FIGS (FIGS) Stock Forecast & Price Target

FIGS Inc is projecting a significant improvement in its operating margin, expected to expand by 930 basis points to 3.1%, contrasting sharply with the previous year's margin of (6.2%). The company's total sales for Q2 demonstrated robust growth, increasing by 5.8% year-over-year to $152.6 million, surpassing the consensus expectation. Furthermore, the active customer base grew by 4.1% year-over-year, indicating a positive trend in customer engagement which supports a forecasted 7.0% rise in total FY25 sales to $594.3 million.

The analysis reveals several fundamental challenges for FIGS Inc., contributing to a negative outlook on the company's stock. Management has indicated significantly lower expected Q4 EBITDA margins due to rising tariff pressures and increased marketing expenses, placing additional strain on profitability. Furthermore, there is a concerning trend in sales metrics, as orders per active customer have declined to 0.48, alongside a slight reduction in total operating expenses, which may not be sufficient to offset the anticipated gross margin pressures.