FIGS Inc. Faces Uncertain Outlook Amid Growth and External Challenges: Hold Rating Maintained

Analyst John Kernan from TD Cowen reiterated a Hold rating on FIGS (FIGS – Research Report) and keeping the price target at $4.00.

John Kernan has given his Hold rating due to a combination of factors affecting FIGS’s financial performance and outlook. The company’s Q1 sales showed a positive year-over-year growth, driven by improvements in customer metrics, such as active customer growth and average order value. However, there are concerns about the sustainability of this growth due to external factors like tariff rates and the lack of trade deals, which could introduce uncertainty and potential downside risks to future estimates.
Despite some positive trends, such as the growth in core scrubwear and international sales, there are challenges that FIGS faces. The company’s revised outlook includes a reduction in adjusted EBITDA margin, reflecting the impact of tariffs on gross margins. Additionally, while there is positive momentum in customer acquisition and product reception, the potential for a downturn in consumer spending and the absence of trade agreements could further pressure the company’s financial performance. These mixed signals contribute to the Hold rating, as the future outlook remains uncertain.

In another report released on May 5, Telsey Advisory also maintained a Hold rating on the stock with a $5.00 price target.

Based on the recent corporate insider activity of 27 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of FIGS in relation to earlier this year.