Figs (NYSE:FIGS) recently went public, and it is so much more than just a "scrubs company." In this Fool Live video clip, recorded on July 8, contributor Matt Frankel, CFP, explains to colleague Brian Feroldi why he's ready to open a position in this wonderful business. 

Matt Frankel: I am talking about a company that is already public called Figs, ticker symbol is F-I-G-S. This is a healthcare apparel company. Now, that might sound like a boring business to a lot of people, but it's really not. They're trying to revolutionize a business that hasn't had any significant innovation in about 100 years. My wife is a healthcare professional, and this is what got the company on my radar. One of these [holds up Figs-branded package] shows up on my doorstep at least every few weeks. People are very loyal to this company, they have 1.5 million active customers. They did about $260 million in revenue in 2020. That was 138% year-over-year growth. This brand is catching on very quickly. This is a founder-led company -- its two co-founders are its two co-CEOs. And for an apparel company, the margins here are fantastic. A 70% gross margin from an apparel company, 23% adjusted EBITDA margin. This is a profitable company, which is a weird word to use in conjunction with an IPO these days.

They were free cash flow positive in 2020, then almost $20 million in free cash flow off of that $260 million in revenue. Pretty good profit margins, especially for such a high-growth apparel company. And 62% of its sales are from repeat customers. I mentioned that one of these envelopes shows up on my doorstep every few weeks. It's because people who buy this product continue to buy the product. And they're not just about scrubs -- they're really branching off into other lifestyle branded items for healthcare professionals. My wife swears by their compression socks. She says they're the best compression socks that she's ever worn. She works in an ICU nursing unit, and I don't know if you're familiar -- those are 12-hour shifts, you are on your feet for a long time. So any apparel that can really alleviate that... I don't want to be on my feet for 12 hours, I'm spoiled, I get to sit at a desk all day. I can't tell if Brian's standing right now or not, but I'm not.

Brian Feroldi: I stand.

Frankel: Brian stands. I probably should. But it's a really impressive story. They went public about a month ago, very late May, at a share price of $22. They've already almost doubled from that, they're at $44.

Jon mentioned that a lot of times IPOs will skyrocket on day one. This is one I missed the boat on, TD Ameritrade actually participated in this and offered me the IPO, and I said no at first because I didn't really get it. I didn't get the business still I started to dig into it, and a lot of people don't. I cover real estate most of the time, and a lot of people don't get those [companies] because the businesses sound boring, and a "scrubs company" sounds boring to a lot of people. But the addressable market opportunity here is huge. Healthcare is a big business. They commissioned to study and found that in the U.S. alone, $12 billion with a "B" of healthcare apparel is sold every year. Most of this comes from the legacy companies. Can you tell me the No. 2 scrubs brand?

Feroldi: Cintas (NASDAQ:CTAS)?

Frankel: Right, that's the point. Is that most healthcare apparel companies don't have brand recognition. Most make a very generic product. Have you ever seen a brand label on a pair of scrubs? If I have, I don't remember what it was. And that's the point -- they're really trying to disrupt a market that has not been disrupted in this century. So, $12 billion market opportunity domestically, $70 billion globally, and healthcare is a growing market too. Healthcare employment is expected to increase by about 15% over the next decade, so that market is going to grow even further. I mentioned they did about $260 million of sales last year. That's just scratching the surface of this opportunity. Given that 70% gross margin, there is a lot of money to be made here.

They trade at a $7 billion market cap today, so not a cheap stock, that's about 27 times sales, which is a hefty multiple for an apparel company. But given the growth rate, I have said, more than doubled revenue in the past year, the loyal customer base, their customer count has roughly doubled over the past year. The loyalty, the frequency of purchases by their customer base, the market opportunity, and the fact that it's a profitable company and growing its profits rapidly really got me interested in this company. This is one that's really on my radar. I'd hoped to get a little closer to the IPO price, I feel like I missed the boat on that. The value investor in me wants a pullback. But I could see myself getting into this at the current price, I like it that much.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.