Sell Recommendation for FIGS Amidst Financial Challenges and Margin Pressures

Lorraine Hutchinson, an analyst from Bank of America Securities, reiterated the Sell rating on FIGS (FIGS – Research Report). The associated price target was raised to $4.80.

Lorraine Hutchinson has given her Sell rating due to a combination of factors impacting FIGS’s financial outlook. Despite an increase in the earnings per share (EPS) forecast, the reduction in the 2025 EBITDA projection reflects ongoing challenges. The anticipated decline in sales and pressure on profit margins are expected to hinder any potential for valuation growth, leading to the maintenance of an Underperform rating.
Additionally, while there is some potential for gross margin improvement due to reduced tariffs on Chinese imports, the overall financial model still anticipates margin pressures continuing into 2026. Increased expenses related to international expansion, team development, and physical retail investments further contribute to the cautious outlook. These elements collectively justify the Sell recommendation, with a price objective set at $4.80, below the current trading price.

According to TipRanks, Hutchinson is a 4-star analyst with an average return of 7.0% and a 52.39% success rate. Hutchinson covers the Consumer Cyclical sector, focusing on stocks such as Nike, TJX Companies, and Five Below.