Figs (FIGS -1.14%) is the largest direct-to-consumer platform in the healthcare apparel industry. The company made its public debut in May 2021, and like many recent IPOs, the stock price has fallen sharply. In fact, its share price is down more than 50% from its all-time high. Even so, there's a lot to like about this business, including strong revenue growth, positive free cash flow, and an intensely loyal customer base.

In this Backstage Pass video, recorded on Jan. 4, Motley Fool contributor Jamie Louko explains why Fig could be a lucrative long-term investment.

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Jamie Louko: Figs is a high-quality hospital scrubs maker. They're really trying to have their customers enjoy what they wear when they're at work, because these -- whether it's in a dentist office or in a hospital -- people are wearing these scrubs for 10, 12 hours a day or even more.

So this company IPO'd back in May. What I really like about this company is that their customers are so brand loyal. And that's how I heard about this company. Before it even IPO'd and my girlfriend wouldn't stop talking about it. I've bought her more Figs scrubs than I have invested in the company, which I think that's crazy. But let's go to their competitive edge. Like I said, their customers are brand loyal and that's developed them a super strong brand name. I saw Trevor smiling over there when I brought up Figs and it might be because he knows something from the company, but they're so known in the hospital world and among healthcare professionals. That's just because their product is so awesome, and they are trying to focus on direct-to-consumer business, which is the other competitive edge that I find with this business.

Unlike most scrunch makers, they are primarily focused on going to consumers instead of partnering with hospitals or other healthcare offices like dentist offices, etc. That's really how they're gaining their brand's name and their customer loyalty because they are a direct-to-consumer business. Excuse me.

This has shown up in their financials. This is a scrubs maker, yet their gross margins are almost 73%, which is absolutely insane for any apparel maker. Their brand name has caught on so much that their sales and marketing expenses are 35% of revenue. We looked at other companies that are spending 50%, 60%, 70% of their revenue on sales and marketing, but their brand name has grown into something so strong that they really don't have to spend a ton on that. Naturally, this has gone to the top and the bottom lines. They are profitable, which is something you don't see all that often with IPOs, but they're profitable and they have generated a ton of free cash flow, almost $51 million for the first three quarters of 2021. And their revenue growth is strong at 34%.