iFabric is just getting started, this analyst says

Beacon Securities analyst Doug Cooper says iFabric’s (iFabric Stock Quote, Chart, News, Analysts, Financials TSX:IFA) medical scrubs opportunity is being highlighted by the recent rally in medical apparel manufacturer FIGS, an American maker of medical scrubs.

In an Oct. 13 update, Cooper maintained his “Buy” rating and $9.50 price target on iFabric, pointing to FIGS shares reaching a multi-year high despite broader weakness in consumer stocks.

FIGS has risen more than 100% since early August, when the company reported better-than-expected Q2 results that included 29% year-over-year revenue growth and EBITDA margin expansion to 18.6% from 12.9%.

Cooper pointed to iFabric’s products, which offer anti-microbial properties, along with liquid repellency against water, blood and other fluids, features he said are important to retailers and healthcare workers.

FIGS now has a market capitalization of about US$3-billion and trades at just under four times consensus fiscal 2027 sales estimates.

Cooper said the move is notable because FIGS is a consumer products company focused on healthcare, while many consumer names are trading near 52-week or multi-year lows.

“We think this is for the simple reason that healthcare and the medical scrubs segment in particular, is not only less competitive than the general apparel market, but it is the only consumer segment that is growing,” Cooper said.

The analyst noted that healthcare is the only segment of the U.S. economy adding jobs and is expected to add more than two million jobs between 2025 and 2035.

Year-to-date, healthcare has accounted for about 65% of net new U.S. jobs.

Cooper said the equation is straightforward: more healthcare workers should mean more scrub sales. And FIGS has done well with its direct-to-consumer model and holds about 10% market share, but its premium pricing could limit further share gains.

Most medical scrub sales still occur through big-box retailers, where iFabric has won stores and shelf space at Walmart U.S., Target, Costco Canada and Amazon.ca.

Cooper pointed to iFabric’s products, which offer anti-microbial properties, along with liquid repellency against water, blood and other fluids, features he said are important to retailers and healthcare workers.

Cooper believes iFabric has taken share from Careismatic Brands, whose brands include Cherokee, Dickies and Scrubstar. Careismatic recently emerged from Chapter 11 and generated about US$700-million of sales at its peak.

The analyst said that gives investors a sense of iFabric’s potential in medical scrubs, particularly as the overall market continues to grow.

“We believe IFA’s medical scrubs brands are very early in their life-cycle with most relevant consumers unaware of their offering,” Cooper said.

He noted that scrubs represent about 20% to 25% of iFabric’s total sales today, but offer the company’s best growth potential.

“We believe the above speaks to the vast market opportunity in front of IFA’s scrubs segment as store count, shelf space and market awareness increases,” Cooper said.

iFabric trades at 1.4 times Cooper’s fiscal 2027 sales forecast, a 65% discount to FIGS.

Cooper expects iFabric to generate Adjusted EBITDA of $7.2-million on revenue of $62-million in fiscal 2026, improving to Adjusted EBITDA of $14.6-million on revenue of $87.1-million in fiscal 2027.

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