There's Reason For Concern Over FIGS, Inc.'s (NYSE:FIGS) Massive 28% Price Jump

The FIGS, Inc. (NYSE:FIGS) share price has done very well over the last month, posting an excellent gain of 28%. The last 30 days bring the annual gain to a very sharp 86%. Following the firm bounce in price, you could be forgiven for thinking FIGS is a stock not worth researching with a price-to-sales ratios (or "P/S") of 2.5x, considering almost half the companies in the United States' Luxury industry have P/S ratios below 0.7x. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's as high as it is. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. View our latest analysis for FIGS NYSE:FIGS Price to Sales Ratio vs Industry November 11th 2025 What Does FIGS' P/S Mean For Shareholders? Recent revenue growth for FIGS has been in line with the industry. One possibility is that the P/S ratio is high because investors think this modest revenue performance will accelerate. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason. Keen to find out how analysts think FIGS' future stacks up against the industry? In that case, our free report is a great place to start. How Is FIGS' Revenue Growth Trending? The only time you'd be truly comfortable seeing a P/S as high as FIGS' is when the company's growth is on track to outshine the industry. If we review the last year of revenue growth, the company posted a worthy increase of 5.9%. The solid recent performance means it was also able to grow revenue by 19% in total over the last three years. Therefore, it's fair to say the revenue growth recently has been respectable for the company. Turning to the outlook, the next three years should generate growth of 6.8% per year as estimated by the ten analysts watching the company. Meanwhile, the rest of the industry is forecast to expand by 6.8% each year, which is not materially different. With this in consideration, we find it intriguing that FIGS' P/S is higher than its industry peers. Apparently many investors in the company are more bullish than analysts indicate and aren't willing to let go of their stock right now. Although, additional gains will be difficult to achieve as this level of revenue growth is likely to weigh down the share price eventually. The Final Word The large bounce in FIGS' shares has lifted the company's P/S handsomely. It's argued the price-to-sales ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator. Seeing as its revenues are forecast to grow in line with the wider industry, it would appear that FIGS currently trades on a higher than expected P/S. The fact that the revenue figures aren't setting the world alight has us doubtful that the company's elevated P/S can be sustainable for the long term. A positive change is needed in order to justify the current price-to-sales ratio. A lot of potential risks can sit within a company's balance sheet. You can assess many of the main risks through our free balance sheet analysis for FIGS with six simple checks. If you're unsure about the strength of FIGS' business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.