What Happened?

Shares of healthcare apparel company Figs (NYSE: FIGS) jumped 6.2% in the afternoon session after Barclays raised its price target for the company, and other analysts made similar positive adjustments. The bank lifted its price view to $9.00 from $7.00, though it kept its Equal-Weight rating on the shares. This move followed other firms that also grew more optimistic about the stock's potential. For instance, BTIG increased its price target to $10.00 from $9.00, and Telsey Advisory Group raised its target to $9.00. Adding to the positive backdrop, a report on the broader medical clothing market projected substantial growth, with the market expected to expand from $98.6 billion in 2024 to $173.2 billion by 2034.

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What Is The Market Telling Us

Figs’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 4 days ago when the stock gained 13.2% on the news that the company reported strong third-quarter financial results that significantly beat Wall Street's expectations. The healthcare apparel company's revenue grew 8.2% year-over-year to $151.7 million, exceeding analyst forecasts. This growth was complemented by a significant earnings beat, with adjusted earnings per share of $0.05, more than double the consensus estimate of $0.02. A key driver for the strong results was improved profitability; Figs' operating margin swung from a loss of 6.2% in the same quarter last year to a profit of 6.4%. Investors reacted positively to the strong top- and bottom-line performance and signs of increased operational efficiency.

Figs is up 58.7% since the beginning of the year, and at $9.35 per share, has set a new 52-week high. Investors who bought $1,000 worth of Figs’s shares at the IPO in May 2021 would now be looking at an investment worth $311.29.

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