Are My Methods Accurate?


I have reversed engineered many different direct-to-consumer brands. And many probably have the question: Are his numbers correct?

Well, here is an opportunity to fact-check me. I am making my call on Figs’ Q4 revenue. Figs is a publicly-traded company and they will release their Q4 earnings in about a month. Let’s see if my method leads to accurate estimations.

Here is my video breakdown of Figs:

Figs Background 

Figs was launched in 2013 by two female entrepreneurs: Heather Hasson and Trina Spear.

The two started selling their hospital scrubs out of their car on the street of Los Angeles during shift changes at nearby hospitals.

They found out quickly the way healthcare workers purchased their work clothes was broken. No one was bringing the clothes to the healthcare workers. Thus, Figs was born to be a direct-to-consumer healthcare apparel retailer.

Figs IPO

Figs went public in May of 2021 with a valuation of about $4.6B. Figs’ stock price over the summer rose above $40/share, giving them a valuation of around $7B. However, after Q3 earnings (which were positive and Figs raised their yearly revenue guidance) the stock slid from $40 to under $35.

Over the next couple of months, the stock price would continue to slide and would level off around the mid $20s after their CFO announced his retirement.

Q4 Results

Since Figs is a publicly-traded company, we already know what their Q1-Q3 results are for 2021. They will announce Q4 earnings sometime in early February 2022. However, through my tracking methods, I have a very good estimate of what their Q4 revenues already are.

Quarterly Revenues:

Q1 2021: $87M

Q2 2021: $101M

Q3 2021: $103M


Figs has told us that their average order value is $102. For Q4, I suspect this will be reduced slightly but will still hover around the $100 mark.

For Figs to reach their revenue guidance of $410M for total 2021, they will need to generate $119M in revenue for Q4.

I can see that in Q4 2021, Figs received 1,260,000 orders. At an average order value of $100. I estimate Figs to come in at $126M for Q4.

Total 2021 revenue for Figs will be around $417M – $418M, beating their guidance.

Now, I have no idea how this will affect their stock price. Figs released positive Q3 earnings and saw their valuation drop by about 40% over the next couple of months.


We know Figs will generate over $400M in total revenue in 2021. At a current market cap of about $4B, Figs is trading at about 10X their sales.

Determining what a fair valuation for Figs is somewhat difficult due to the fact that they may be the only pure-play direct to consumer publicly-traded company. There are not many apples-to-apples comparisons to determine what a fair multiple of sales is for this business. 

However, I have looked at 3 somewhat similar type businesses for comparisons: 

  1. Nike trades at around 6x their sales
  2. Lulu Lemon trades at around 9x their sales
  3. Under Armour trades at around 2x their sales

Figs has stated that they believe they only have 3% of their total addressable market (TAM) in the United States and they have not even scratched the surface of selling internationally yet.

What do you think is a fair valuation for Figs?


Figs uses a third-party logistics company called Whip Lash. The orders I have received from Figs have shipped out of their California warehouse (which surprises me because I am in Massachusetts).

Contribution Margin

Figs cost of goods sold is about 27% of their revenue (73% gross margins). I estimated their average shipping cost to be about $9 per order using Fedex Home Delivery. 

Since their average order value is about $100, that makes their cost of goods sold about $27 on that order. The shipping cost is about $9 for that order. Factoring in processing fees and 3PL fulfillment fees, Figs generates about $60 of contribution margin on every order. 



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