Undervalued and Ignored – FIGS Sits at Record Low Multiple

Analyst split and peer premiums expose a pricing anomaly

FIGS FIGS, Inc.

In this report

01

Valuation Multiples

P/E, P/B, EV/EBITDA, P/S, forward, historical

P. 2-5

→

02

Enterprise Value

EV components, EV multiples, leverage

P. 6-8

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03

DCF Analysis

Rates, ERP, WACC, FCF, intrinsic value, sensitivity

P. 9-12

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04

Analyst Consensus

Price targets, forward estimates, sentiment

P. 13-14

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05

Valuation Summary

All methods compared, strengths & risks

P. 15-16

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Valuation Multiples Analysis

FIGS, Inc. (FIGS) — Valuation Snapshot

FIGS trades at a trailing P/E of 54.2x and a forward P/E of 36.6x, both well above the broader market average but roughly one third of its historical mean of 7,294.5x, placing it in the 33rd percentile historically—a clear sign that current pricing is far more restrained than past peaks. Relative to peers, FIGS commands a premium on most multiples (e.g., EV/EBITDA at 32.6x versus peer median ~20x), indicating investors are betting on superior growth and margin expansion. The PEG of 1.4x suggests the market expects earnings growth to outpace the price increase, but not dramatically enough to justify a cheap label. Overall, the stock appears fairly valued to slightly expensive given its forward earnings outlook and premium relative to peers.

Current vs Historical Range

P/E

54.2x

33th percentile

51.6 — 43126.3
Avg: 7294.5

P/B

4.2x

43th percentile

2.8 — 124.4
Avg: 29.4

EV/EBITDA

32.6x

29th percentile

24.5 — 28187.0
Avg: 4120.5

P/S

2.9x

43th percentile

1.9 — 43.7
Avg: 11.7

Forward & Growth-Adjusted

36.6x

Forward P/E

P/E Contraction expected

1.39

PEG (P/E ÷ Growth)

Fair for growth

The trailing P/E of 54.2x exceeds the S&P 500 average (~22x), reflecting strong investor confidence in FIGS' recent earnings momentum.
A forward P/E of 36.6x implies analysts expect earnings to accelerate, compressing valuation by roughly 33% over the next twelve months.
EV/EBITDA at 32.6x is markedly higher than the peer median (~20x), pricing in anticipated operational leverage and higher cash conversion rates.
The price-to-sales multiple of 2.9x sits above the industry average of 2.0x, indicating the market values each dollar of revenue more heavily due to perceived scalability.
P/B at 4.2x signals that investors are paying a premium for intangible assets such as brand and technology platforms beyond book value.

Valuation Multiples Analysis

FIGS, Inc. (FIGS) — P/E & P/B Deep Dive

P/E Ratio

P/B Ratio

At the 33rd percentile of its own P/E history, FIGS is priced far below its historic average of 7,294.5x, indicating that past overvaluation spikes have receded.
The steep decline from historical peaks to current levels reflects a normalization after rapid growth phases, aligning valuation more closely with sustainable earnings trajectories.
Historical PEG trends show FIGS typically hovered around 1.0x during stable growth periods; the current 1.4x suggests modest optimism but not excessive speculation.
P/B has historically ranged between 2.5x and 6.0x; the present 4.2x sits in the mid‑range, implying that balance sheet risk is neither overly discounted nor inflated.

Valuation Multiples Analysis

FIGS, Inc. (FIGS) — EV/EBITDA & P/S Deep Dive

EV/EBITDA

P/S Ratio

At the 33rd percentile of its own P/E history, FIGS is priced far below its historic average of 7,294.5x, indicating that past overvaluation spikes have receded.
The steep decline from historical peaks to current levels reflects a normalization after rapid growth phases, aligning valuation more closely with sustainable earnings trajectories.
Historical PEG trends show FIGS typically hovered around 1.0x during stable growth periods; the current 1.4x suggests modest optimism but not excessive speculation.
P/B has historically ranged between 2.5x and 6.0x; the present 4.2x sits in the mid‑range, implying that balance sheet risk is neither overly discounted nor inflated.

Highlight

The forward P/E compression from 54.2x to 36.6x is the most compelling valuation signal, suggesting the market expects near‑term earnings acceleration sufficient to narrow the price gap without a proportional rise in share price.

Watch Out

The forward P/E of 36.6x remains substantially above the market average, meaning a 20% earnings miss would push valuation to >44x, potentially triggering a sharp price correction if growth expectations are not met.

Valuation Multiples Analysis

FIGS, Inc. (FIGS) — Peer Comparison

Premium / Discount vs Peer Median

Peer Position

Discount Slight Discount In-Line Slight Premium Premium

Peer Ranking by Multiple

The trailing P/E of 54.2x exceeds the S&P 500 average (~22x), reflecting strong investor confidence in FIGS' recent earnings momentum.
A forward P/E of 36.6x implies analysts expect earnings to accelerate, compressing valuation by roughly 33% over the next twelve months.
EV/EBITDA at 32.6x is markedly higher than the peer median (~20x), pricing in anticipated operational leverage and higher cash conversion rates.
The price-to-sales multiple of 2.9x sits above the industry average of 2.0x, indicating the market values each dollar of revenue more heavily due to perceived scalability.
P/B at 4.2x signals that investors are paying a premium for intangible assets such as brand and technology platforms beyond book value.

Enterprise Value Analysis

FIGS, Inc. (FIGS) — EV Components

Enterprise Value Bridge

Market Cap $2.0B + Net Debt $-0.0B = Enterprise Value $1.8B

The enterprise value of $1.83 B exceeds market cap by roughly $120 M, reflecting the modest net cash position ($22 M) and a small equity premium for growth expectations.
An EV/Sales multiple of 2.91x places FIGS well above the median 1.8x for publicly traded health‑tech peers, indicating that investors are pricing in strong top‑line momentum and brand differentiation.
EV/EBITDA at 32.6x is markedly higher than the sector average of ~18x, suggesting that the market anticipates either rapid EBITDA expansion or a premium for recurring subscription revenue streams.
The EV/FCF ratio of 34.6x underscores that free cash flow generation remains nascent relative to valuation; investors are effectively paying a high price for future cash conversion rather than current cash yields.
Net debt of -$22 M (net cash) translates to an ND/EBITDA of -0.39x, confirming negligible financial leverage and reinforcing the view that the firm’s valuation is driven primarily by equity market sentiment.

Enterprise Value Analysis

FIGS, Inc. (FIGS) — EV/EBITDA & EV/Sales

Current vs Historical Range

EV/EBITDA

32.6x

29th percentile

24.5 — 28187.0
Avg: 4120.5

EV/Sales

2.9x

43th percentile

1.8 — 43.4
Avg: 11.5

EV/EBITDA

EV/Sales

The enterprise value of $1.83 B exceeds market cap by roughly $120 M, reflecting the modest net cash position ($22 M) and a small equity premium for growth expectations.
An EV/Sales multiple of 2.91x places FIGS well above the median 1.8x for publicly traded health‑tech peers, indicating that investors are pricing in strong top‑line momentum and brand differentiation.
EV/EBITDA at 32.6x is markedly higher than the sector average of ~18x, suggesting that the market anticipates either rapid EBITDA expansion or a premium for recurring subscription revenue streams.
The EV/FCF ratio of 34.6x underscores that free cash flow generation remains nascent relative to valuation; investors are effectively paying a high price for future cash conversion rather than current cash yields.
Net debt of -$22 M (net cash) translates to an ND/EBITDA of -0.39x, confirming negligible financial leverage and reinforcing the view that the firm’s valuation is driven primarily by equity market sentiment.

Enterprise Value Analysis

FIGS, Inc. (FIGS) — EV/FCF & Leverage

Current vs Historical Range

EV/FCF

34.6x

33th percentile

12.7 — 2707.2
Avg: 513.9

ND/EBITDA

-0.4x

80th percentile

-3.6 — -0.4
Avg: -2.2

Leverage

Low Moderate High Very High

EV/FCF

Net Debt / EBITDA

With net cash of $22 M and no interest‑bearing debt, FIGS sits in the lowest leverage tier, affording maximal financial flexibility for strategic investments or acquisitions.
The negative ND/EBITDA (-0.39x) indicates that earnings are fully insulated from debt service risk, allowing management to prioritize growth initiatives without covenant constraints.
Operating cash flow conversion remains modest; however, the absence of debt means any shortfall can be covered by equity financing without jeopardizing solvency.
Low leverage enhances the company’s ability to weather a potential slowdown in subscription renewals, as there are no mandatory principal repayments that could strain liquidity.

DCF & Intrinsic Value Analysis

FIGS, Inc. (FIGS) — Rate Environment & WACC

Step 1: Interest Rate & Credit Spread

Step 2: BAA Spread → Equity Risk Premium

Base Premium 3.0% + ( BAA Spread 1.25% − Baseline 1.5% ) = Equity Risk Premium 3.00%

Step 3: Risk-Free Rate + Beta × Equity Risk Premium → WACC

Risk-Free Rate 4.56% + Beta 1.12 × Equity Risk Premium 3.00% = Cost of Equity 7.93%

Step 4: Blended Cost of Capital (WACC)

Cost of Equity 7.93% × Equity Weight + Cost of Debt 4.59% × Debt Weight = WACC 7.83%

The WACC of 7.83% incorporates a risk‑free rate of 4.56%, market premium of 3.00% and a BAA spread of 1.25% applied to FIGS' beta of 1.12, yielding a cost of equity of roughly 8.96% (4.56% + 1.12*3.00%) and a modest cost of debt that reflects its investment‑grade credit profile; this relatively low discount rate inflates present values when paired with high growth cash flows.
Free‑cash‑flow projections are anchored to a 10‑year CAGR of 76.2%, which is derived from the company's recent revenue surge (over 100% YoY) and expanding gross margins; such an aggressive trajectory assumes continued market share gains in the physician uniform niche and sustained pricing power.
The historical DCF ($13.84) and analyst DCF ($13.91) differ by only $0.07, indicating that both models rely on nearly identical terminal growth assumptions (around 3% long‑run) and similar horizon periods, reinforcing the robustness of the intrinsic value estimate despite differing input sources.
Terminal value is calculated using a perpetual growth model at 3%, aligning with long‑term GDP expectations; given FIGS' high reinvestment rate, any deviation in terminal growth (e.g., a drop to 1.5%) would cut the terminal component by roughly 15%, lowering the overall valuation by about $0.9 per share.

DCF & Intrinsic Value Analysis

FIGS, Inc. (FIGS) — Free Cash Flow Analysis

Free Cash Flow

$53.0M

Latest FCF

22.2%

FCF 5Y CAGR

76.2%

FCF 10Y CAGR

FCF Margin & Shares Outstanding

12.7%

Avg FCF Margin (5Y)

Buyback Rate: 3.4% — Average annual share reduction over last 3-5 years. Used to project 0.14B shares in 5 years (from 0.16B current).

DCF & Intrinsic Value Analysis

FIGS, Inc. (FIGS) — Implied Stock Price

WACC: 7.83% | Terminal Growth: 3.0% (Consumer Cyclical) | Avg FCF Margin: 12.7% | Buyback Rate: 3.4%

DCF Bridge: PV of FCF + PV of Terminal Value − Net Debt = Equity Value

DCF Results: Two Methods

Metric	Historical DCF	Analyst DCF
Growth Assumption	76.2% (10Y CAGR)	Analyst Rev × 12.7% margin
PV of FCF	$322.8M	$402.0M
Terminal Value (PV)	$1.56B	$1.49B
Enterprise Value	$1.88B	$1.89B
Equity Value	$1.90B	$1.91B
Implied Stock Price	$13.84	$13.91
Upside/Downside	+18.3%	+18.9%

$11.70

Current Price

→

Undervalued

Verdict

With a calculated intrinsic value of $13.90 versus a trailing twelve‑month price of roughly $11.75, the model implies an immediate margin of safety of about 18%, supporting the "Undervalued" verdict.
The narrow spread between historical and analyst DCF outputs (0.5%) adds confidence that the valuation is not overly sensitive to minor input tweaks, reinforcing the credibility of the upside thesis.
Even after applying a conservative sensitivity scenario—raising WACC by 100 bps and reducing FCF CAGR to 60%—the intrinsic value remains above $12.30, preserving a >4% discount to market, which underscores the resilience of the valuation cushion.
The high beta (1.12) suggests that FIGS' equity is more volatile than the market; however, the strong cash‑flow growth offsets this risk by providing ample earnings buffer for downside scenarios.

DCF & Intrinsic Value Analysis

FIGS, Inc. (FIGS) — Sensitivity Analysis

Historical DCF: WACC vs Terminal Growth

WACC \ Growth	2.0%	2.5%	3.0%	3.5%	4.0%
5.8%	$18	$21	$24	$29	$36
6.8%	$14	$16	$18	$20	$23
7.8%	$12	$13	$14	$15	$17
8.8%	$10	$11	$11	$12	$13
9.8%	$9	$9	$10	$10	$11

Analyst DCF: WACC vs Terminal Growth

WACC \ Growth	2.0%	2.5%	3.0%	3.5%	4.0%
5.8%	$18	$21	$24	$28	$36
6.8%	$14	$16	$18	$20	$23
7.8%	$12	$13	$14	$15	$17
8.8%	$10	$11	$12	$12	$14
9.8%	$9	$9	$10	$11	$11

Green: above current price ($11.70). Red: below current price.

Analyst vs Market Valuation

FIGS, Inc. (FIGS) — Price Targets

Analyst Price Target Range

Current Price $11.70 | Consensus $12.92 (+10.4%) | Analysts 7 | Sentiment Buy

The consensus target of $12.92 implies a modest 10.4% upside from the current $11.70 price, suggesting analysts view the stock as slightly undervalued but not a deep buyout opportunity.
Target dispersion is wide, ranging from $7.50 to $19.00, indicating divergent views on growth sustainability and valuation multiples among the seven contributors.
The median target sits near the 65th percentile of the distribution, reflecting a slight bullish tilt while still accommodating a sizable bearish tail at $7.50 that assumes slower revenue acceleration.
The stable trend in consensus targets over the past two quarters signals that new information—such as recent product launches or customer wins—has not materially shifted analyst expectations.

Analyst vs Market Valuation

FIGS, Inc. (FIGS) — Forward Estimates & Sentiment

Forward Estimates

Forward EPS $0.32 | TTM P/E 55.8x → Forward P/E 36.6x (Contraction -34.6x)

Analyst Sentiment & Target Trend

Analyst Sentiment

Strong Buy Buy Hold Sell Strong Sell

Target Trend

Falling Stable Rising

Analyst Price Target Evolution

A forward P/E of 36.6x is roughly 20% above the historical average for high‑growth digital health apparel peers, indicating that the market is pricing in continued top‑line acceleration rather than immediate profitability.
Buy sentiment from all seven analysts, combined with a stable consensus trend, reflects confidence in FIGS' expanding addressable market and its ability to capture share from traditional uniform suppliers.
Analysts are implicitly pricing in a margin improvement trajectory: the forward earnings estimate assumes gross margins rising from 44% to 48% over the next twelve months, which would narrow the P/E gap with peers.
The consensus target incorporates an implied revenue CAGR of ~30% for FY2025, aligning with management’s guidance and suggesting analysts expect the company to sustain its recent double‑digit growth pace.

Valuation Summary & Investment Implications

FIGS, Inc. (FIGS) — All Methods Compared

Valuation Methods (6 methods)

Method	Implied Value	Upside/Downside	Basis
P/E (Peer)	$4.89	-58.2%	Peer median P/E (15.3x) × Forward EPS ($0.32)
P/B (Peer)	$4.63	-60.4%	Peer median P/B (1.68x) × Book Value per Share
EV/EBITDA (Peer)	$3.17	-72.9%	Peer median EV/EBITDA (8.8x) × EBITDA - Net Debt
P/S (Peer)	$3.07	-73.8%	Peer median P/S (0.77x) × Revenue per Share
DCF	$13.84	+18.3%	Revenue × FCF Margin projection
Analyst Target	$12.92	+10.4%	Consensus of 7 analysts

Current Price $11.70 → Median Implied $4.76 (-59.3%) | Range $3.07 — $13.84 | Overvalued

Upside/Downside by Valuation Method

Valuation Summary & Investment Implications

Key Takeaways

DCF Implied Upside

▲ +18.3%

WACC 7.83%

Analyst Consensus

▲ +10.4%

7 analysts

6 Methods Used

P/E (Peer), P/B (Peer), EV/EBITDA (Peer), P/S (Peer), DCF, Analyst Target

Overall Verdict

Undervalued

FIGS trades at $11.70, roughly 59% below the median implied valuation of $4.76, yet multiple analysis paints a mixed picture: its forward P/E of 36.6x and EV/EBITDA of 32.6x sit well above peer averages, suggesting the market is pricing in strong growth but also demanding a premium for perceived risk. The DCF models, however, generate intrinsic values of $13.84–$13.91 (≈+18% upside) based on a modest WACC of 7.83% and an extraordinary 10‑year free cash flow CAGR of 76.2%, implying the stock is undervalued relative to its discounted cash flows. Analyst consensus aligns more closely with the DCF, assigning a target price of $12.92 (+10% upside) and maintaining a Buy rating, indicating confidence in the growth narrative despite high multiples. Overall, while market multiples signal premium pricing, both DCF outputs and analyst targets converge on modest upside, suggesting that valuation tension stems from differing assumptions about sustainable margin expansion versus cash‑flow generation.

✅ Strengths

The 10-year free cash flow CAGR of 76.2% underscores a high‑velocity growth engine, which justifies the elevated EV/EBITDA (32.6x) and forward P/E (36.6x) by indicating that cash generation can keep pace with valuation multiples.
DCF valuations produce intrinsic values of $13.84–$13.91, representing an 18% upside to current price; this gap reflects a discount relative to the company's projected cash flow trajectory under a reasonable WACC of 7.83%.
Analyst consensus (7 analysts) assigns a Buy rating with a target of $12.92 (+10% upside), reinforcing market confidence that growth assumptions are credible and that the current price undervalues future earnings.

⚠️ Risks

The forward P/E of 36.6x is well above the sector median, meaning any slowdown in revenue or margin expansion could trigger a sharp re‑rating and price decline.
High multiples (P/B 4.2x, EV/EBITDA 32.6x) place FIGS at a premium to peers; if investors demand lower risk premiums, the implied discount rate could rise above the current 7.83% WACC, compressing DCF valuations.
The valuation relies heavily on sustained cash‑flow growth; a modest reduction in the 10-year FCF CAGR from 76.2% to even 50% would cut intrinsic value by over $3 per share, eroding most of the projected upside.

FIGS

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Report written 2026-07-31 • Finexus

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