing 3 million for the first time. Scrubwear grew 27% and accounted for 79% of net revenues, while non-scrubwear grew 31% and represented 21% of net revenues, reflecting a strategy to build a broader healthcare wardrobe around layering, fit, fabrics, and use cases. The company is also testing omnichannel growth through Community Hubs, where roughly 40% of visitors are new to the brand, and through TEAMS, which serves hospitals and healthcare organizations. International net revenues reached $28.3 million, up 49.9% year over year, with operations now in 85 markets versus 32 at the end of 2024, though tariffs and supply-chain costs limited gross margin improvement to just 10 basis points at 67.7%. The stock carries a Zacks Rank of 3, or Hold, with a Momentum Score of A and a Value Score of D.