Figs (FIGS) is showing signs of a sustained recovery as recent results indicate the company has re-established its strategic footing, Oppenheimer said in a note Friday.

The investment firm noted that as the COVID-19 pandemic moved from tailwind to headwind for Figs, the maker of healthcare scrubwear and its shares were hit by major supply chain disruptions and demand dislocations "which stressed a still largely sub-scale business model."

However, Oppenheimer said it is now "increasingly optimistic that improved operational disciplines and easing sector and macro hindrances are underpinning a re-strengthening in results and helping to clear a path back toward peak performance metrics."

Figs' shares have rebounded but are still under-appreciating the company's "intermediate to longer-term sales and profit potential," the note said.

Oppenheimer now expects Q1 adjusted EBITDA of $10.8 million on sales growth of about 22%, above the consensus estimate of $10.7 million. For 2027, the investment firm expects Figs to post adjusted EBITDA of $106.9 million, also above the consensus figure of $102.9 million.

The firm upgraded Figs to outperform with a $22 price target.

Shares of Figs were up nearly 3% in Friday trading.

Price: 14.62, Change: +0.40, Percent Change: +2.78