Why Figs Stock Is Skyrocketing Today
What happened
The stock of Figs (NYSE: Figs) is posting explosive gains on Wednesday. The fashion-focused medical scrubs and apparel company's share price was up 23.2% as of 1:30 p.m. ET today.
In addition to rebound momentum for the broader market following a brutal sell-off at the start of the week, Figs' stock is benefiting from the company's better-than-expected fourth-quarter report. It published the results after the market closed on Tuesday, posting non-GAAP (adjusted) earnings per share of $0.09 on revenue of $128.7 million. Meanwhile, the average analyst estimate had called for adjusted per-share earnings of $0.03 on sales of roughly $128.1 million.
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So what
Revenue surged 42.7% year over year in the fourth quarter, and business posted a gross margin of 69.9% in the period. The quarter's performance meant that the company closed out the full year with sales up 59.5%, reaching $419.6 million. Figs closed out last year with 1.9 million active customers on its e-commerce platform, up 46% year over year.
In addition to stronger-than-expected sales and earnings in the fourth quarter, the company also issued guidance that came in ahead of the market's expectations. Despite big gains for the share price, Figs' stock is still down roughly 42% from market close on the day of its initial public offering last June.
Now what
Figs guided for full-year sales to come in between $550 million and $560 million this year, significantly ahead of the average analyst estimate's previous call for sales of $547.64 million. Management also said that it expects its gross margin this year to come in above 70% and its adjusted EBITDA margin to be above 20%.
After the recent gains, Figs now has a market capitalization of roughly $2.9 billion and is valued at approximately 5.3 times this year's expected sales and 67 times expected earnings.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
