FIGS' Growth Deceleration Meets Insider Selling Just Before the Numbers Arrive

FIGS Inc. (NYSE: FIGS) reports first-quarter 2026 earnings after the close on Thursday, May 7, with a conference call scheduled for 5:00 PM ET. After delivering four consecutive quarters of substantial earnings beats—including a stunning 400% surprise last quarter—investors are watching to see whether the healthcare apparel disruptor can sustain its momentum amid a challenging operating environment. The central question: can FIGS maintain its impressive growth trajectory while navigating tariff pressures and rising costs?

Part 1: Earnings Preview

FIGS Inc. designs and sells innovative, fashionable medical apparel and lifestyle products primarily for healthcare professionals, having disrupted the traditional scrubs market since its 2013 founding with a direct-to-consumer model emphasizing quality, functionality, and style. The company has built a passionate customer base and strong brand recognition within the healthcare community.

For Q1 2026, analysts expect FIGS to report EPS of $0.01 on revenue of approximately $152.54 million when results are released after Thursday's close. The company most recently reported Q4 2025 EPS of $0.10, crushing the $0.02 consensus by 400% on revenue of $201.9 million—a 33% year-over-year increase. Comparing to the same quarter last year, FIGS reported break-even earnings ($0.00) in Q1 2025 on $124 million in revenue, meaning the current estimate implies modest profitability improvement on a 22-23% revenue gain.

Three key themes define this earnings story:

Customer Growth and Retention: FIGS continues expanding its active customer base while improving retention rates, with Q4 showing 2.92 million active customers (up 9.4% year-over-year). The company's deep engagement with healthcare professionals through connected networks drives both new customer acquisition and repeat purchases, with higher average order values indicating customers are willing to spend more per transaction.

Product Innovation and Category Expansion: The company's ongoing investment in new fabrics, improved functionality, and expansion into adjacent categories beyond core scrubs represents a critical growth driver. FIGS' ability to command premium pricing while maintaining strong demand demonstrates the power of its brand and the value customers place on quality and innovation in medical apparel.

Tariff and Cost Pressures: The challenging operating environment, including tariff headwinds and potential deleverage in selling and marketing expenses, poses the primary risk to profitability. Investors will scrutinize management's commentary on how effectively the company can navigate these pressures while maintaining margin expansion.

Analyst sentiment remains constructive heading into the release. Multiple firms have maintained or upgraded their ratings following the Q4 blowout, with Barclays upgrading to Strong Buy and Morgan Stanley raising its price target from $8 to $15. The consensus view suggests FIGS' brand strength, pricing power, and execution capabilities position it well to deliver another solid quarter, though the magnitude of the beat may moderate from Q4's exceptional performance. Zacks Investment Research notes the company has an Earnings ESP of +100.00%, indicating potential for another upside surprise.

Part 2: Historical Earnings Performance

FIGS has established a remarkable pattern of exceeding expectations, delivering earnings beats in each of the past four quarters with an average surprise of 187.5%. The progression tells a story of accelerating momentum: Q1 2025 broke even versus a $0.01 loss estimate (+100% surprise), Q2 posted $0.04 against a $0.02 estimate (+100%), Q3 delivered $0.05 versus $0.02 expected (+150%), and Q4 crushed estimates with $0.10 versus $0.02 consensus (+400%).

The trend shows not only consistent beats but expanding profitability, with reported EPS climbing from $0.00 to $0.10 over four quarters while estimates remained conservative. This pattern suggests analysts have been systematically underestimating FIGS' ability to drive operational leverage and margin expansion. The widening gap between reported results and estimates—culminating in Q4's 400% surprise—indicates the company is executing at a level significantly above Wall Street's expectations, driven by stronger-than-anticipated demand, pricing power, and cost management.

Note: These figures reflect diluted GAAP earnings per share, reported before non-recurring items, and may differ from the non-GAAP figures used by some sources.

Part 2.1: Price Behavior Around Earnings

FIGS reports after market close, meaning Day 0 captures anticipatory trading before results are released, while Day +1 reflects the market's first full session to digest the actual numbers.

Historical price action around earnings shows significant volatility, with an average absolute Day 0 move of 5.09% and Day +1 move of 15.31%—substantially higher than typical stock reactions. The most recent Q4 2025 report exemplifies this pattern: the stock surged 13.78% on Day 0 in anticipation, then added another 23.90% on Day +1 as investors absorbed the 400% earnings beat. However, the pattern isn't uniformly positive—Q3 2025 saw a modest 0.79% Day 0 decline followed by a 13.70% Day +1 rally, while earlier reports like Q4 2024 showed a 4.06% Day 0 gain followed by a brutal 28.34% Day +1 decline.

The data reveals FIGS tends to experience its largest moves on Day +1 (average 15.31%) rather than Day 0 (5.09%), suggesting the market waits for actual results and management commentary before making major positioning decisions. The wide Day +1 range of 14.84% indicates substantial two-way risk, with outcomes heavily dependent on whether the company beats or misses estimates and what guidance management provides. Given the recent string of massive beats, investors should prepare for potentially outsized volatility if results surprise in either direction.

Part 2.2: Options Market Expected Move

The options market is pricing an expected move of 14.77% (±$2.14) through the May 15 expiration, closely aligned with the stock's average historical Day +1 move of 15.31%. This suggests options traders are appropriately pricing in FIGS' tendency for significant post-earnings volatility, with the implied move falling right in line with what the stock has actually delivered following recent reports.

Part 3: What Analysts Are Saying

Analyst sentiment on FIGS is decidedly bullish, with a consensus rating of 4.20 out of 5.0 (Strong Buy territory) and an average price target of $17.75—representing 22.4% upside from the current $14.50 price. The rating breakdown shows 6 Strong Buy ratings, 0 Moderate Buys, 4 Holds, and no Sell ratings among the 10 analysts covering the stock, reflecting broad confidence in the company's prospects.

The sentiment trend is classified as unchanged over the past month, with the Strong Buy/Hold split remaining stable at 6/4. However, the price target range reveals meaningful divergence in views: the high estimate of $22.00 implies 52% upside, while the low target of $14.00 sits slightly below the current price, suggesting some analysts see limited near-term appreciation potential. The mean target of $17.75 represents the consensus view that FIGS has room to run as it continues executing on its growth strategy.

The stability in analyst positioning—with no recent upgrades or downgrades reflected in the month-over-month comparison—suggests the Street is waiting for Q1 results to reassess views. Given the stock's recent string of massive earnings beats and the constructive commentary from firms like Barclays (upgraded to Strong Buy) and Morgan Stanley (raised target to $15), the unchanged sentiment likely reflects analysts holding their bullish positions rather than any loss of conviction. The 22% implied upside to the consensus target provides a meaningful cushion, though investors should note the stock has already appreciated substantially from its $3.82 52-week low.

Part 4: Technical Picture

The Barchart Technical Opinion currently registers a 64% Buy signal, down from 88% a week ago and 80% a month ago, indicating some near-term momentum loss heading into earnings. Despite this recent weakening, the signal remains in Buy territory, suggesting the overall technical picture is still constructive.

Timeframe Analysis:

• Short-term (50% Buy): Moderate buy signal indicates near-term momentum has cooled but remains positive
• Medium-term (50% Buy): Neutral-to-positive reading suggests consolidation in the intermediate timeframe as the stock digests recent gains
• Long-term (100% Buy): Strong buy signal reflects robust strength in the longer-term uptrend

Trend Characteristics: The trend is characterized as Good but Weakening, suggesting FIGS maintains a fundamentally sound technical setup despite recent loss of momentum—a common pattern as stocks consolidate ahead of major catalysts like earnings.

The stock currently trades at $14.50, positioned below its 5-day ($14.67), 10-day ($15.17), 20-day ($15.22), and 50-day ($15.06) moving averages, indicating short-term weakness. However, FIGS remains well above its 100-day ($13.22) and 200-day ($10.48) moving averages, confirming the longer-term uptrend remains intact. This setup—short-term consolidation within a strong longer-term uptrend—is typical pre-earnings behavior as traders reduce positions ahead of the event.

The technical setup heading into earnings is cautiously supportive: while near-term momentum has faded with the stock trading below short-term moving averages, the strong positioning above longer-term trend indicators and the 100% Long-term Buy signal suggest the broader uptrend remains healthy. The stock's recent pullback from the $15+ area may actually provide a more attractive entry point for investors betting on another earnings beat. Key resistance sits at the 20-day moving average around $15.22, while support is found at the 100-day average near $13.22. Given the stock's tendency for large post-earnings moves (15%+ on average), the current consolidation pattern could resolve explosively in either direction depending on whether FIGS delivers another substantial beat or disappoints expectations.