2024-04-12 10:55:15 ET
Summary
- FIGS’ revenue has grown at a CAGR of 53% during the last few years, with heavy marketing and the creation of its own niche allowing for outsized returns.
- We believe growth can continue, with product and geographical expansion, as well as increased market penetration.
- FIGS is seeing its revenue slow due to economic conditions, but we do not believe this is a concern in the medium term, as interest in the brand grows.
- We see margin improvement underpinned by operating cost leverage, with its DTC and e-commerce focus allowing the business a strong runway to attractive margins.
- FIGS is currently trading at a NTM FCF yield of ~4%, implying a good entry point in our view.
Introduction and thesis
FIGS, Inc. ( FIGS ) is a publicly traded healthcare apparel and lifestyle brand based in Santa Monica, California. Founded in 2013 by Heather Hasson and Trina Spear, FIGS focuses on providing stylish, comfortable, and functional medical apparel for healthcare professionals. FIGS operates in the healthcare and wellness sector, with a strong online presence and partnerships with leading medical institutions....
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For further details see:
FIGS: Risks Present But Also Upside On Execution