FIGS (NYSE: FIGS) just posted the best quarter in company history. The Q4 2025 earnings report dropped February 26. Revenue came in at $201.9 million — up 33% year-over-year, blowing past Wall Street estimates of around $165 million. EPS of $0.10 beat the $0.02 consensus by 400%. The stock responded accordingly: up 24% on February 27, another 11% on March 2, and as of today trading around $17 — a 54% gain in five sessions and right at its 52-week high.
Here’s the honest question: is this a genuine re-rating of a business that turned itself around, or is it a short squeeze on a brand that’s been here before? FIGS IPO’d at $22 in 2021, ran to $48, then spent three years below $10. The company has been loved and left behind before.
The Q4 Numbers, Clean
Let’s just run through what FIGS actually reported for Q4 2025 and the full year:
- Q4 net revenue: $201.9M (+33% YoY)
- Scrubwear revenue: $154.9M (+35.1%)
- International revenue: $37.7M (+55.1%)
- Q4 net income: $18.5M ($0.10/diluted share, vs $0.01 a year ago)
- Q4 adjusted EBITDA margin: 13.2%
- Full-year 2025 revenue: $631.1M (+13.6%)
- Full-year net income: $34.3M
- Full-year adj EBITDA margin: 11.8% (up from 9.3% in 2024)
- Active customers: 2.9 million, a company record (+9% YoY)
- Average order value: $126 (+9%)
The margin story is the one worth paying attention to. Operating expenses as a percentage of revenue fell from 67.2% in 2024 to 60.5% in 2025. FIGS didn’t just grow revenue — they did it while cutting the cost structure. Adj EBITDA margin went from 9.3% to 11.8%, and management is guiding 12.7–12.9% for 2026. This isn’t a company just spending its way to growth.
Customer growth also accelerated. Active customer additions ran at roughly 4% for several quarters — Q4 came in at 9%. That’s the kind of inflection point that suggests the brand heat is real, not manufactured.
What Actually Drove the Beat
CEO Trina Spear said Black Friday and Cyber Monday results “dramatically exceeded expectations.” FIGS went into the holiday window with better inventory positioning, new color drops (including the Isabel wider-leg style), and the FORMx fabric launched earlier in 2025. They also pulled back on promotions — fewer promotional days, lower discount rate — and still crushed it. That combination is actually meaningful. Revenue up, discounting down, margins holding. That’s not luck.
International was the standout growth driver: up 55.1% in Q4 to $37.7M, full-year international reached $103.6M (+27.5%). Mexico hit triple-digit growth. Canada returned to growth after slowing. FIGS added China and South Korea in Q4. The “go deep, go broad” international strategy appears to be working.
The problem is that international at $103.6M is still only about 16% of total revenue. Either that’s a massive runway or it’s a story that’s going to take a long time to play out — probably both.
For 2026, management guided ~$700M in net revenue (+10–12%), with Q1 specifically expected at +low-20s% YoY. Adj EBITDA margin of 12.7–12.9%. The guidance wasn’t thrown out as a beat-and-raise afterthought — it was detailed enough that analysts took it seriously, which triggered the upgrades.
Analyst Reaction: Five Upgrades and One Very Bearish Holdout
Post-earnings analyst moves:
- KeyBanc: Sector Weight → Overweight, target $17
- Goldman Sachs: Sell → Neutral, target raised to $14 (from $7.50)
- Barclays: Upgraded to Overweight
- Roth Capital: Target raised to $15.50 (from $12)
- Telsey Advisory: Target raised to $15 (from $9), maintained Hold
- Morgan Stanley: Target raised to $7.50 (from $5.25) — still well below market
The average analyst target post-earnings is around $14.50. The stock is currently trading at $17. So FIGS has already run past most of its own upgrades.
That’s a specific problem. KeyBanc is the most bullish at $17, which is essentially where the stock is today. Goldman went from Sell to Neutral and their new target is still 18% below current price. Morgan Stanley’s math puts the stock at roughly half its current value.
This kind of analyst divergence — some calling it a turnaround, others calling it overvalued — is what we saw with Lemonade (LMND) after their own record quarter. The company executes, the stock pops, and then the question becomes whether the pop already priced in the execution. With LMND, it had. That’s worth keeping in mind here.
The Bull Case
Customer growth is accelerating into 2026. Going from 4% to 9% active customer growth in a single quarter isn’t noise — it’s a step-change. If that momentum holds into Q1 (management guided +low-20s% revenue YoY), FIGS is on track to grow faster than the 10–12% they officially guided.
International is still 16% of revenue. In a $100B+ global medical apparel market, FIGS has barely scratched Europe and Asia. Triple-digit growth in Mexico, strong Middle East expansion, new China and South Korea launches — the geographic optionality is real. Hims & Hers is the DTC healthcare brand everyone’s watching right now, but FIGS arguably has a cleaner path: a physical product, a captive professional customer base, and no regulatory risk on the core product.
The balance sheet is clean. Debt-free, with solid cash from operations. Management isn’t raising equity to fund growth — they’re generating it. That’s a different risk profile than most DTC brands at this stage.
Margin leverage is real. Adj EBITDA margin went from 9.3% to 11.8% in one year. They’re guiding to nearly 13% for 2026. For a brand that was burning money to acquire customers just two years ago, this trajectory is the proof point that the model works at scale.
The Bear Case
The stock is trading above every analyst target except KeyBanc’s. At $17 with ~185M diluted shares, FIGS has a market cap of roughly $3.1 billion. That’s ~91x trailing earnings ($34.3M FY2025 net income) and ~4.9x trailing revenue. For a company guiding 10–12% growth in 2026, you’re paying a premium to the optimistic case before it happens.
Simply Wall St puts fair value at $7.21 — a model that factors in current margins, growth rates, and a DCF multiple. Whether you agree with their model or not, the gap between $7.21 and $17 should make you think carefully about what assumptions you need to hold to justify the current price.
Tariffs are a real headwind. FIGS manufactures overseas, and tariffs cost them 120 basis points in gross margin in 2025. That drag continues into 2026. Q4 gross margin was 62.9%, down 440bps year-over-year — they also took a $5.6M inventory write-off for broken and aged stock that had accumulated over years. These aren’t catastrophic numbers, but they’re going in the wrong direction on gross margins even as EBITDA margins expand.
This has happened before. FIGS hit $48 in 2021 on COVID-driven demand and DTC enthusiasm. Then healthcare demand normalized, growth slowed, and the stock lost 90% of its value. The current turnaround is real — but the company is now priced for the turnaround to continue flawlessly. Any hiccup in Q1 2026 execution and this stock revisits $12 fast.
If you want a similar setup where a consumer brand with improving fundamentals is running ahead of the analyst consensus, Simply Good Foods (SMPL) offers a lower-risk version of that trade at a more reasonable multiple.
Key Metrics Snapshot (as of Q4 2025 / FY2025)
- Market cap: ~$3.1B (at $17/share)
- FY2025 revenue: $631.1M
- FY2025 net income: $34.3M
- Trailing P/E: ~91x
- Price/Sales: ~4.9x
- FY2026 revenue guidance: ~$700M (+10–12%)
- Adj EBITDA margin guidance: 12.7–12.9%
- Active customers: 2.9M (record)
- 52-week range: $3.57 – $17.40
- Analyst target range: $7.50 (Morgan Stanley) – $17 (KeyBanc), avg ~$14.50
Verdict
FIGS had a genuinely great quarter. The turnaround is real — customer growth is accelerating, margins are expanding, international is working, and management executed through tariff headwinds without killing the model. This isn’t marketing spin; the numbers hold up.
The problem is the stock has already reflected all of that. At $17, you’re above average analyst targets, trading at ~91x trailing earnings, and betting that 10–12% growth guidance is actually conservative. That might be right. But you’re paying for the optimistic scenario upfront.
The trade that made sense was at $5 six months ago. At $17, the trade is: wait for a pullback to the $12–$13 range before sizing in. If Q1 2026 comes in at the guided +low-20s% growth and the stock holds above $14, the bull case starts building real legs. Until then, this is a watchlist name — not a chase.
This is not financial advice. Do your own research before making any investment decisions. I hold no position in FIGS.