Billionaire Ron Baron Is Betting Big on FIGS Stock

  • Ron Baron disclosed a roughly $100 million stake in Figs (FIGS).
  • Baron Capital owns 2.4 million shares of the company as of June 30.
  • Shares of FIGS stock are down over 55% year to date.
FIGS stock - Billionaire Ron Baron Is Betting Big on FIGS Stock

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Shares of Figs (NYSE:FIGS) are up over 10% after billionaire Ron Baron disclosed a roughly $100 million investment into the healthcare apparel company. Baron currently has a net worth of about $4.4 billion and founded Baron Capital in 1982. Today, he still serves as the firm’s CEO, chairman and portfolio manager.

During Q2, Figs reported revenue of $122.2 million, up 20.9% year-over-year and beating the consensus analyst estimate of $118 million. Revenue from scrubwear accounted for 85% of revenue, while non-scrubwear accounted for the rest. During the quarter, Figs launched new products like footwear and underscrubs.

Meanwhile, adjusted earnings per share tallied in at 3 cents, beating the estimate for 2 cents. Active customers totaled an impressive 2 million, up 26.2% from a year ago.

Ron Baron Bets Big on FIGS Stock

The fund manager characterized Figs as the “Lululemon of healthcare.” As of June 30, Baron Capital owned 2.4 million shares of FIGS stock. In Baron’s Q2 quarterly report, he attributes the company’s recent decline to “a combination of poor market conditions for newly public companies and a reduction in guidance given the volatile backdrop for consumer spending.”

However, Baron believes that brighter days are ahead. He explained that Figs is a disruptor in the scrubs industry and has a superior product when compared to its competitors. He adds that Figs has significant brand power in a large addressable market.

Did Baron Call the Market Bottom?

CNBC describes Baron as one of the few to correctly call the recent market bottom. On June 17, Baron stated that current market conditions warranted a “once-in-a-lifetime buying opportunity.” June 17 was the day the S&P 500 hits its 52-week low, and the index has rebounded by 14% since then. Baron added:

I can’t tell you this was the bottom. Who knows. But the bottom line is that these are all really attractive prices, really attractive time and we’ve been buying then, buying since and buying continuously.

In the past few months, he has also invested about $100 million into SpaceX and remains bullish on Tesla (NASDAQ:TSLA). Specifically, Baron is focusing on companies that can provide a hedge against inflation with growth rates that are higher than the overall economy.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.


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