Just noticed something interesting about FIGS that's worth thinking through. Medical apparel company FIGS has absolutely crushed it lately—stock is up nearly 260% over the past year and just hit prices it hasn't seen since 2022. Yet here's the head-scratcher: Wall Street analysts are bullish on the fundamentals, but their price targets are sitting around $12.25 while the stock is already trading above $17. That's a pretty wide gap.

So what's actually happening here? The earnings story is genuinely solid. FIGS just reported Q4 results that showed 33% revenue growth, hitting $200 million in a single quarter. Full-year revenue came in at $630 million, up 14% year-over-year. Their core scrubwear business—which makes up over three-quarters of sales—jumped 35%. International sales surged 55%. Even with tariff headwinds, profitability was strong. The company also got some nice PR from outfitting Team USA's medical team at the Winter Olympics.

Management is painting an optimistic picture for 2026 too, expecting 10-12% revenue growth and improving margins. They're talking about expanding into new international markets and continuing buybacks. Wall Street definitely noticed. Barclays upgraded to Strong Buy, KeyCorp moved to Overweight with a $17 target, and even Goldman Sachs flipped from Strong Sell to Hold. BTIG and Telsey Advisory also raised their targets.

But here's where it gets interesting. FIGS is now trading at a P/E ratio around 90. Compare that to lululemon, which is trading at a P/E under 12, and you start to see why analysts might be cautious despite liking the business. The stock has basically doubled Morgan Stanley's $8 target from January and is already above even the most bullish analyst price target.

It reminds me of that classic disconnect between business quality and stock valuation. FIGS clearly turned things around from its post-pandemic crash—it was trading below $4 just last year. The company's execution is real, the demand is real, the margins are improving. But at current prices, investors are already pricing in a lot of that future growth.

The question isn't really whether FIGS is a good company anymore. The question is whether the stock can keep running or if we're looking at a pullback from here. Fundamentals are strong, but valuation is stretched. Worth monitoring, but the risk-reward at these levels looks pretty interesting for anyone thinking about it.