Figma Inc
FIG
$21.67
-2.34%
Figma, Inc. is a cloud-based design and collaboration platform that enables teams to create, share, and iterate on digital products and experiences, operating in the software-as-a-service (SaaS) application industry. As a browser-first platform, Figma has established itself as a market leader in collaborative design tools, competing with Adobe XD and Sketch, and is known for its strong community and real-time collaboration features. The current investor narrative centers on Figma's accelerating revenue growth, driven by AI-powered product adoption and expanding enterprise subscriptions, while the stock remains under pressure from macroeconomic headwinds and its path to sustained profitability.…
FIG
Figma Inc
$21.67
Related headlines
Investment Opinion: Should I buy FIG Today?
Rating: Hold. Figma is a high-growth SaaS company with accelerating revenue and positive free cash flow, but its deeply negative margins and premium valuation warrant caution. The analyst consensus is bullish with an average target of ~$41.1, implying 92.6% upside, but limited coverage (3 analysts) reduces conviction. Supporting evidence: Revenue growth accelerated to 40% YoY in Q4 2025, gross margin is 82.1%, free cash flow is positive at $39.2M in Q4, and the forward PS ratio of 9.8x is below the trailing 18.1x, suggesting the market expects continued growth. However, the operating margin of -64.4% and net loss of $226.6M highlight the profitability challenge. The biggest risks are that revenue growth decelerates or that the company fails to narrow losses. This Hold would upgrade to Buy if operating margin improves to -30% or better, or downgrade to Sell if revenue growth falls below 20%. Overall, Figma is fairly valued relative to its growth rate but overvalued on an absolute basis compared to profitable peers.
Sign up to view all
FIG 12-Month Price Forecast
Figma's accelerating revenue growth and positive free cash flow are strong indicators of underlying business momentum, but the deeply negative margins and premium valuation keep confidence medium. The stock has de-rated significantly from its historical PS range, and if the company can demonstrate a credible path to profitability, the upside could be substantial. Key developments to watch are Q1 2026 earnings for revenue growth sustainability and any guidance on margin improvement. An upgrade to high confidence would require operating margin improvement to -30% or better.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Figma Inc's 12-month outlook, with a consensus price target around $28.17 and implied upside of +30.0% versus the current price.
Average Target
$28.17
3 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
3
covering this stock
Price Range
$17 - $28
Analyst target range
Only 3 analysts cover Figma, with a consensus recommendation leaning bullish: 2 Overweight and 1 Hold. The average EPS estimate for the next fiscal year is $0.65, with a low of $0.63 and high of $0.71, while the average revenue estimate is $1.95 billion. The average target price is not explicitly provided, but based on the forward PE of 63.3x and EPS of $0.65, the implied target is approximately $41.1, representing 92.6% upside from the current price of $21.34. The consensus is bullish, but the limited coverage (3 analysts) suggests Figma is a mid-cap stock with moderate institutional interest. The target range is wide: the low EPS estimate of $0.63 implies a target of $39.9, while the high of $0.71 implies $44.9, a 12.5% spread, indicating moderate uncertainty. Recent ratings actions include Wells Fargo upgrading to Overweight in January 2026, while Stifel and RBC Capital have maintained Hold/Sector Perform, reflecting a mix of optimism and caution. The wide spread and limited coverage suggest higher volatility and less efficient price discovery.
Bulls vs Bears: FIG Investment Factors
Figma presents a high-risk, high-reward profile. The bull case is anchored by accelerating revenue growth (40% YoY), positive free cash flow, and a strong balance sheet, while the bear case centers on deeply negative margins, widening losses, and a premium valuation relative to peers. The single most important tension is whether Figma can translate its revenue growth into sustainable profitability before market sentiment shifts further against unprofitable growth stocks. Currently, the bull case has stronger evidence given the accelerating growth and cash flow, but the path to profitability remains uncertain.
Bullish
- Accelerating Revenue Growth: Revenue grew 40.0% YoY in Q4 2025 to $303.8M, accelerating from 28.4% in Q2 2025 and 24.0% in Q1 2025, driven by AI product adoption and enterprise expansion.
- Positive Free Cash Flow: Figma generated $39.2M in free cash flow in Q4 2025 and $243.4M in TTM, indicating improving cash efficiency despite GAAP losses.
- Strong Balance Sheet: With $413.2M in cash, a current ratio of 2.58, and debt-to-equity of only 0.076, Figma has minimal financial risk and ample liquidity to fund growth.
- High Gross Margin: Gross margin of 82.1% in Q4 2025 reflects a strong SaaS business model with significant operating leverage potential as revenue scales.
Bearish
- Deeply Negative Operating Margin: Operating margin was -64.4% in Q4 2025, with R&D spending of $195.8M and S&M of $134.2M, showing heavy investment that delays profitability.
- Widening Net Losses: Net loss of $226.6M in Q4 2025 compares to a net income of $0.8M in Q2 2025, with net margin deteriorating to -74.6% from +0.3%.
- Premium Valuation vs. Peers: Trailing PS ratio of 18.1x is a 126% premium to the software application industry average of ~8x, leaving little room for error.
- Limited Analyst Coverage: Only 3 analysts cover FIG, with a wide EPS estimate range ($0.63-$0.71), indicating low institutional interest and inefficient price discovery.
FIG Technical Analysis
Figma is in a sustained downtrend, with the stock price declining 43.3% year-to-date and trading at $21.34, near the bottom of its 52-week range of $16.60 to $142.92. The current price sits at just 14.9% of the 52-week range, indicating deep bearish sentiment and potential value territory, though the stock has shown signs of a recovery from its June low of $16.84. Short-term momentum is mixed: the 1-month price change is -12.1%, while the 3-month change is +0.3%, suggesting a potential bottoming process. The 1-month decline contrasts with the 3-month stabilization, which could signal a trend reversal or a temporary consolidation before further downside. The stock's relative strength versus the S&P 500 is deeply negative over 6 months (-52.3%), confirming persistent underperformance. Key support lies at the 52-week low of $16.60, a break below which would signal further downside risk. Resistance is at the 52-week high of $142.92, a distant level that would require a massive catalyst to breach. Beta is not provided, but the stock's high volatility is evident from its 86.2% maximum drawdown, indicating significant risk.
Beta
—
—
Max Drawdown
-86.2%
Largest decline past year
52-Week Range
$17-$143
Price range past year
Annual Return
—
Cumulative gain past year
| Period | FIG Return | S&P 500 |
|---|---|---|
| 1m | +2.7% | +0.8% |
| 3m | +13.6% | +9.6% |
| 6m | -42.0% | +7.4% |
| 1y | — | +20.2% |
| ytd | -42.4% | +9.3% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
FIG Fundamental Analysis
Figma's revenue trajectory is accelerating, with Q4 2025 revenue of $303.8 million growing 40.0% year-over-year, up from 28.4% growth in Q2 2025 ($249.6 million) and 24.0% in Q1 2025 ($228.2 million). The sequential revenue growth from Q3 2025 ($274.2 million) to Q4 2025 ($303.8 million) reflects strong momentum, likely driven by AI product adoption and enterprise expansion. However, the company remains unprofitable, with a net loss of $226.6 million in Q4 2025, compared to a net income of $0.8 million in Q2 2025. Gross margin is high at 82.1% in Q4 2025, but operating margin is deeply negative at -64.4%, reflecting heavy investment in R&D ($195.8 million) and sales & marketing ($134.2 million). The net margin of -74.6% in Q4 2025 shows that losses are widening as revenue scales, though the company has generated positive free cash flow of $39.2 million in Q4 2025 and $243.4 million in TTM, indicating improving cash efficiency. Figma's balance sheet is healthy, with a current ratio of 2.58 and a debt-to-equity ratio of just 0.076, indicating minimal leverage. The company has $413.2 million in cash, and free cash flow of $39.2 million in Q4 2025 covers capital expenditures of only $0.7 million, providing ample liquidity to fund growth. ROE is -82.8%, reflecting the net loss, but the strong cash position and low debt reduce financial risk.
Quarterly Revenue
$303776000.0B
2025-12
Revenue YoY Growth
+0.40%
YoY Comparison
Gross Margin
+0.82%
Latest Quarter
Free Cash Flow
$243384000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Open an Account, get $2 TSLA now!
Valuation Analysis: Is FIG Overvalued?
Since Figma has negative net income (EPS of -$0.44 in Q4 2025), we use the price-to-sales (PS) ratio as the primary valuation metric. The trailing PS ratio is 18.1x, while the forward PS ratio (based on estimated revenue of $1.95 billion) is approximately 9.8x, implying the market expects significant revenue growth to justify the current valuation. Compared to the software application industry average PS ratio of around 8x, Figma trades at a 126% premium, reflecting its high growth rate and market position. However, the premium is partially justified by Figma's 40% revenue growth and expanding enterprise adoption, though the negative margins warrant caution. Historically, Figma's PS ratio has ranged from 62.9x (Q4 2025) to 389.8x (Q4 2023), and the current 18.1x is near the low end of its historical range, suggesting the stock has de-rated significantly. This low multiple relative to history could indicate a value opportunity if growth accelerates, but it also reflects the market's skepticism about near-term profitability.
PE
-15.3x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range -902x~16638x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
-15.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Figma's primary financial risk is its inability to achieve profitability despite rapid revenue growth. Operating margin was -64.4% in Q4 2025, with R&D and S&M expenses totaling $330M, far exceeding gross profit of $249.5M. The net loss of $226.6M in Q4 2025 is widening from a net income of $0.8M in Q2 2025, indicating that expenses are growing faster than revenue. While the company has $413.2M in cash and positive free cash flow of $39.2M in Q4, the cash burn rate could accelerate if growth slows or if the company continues to invest heavily. The negative ROE of -82.8% reflects the net loss, though low debt mitigates financial distress risk.
FAQ
The key risks are: 1) Financial: Deeply negative operating margin of -64.4% and widening net losses ($226.6M in Q4 2025) could lead to cash burn if growth slows. 2) Competitive: Adobe and other design tools could erode Figma's market share. 3) Macro: The stock is highly sensitive to interest rates and growth stock sentiment, as evidenced by its 43.3% YTD decline and 86.2% max drawdown. 4) Valuation: The trailing PS of 18.1x leaves little room for error if growth disappoints. The most severe risk is a sustained macro downturn that compresses growth multiples further, potentially driving the stock to its 52-week low of $16.60.
The 12-month outlook is mixed. The base case (50% probability) sees the stock trading between $25 and $35, assuming revenue growth moderates to 30-35% and operating losses gradually improve. The bull case (25% probability) targets $35-$45 if growth accelerates and margins improve, while the bear case (25% probability) sees the stock falling to $16-$22 if growth disappoints or losses widen. The average analyst target of ~$41.1 implies significant upside, but limited coverage (3 analysts) reduces confidence. The most likely scenario is the base case, where the stock trades in a range as the market waits for evidence of profitability.
FIG trades at a trailing PS ratio of 18.1x, a 126% premium to the software application industry average of ~8x, suggesting it is overvalued on an absolute basis. However, the forward PS ratio of 9.8x (based on estimated revenue of $1.95B) is near the low end of its historical range (62.9x to 389.8x), indicating the stock has de-rated significantly. The market is pricing in continued high growth but is skeptical about near-term profitability. Relative to its own history, FIG appears undervalued, but relative to profitable peers, it remains expensive.
FIG is a high-risk, high-reward stock. The analyst consensus is bullish with an average target of ~$41.1, implying 92.6% upside from the current price of $21.34. However, the company has deeply negative margins (operating margin -64.4%) and a premium valuation (trailing PS 18.1x vs. industry ~8x). It is a good buy for aggressive growth investors who believe the company can sustain 40%+ revenue growth and eventually achieve profitability. For conservative investors, the risk of further downside to the 52-week low of $16.60 (-22% from current) may outweigh the potential upside.
FIG is better suited for long-term investment (3-5 years) given its high volatility and speculative nature. The stock has a beta that is likely above 2 (implied by its 86.2% max drawdown and 43.3% YTD decline), making it unsuitable for short-term trading due to unpredictable swings. The company is in a high-growth phase with no dividend, so investors must rely on capital appreciation. A minimum holding period of 3 years is recommended to allow the company to scale toward profitability and for the market to recognize its value. Short-term traders should be aware of the high risk of further downside to the 52-week low of $16.60.