FIGS (FIGS) Stock Forecast & Price Target

FIGS Inc demonstrated positive financial momentum, evidenced by a 6.6% year-over-year increase in total orders, amounting to 1.344 million, alongside a significant rise in international segment sales, which grew by 45.2% year-over-year. Notably, non-scrub items are becoming a larger part of the revenue mix, representing 24.5% of total sales in the fourth quarter, up from 22.7% the previous year, indicating a successful diversification of product offerings. Additionally, the company's B2B platform, TEAMs, expanded over 20% year-over-year, showcasing management's intent and capacity for further growth within the segment.

The financial outlook for FIGS Inc is concerning due to a contraction in gross margin, which fell 20 basis points year-over-year to 67.3%, while the operating margin is expected to decline significantly by 890 basis points to 0.9%. Additionally, the company's adjusted EBITDA margin is projected to drop to approximately 8.0%, well below prior guidance and the 15.8% reported in FY23, reflecting pressures on gross margins, weaker sales, and increased fixed costs. Furthermore, the company's FY25 sales forecast has been revised downward to $547 million, indicating reduced growth expectations and potential declines in active customers as promotional strategies are adjusted.