Healthcare Apparel Stock Faces Diverging Signals: Institutional Buys Versus Insider Sales

A notable divergence has emerged in FIGS, Inc. (FIGS), a leading medical apparel brand, creating a compelling narrative for market observers. On one side, major institutional investors are making substantial new commitments, while on the other, the company’s own C-suite executives are capitalizing on recent share price strength through significant sales.

Strong Quarterly Performance Fuels Momentum

The recent surge of interest in FIGS shares is underpinned by a robust second-quarter 2025 earnings report that surpassed analyst forecasts. The company posted earnings per share (EPS) of $0.04 and achieved net revenue of $152.64 million, representing a solid 5.8% year-over-year increase. This performance was driven by several key growth areas:

• A 7.7% rise in scrubwear sales to $127.4 million
• A notable 19.8% jump in international revenue, which reached $22.7 million
• A significant 390 basis point expansion in the adjusted EBITDA margin to 12.9%

This operational strength is attributed to enhanced logistics, disciplined cost management, and sustained demand from both new and returning customers.

Major Funds Amplify Their Stakes

The positive operational results have not gone unnoticed by large money managers. Institutional ownership of FIGS now stands at a commanding 92%, signaling substantial confidence in the healthcare apparel sector’s prospects. In a particularly bold move, investment firm EntryPoint Capital LLC aggressively increased its stake by a remarkable 232%, building a position now valued in excess of half a million dollars.

Should investors sell immediately? Or is it worth buying Figs?

Executives Seem to Cash In

Contrasting sharply with the institutional buying spree, FIGS’ top leadership has been actively reducing their holdings. CEO Catherine Spear divested shares worth over $450,000 in mid-August. Around the same time, CFO Sarah Oughtred executed sales amounting to nearly $618,000. Collectively, insiders have offloaded more than $1 million in stock over the past three months, creating a fundamental disconnect with the outward optimism.

This insider activity introduces a note of caution, especially when considering certain headwinds. The company’s gross margin experienced slight pressure, dipping to 67% due to increased inventory provisions and tariff expenses. Management has projected an additional 150 basis point margin impact from tariffs for fiscal 2025, which it plans to mitigate through supplier diversification and strategic negotiations.

Following an impressive run that has seen the stock advance more than 20% year-to-date, FIGS shares are trading near their all-time peak. The central question for investors is whether the insider selling represents a prudent personal financial decision or a subtle signal about the company’s growth trajectory that the market may be overlooking.