Should Investors Sell Figs as Security Benefit Liquidates its $3.3 Million Position in the Stock?

The recent liquidation of Security Benefit's $3.3 million stake in FIGS, Inc. (NYSE: FIGS) has sparked questions about the stock's trajectory. However, a closer look at the company's fundamentals, its insulation from AI-driven market volatility, and its undervalued growth potential in a resilient niche suggests that investors may be better served holding or even increasing their positions.

A Strategic Exit, Not a Signal of Weakness

Security Benefit Life Insurance Co. sold 565,560 shares of FIGS in Q3 2025, fully exiting its position and reducing its assets under management by 1.51% according to Nasdaq reports. While institutional exits often raise red flags, this move appears to reflect portfolio rebalancing rather than a lack of confidence in FIGS. The stock has surged 103% year-to-date as of Nov. 24, 2025, outperforming the S&P 500 by 87 percentage points. This growth underscores FIGS' ability to thrive in a market where AI-driven volatility has shaken other sectors.

Resilience in a Human-Driven Niche

FIGS operates in a healthcare apparel niche that remains largely insulated from AI disruption. The company's focus on direct-to-consumer products-scrubs, lab coats, and activewear for healthcare professionals-benefits from a sector where demand for human labor is growing. According to a 2025 Menlo Ventures report, healthcare organizations have adopted AI tools at twice the rate of other industries, but these applications are concentrated in administrative automation and clinical workflows. As FIGS' CEO emphasized in Q3 earnings, the company's growth stems from "operational efficiency and community engagement," not reliance on AI.

This human-centric model is a key differentiator. While AI has fueled volatility in tech and finance-exemplified by the $1 trillion market plunge following Deepseek's open-source AI model announcement in January 2025-healthcare apparel demand is driven by tangible factors: an aging population, nurse practitioner shortages, and the expansion of outpatient care. FIGS' international revenue grew 12% year-over-year in Q3 2025, further diversifying its exposure to regional economic shifts.

Financials Reflect a Turnaround

FIGS' Q3 2025 earnings highlight a dramatic turnaround. The company reported net income of $8.75 million, reversing a $1.7 million loss in the same period in 2024. This improvement is attributed to cost-cutting measures and a product-driven strategy that prioritizes customer loyalty over speculative tech investments. With a price-to-earnings ratio that remains low relative to its growth, FIGS appears undervalued. Telsey Advisory Group recently raised its FY2026 EPS estimate from $0.07 to $0.12, maintaining a "Market Perform" rating and a $9.00 price target, which exceeds the current consensus of $6.90.

Why AI Volatility Won't Dent FIGS

The broader market's sensitivity to AI advancements-such as high-frequency trading algorithms and "black box" decision-making-has created short-term volatility according to market analysis. However, healthcare apparel is not a sector where AI replaces human labor or disrupts supply chains in a way that threatens demand. While AI may optimize inventory management or logistics, these tools enhance rather than undermine the industry. As noted in an Investing.com analysis, FIGS' SWOT profile highlights its strength in a "cautious outlook" environment, where stability is a competitive advantage.

Conclusion: A Buy, Not a Sell

Security Benefit's exit is a minor blip in a broader narrative of resilience. FIGS' financial turnaround, international expansion, and alignment with a labor-intensive healthcare sector position it to outperform in an era of AI-driven market swings. With analyst price targets suggesting upside potential and a business model that thrives on human connection rather than algorithmic efficiency, investors should view this as an opportunity to capitalize on an undervalued growth story.