Increased Demand Drove FIGS' (FIGS) 8% Revenue Growth

Baron Funds, an investment management company, released its fourth-quarter investor letter for the “Baron Focused Growth Fund”. A copy of the letter can be downloaded here. The Fund delivered strong results in the fourth quarter, appreciating 12.34% (Institutional Shares) compared to the Russell 2500 Growth Index’s (the Benchmark) 0.33 % return. The Fund returned 22.26% in 2025 compared to 10.31% return for the index. The firm highlighted its continued faith in its portfolio companies in the letter. As of December 31, 2025, the Fund’s top 10 positions hold 60.1% of net assets. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Baron Focused Growth Fund highlighted FIGS, Inc. (NYSE:FIGS) as one of the leading contributors. FIGS, Inc. (NYSE:FIGS) is a direct-to-consumer healthcare apparel company known for its scrubwear for healthcare professionals. On February 5, 2026, FIGS, Inc. (NYSE:FIGS) stock closed at $10.61 per share. One-month return of FIGS, Inc. (NYSE:FIGS) was -10.01%, and its shares are up 99.44% over the past twelve months. FIGS, Inc. (NYSE:FIGS) has a market capitalization of $1.745 billion.

Baron Focused Growth Fund stated the following regarding FIGS, Inc. (NYSE:FIGS) in its fourth quarter 2025 investor letter:

"FIGS, Inc. (NYSE:FIGS) designs and sells scrubwear for health care professionals through a digitally native, direct-to-consumer strategy. Shares rose after the company reported quarterly results that beat expectations and raised its outlook for revenue and profits for the remainder of the year. FIGS’ revenue grew 8% due to robust customer demand for its health care apparel, supported by improving execution and normalizing industry trends. Demand for health care apparel remains largely non-discretionary and replenishment driven. The company also delivered stronger than-expected profitability, benefiting from meaningful operating leverage while continuing to invest in the business. In addition, FIGS continues to expand its three key growth initiatives: international markets, TEAMS (its enterprise and group ordering business), and retail. Internationally, the company refined its growth strategy and is targeting 60 planned markets by year-end, up from 33. Within TEAMS, FIGS continues to add talent and develop new technology solutions to support growth. In retail, the company plans to open three stores (New York, Houston, and Chicago) with further expansion anticipated into 2026."

FIGS, Inc. (NYSE:FIGS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 25 hedge fund portfolios held FIGS, Inc. (NYSE:FIGS) at the end of the third quarter, up from 24 in the previous quarter. While we acknowledge the potential of FIGS, Inc. (NYSE:FIGS) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered FIGS, Inc. (NYSE:FIGS) and shared a list of high growth mid-cap stocks to buy. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.