• Earlier this week, Zacks upgraded Figs (FIGS) to a Rank #2 rating, citing an upward trend in analyst earnings estimate revisions and growing optimism around the company’s earnings outlook.
• This shift in analyst sentiment highlights how changes in earnings expectations alone can materially influence perceptions of FIGS’ underlying business momentum.
• With this earnings-estimate upgrade in mind, we’ll now examine how the changed outlook could interact with FIGS’ existing margin-recovery narrative.

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FIGS Investment Narrative Recap

To own FIGS, you need to believe its direct to consumer model can sustain healthy earnings while it manages tariff pressure, slower promotional growth, and intensifying competition in medical apparel. The Zacks upgrade, driven by higher earnings estimates, reinforces the near term earnings recovery story but does not meaningfully change the biggest risk right now, which is whether FIGS can protect margins as tariffs and input costs intersect with a premium yet price sensitive customer base.

The most relevant recent development here is FIGS raising its 2026 net revenue growth outlook to 14% to 16% alongside Q1 2026 results that showed higher sales and positive net income. That stronger guidance helped support the existing margin recovery narrative, and the Zacks earnings upgrade now sits on top of that, suggesting analysts are increasingly aligning the earnings outlook with the company’s more confident revenue guidance.

Yet, against this improving earnings sentiment, investors should also be aware of how rising tariffs could still...

FIGS' narrative projects $862.6 million revenue and $77.4 million earnings by 2029. This requires 9.0% yearly revenue growth and a $36.8 million earnings increase from $40.6 million today.

Uncover how FIGS' forecasts yield a $17.62 fair value, a 77% upside to its current price.

Exploring Other Perspectives

The Zacks upgrade sits closer to the bullish camp, where some analysts were already assuming revenues near US$878,000,000 and earnings of about US$75,000,000, which paints a far more optimistic picture than consensus and could change further as new earnings revisions come through.

Explore 5 other fair value estimates on FIGS - why the stock might be worth over 2x more than the current price!

Reach Your Own Conclusion

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your FIGS research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free FIGS research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate FIGS' overall financial health at a glance.

No Opportunity In FIGS?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.