Time To Worry? Analysts Just Downgraded Their FIGS, Inc. (NYSE:FIGS) Outlook
The latest analyst coverage could presage a bad day for FIGS, Inc. (NYSE:FIGS), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Shares are up 8.1% to US$5.61 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.
Following this downgrade, FIGS' eleven analysts are forecasting 2024 revenues to be US$539m, approximately in line with the last 12 months. Statutory earnings per share are supposed to plunge 55% to US$0.06 in the same period. Before this latest update, the analysts had been forecasting revenues of US$547m and earnings per share (EPS) of US$0.075 in 2024. So there's definitely been a decline in analyst sentiment in the latest consensus numbers, noting the real cut to EPS forecasts.
View our latest analysis for FIGS
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 1.3% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 21% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - FIGS is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data indicates that FIGS' revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of FIGS going forwards.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple FIGS analysts - going out to 2026, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
