Figma's Stock Rises Amid Market Gains Despite Recent Declines
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 18 2024
0mins
Should l Buy FIG?
Source: Coinmarketcap
Figma Inc's stock has increased by 5.87%, reaching a 5-day high, as the broader market shows positive momentum with the Nasdaq-100 and S&P 500 both up.
Despite the recent rise, Figma's stock has faced significant challenges, including a 25% decline from its IPO price and ongoing concerns about its financial health. The company reported a net loss exceeding $1 billion, which has raised questions about its profitability. However, analysts note that Figma's revenue growth of 41% year-over-year and its strong cash flow position indicate potential for long-term recovery, even as the market reassesses SaaS valuations.
The implications of Figma's recent performance suggest that while short-term fluctuations may cause volatility, the company's growth potential in a $33 billion addressable market could attract long-term investors looking for opportunities in the design software sector.
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Analyst Views on FIG
Wall Street analysts forecast FIG stock price to rise
9 Analyst Rating
3 Buy
6 Hold
0 Sell
Moderate Buy
Current: 25.860
Low
38.00
Averages
53.13
High
70.00
Current: 25.860
Low
38.00
Averages
53.13
High
70.00
About FIG
Figma, Inc. designs and develops platforms for people who build digital products together. The Company helps cross-functional teams align and build software more efficiently and ensure the advanced access and controls that large organizations require. Its products include Figma Design, Dev Mode, Figma Sites, Figma Make, Figma Draw, Figma Buzz, FigJam and Figma Slides. Figma Sites is a product that lets clients design a Website and directly publish it to the Web, with a custom URL. Figma Make is an AI-powered tool that turns a prompt into a fully functional prototype. Figma Buzz is a product for easily creating marketing assets (like social media assets and digital ads) at a scale that is consistent with brand or visual identity. Figma Draw provides a space for finer vector editing required when drawing detailed iconography and product illustrations. Figma Design combines powerful features with a collaborative workspace to help teams design and build better products together.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Figma Reports Strong Q4 Growth with AI Tools Impact
- Significant Revenue Growth: Figma's Q4 revenue surged 40% year-over-year, surpassing market expectations, which highlights strong demand for its new products and AI tools, thereby enhancing its competitive position in the market.
- Stable Margins: Non-GAAP gross margins stood at 86.2% and non-GAAP operating margins at 14.5%, with management attributing gross margin stability to infrastructure optimization that reduced cost per user, despite elevated investment expenditures.
- Robust User Growth: Weekly active users of Figma Make grew over 70%, with more than 50% of customers spending over $100k annually, indicating widespread acceptance and usage frequency of its products, which further drives revenue growth.
- AI Tool Expansion: Management noted that approximately 75% of paid customers are consuming AI credits weekly, and the acquisition of Figma Weave will enhance its AI-native capabilities, expected to drive future product innovation and market share increase.
See More
FIGMA STOCK FALLS 1.1% FOLLOWING Q4 RESULTS
- Company Performance: Figma's shares have decreased by 1.1% following the release of its Q4 results.
- Market Reaction: The decline in share value indicates a potential negative market reaction to the company's financial performance.
- Investor Sentiment: Investors may be reassessing their confidence in Figma based on the latest earnings report.
- Future Outlook: The results could impact Figma's future growth prospects and investor strategies moving forward.
See More
Supreme Court Complicates Tariff Issues; AI and Private Credit Continue to Keep Markets Uneasy.
Market Concerns: The market faces significant challenges beyond tariff adjustments, particularly related to AI advancements and private credit issues.
Tariff Break Impact: A temporary relief from tariffs may not be sufficient to alleviate broader market anxieties.
See More
ARK Invest Increases Figma Stake and Reduces DraftKings Holdings
- Portfolio Reshuffle: On February 19, ARK Invest added approximately $24 million in Figma shares following the company's fourth-quarter fiscal 2025 results, indicating strong confidence in Figma's growth potential.
- Strong Earnings Report: Figma reported earnings per share of $0.08 and revenue of $303.8 million, both exceeding market expectations, leading to a stock price increase of over 6% post-earnings, reflecting investor optimism about future performance.
- Positive Future Guidance: The company guided fiscal 2026 revenue between $1.366 billion and $1.374 billion, surpassing market forecasts, with management asserting that demand for software remains robust despite ongoing debates around generative AI, indicating sustained market interest.
- AI Tool Innovation: Figma plans to introduce usage-based pricing and monthly AI credit limits starting in March, leveraging AI models from Alphabet to convert text prompts into app prototypes, thereby enhancing its product competitiveness and market appeal.
See More
ARK Invest Makes Major Purchase of Figma Shares
- Trade Overview: On Thursday, ARK Invest executed significant trades, notably acquiring 964,342 shares of Figma Inc (NYSE:FIG), indicating strong confidence in the company amidst the current market environment.
- ETF Purchase Details: The ARK Innovation ETF (BATS:ARKK) and ARK Next Generation Internet ETF (BATS:ARKW) purchased 823,965 shares and 140,377 shares of Figma, respectively, reflecting optimism about Figma's future growth potential.
- Valuation Analysis: At a closing price of $25.86 per share, this acquisition is valued at approximately $24.93 million, showcasing ARK Invest's ongoing investment strategy in the tech sector.
- Market Sentiment: According to Benzinga Edge stock rankings, Figma's stock momentum is in the 6th percentile, indicating a cautious market sentiment that may influence investor decisions.
See More
Concerns Over Software and Services Stocks Linked to AI Might Be Exaggerated
Software and Services Stocks Resilience: Contrary to expectations, software and services stocks are not facing demise due to the rise of artificial intelligence.
AI's Impact on the Market: The introduction of AI technologies has not negatively impacted the performance of these stocks as previously feared.
See More
Figma Reports Strong Q4 Growth with AI Tools Impact
- Significant Revenue Growth: Figma's Q4 revenue surged 40% year-over-year, surpassing market expectations, which highlights strong demand for its new products and AI tools, thereby enhancing its competitive position in the market.
- Stable Margins: Non-GAAP gross margins stood at 86.2% and non-GAAP operating margins at 14.5%, with management attributing gross margin stability to infrastructure optimization that reduced cost per user, despite elevated investment expenditures.
- Robust User Growth: Weekly active users of Figma Make grew over 70%, with more than 50% of customers spending over $100k annually, indicating widespread acceptance and usage frequency of its products, which further drives revenue growth.
- AI Tool Expansion: Management noted that approximately 75% of paid customers are consuming AI credits weekly, and the acquisition of Figma Weave will enhance its AI-native capabilities, expected to drive future product innovation and market share increase.
See More
FIGMA STOCK FALLS 1.1% FOLLOWING Q4 RESULTS
- Company Performance: Figma's shares have decreased by 1.1% following the release of its Q4 results.
- Market Reaction: The decline in share value indicates a potential negative market reaction to the company's financial performance.
- Investor Sentiment: Investors may be reassessing their confidence in Figma based on the latest earnings report.
- Future Outlook: The results could impact Figma's future growth prospects and investor strategies moving forward.
See More
Supreme Court Complicates Tariff Issues; AI and Private Credit Continue to Keep Markets Uneasy.
Market Concerns: The market faces significant challenges beyond tariff adjustments, particularly related to AI advancements and private credit issues.
Tariff Break Impact: A temporary relief from tariffs may not be sufficient to alleviate broader market anxieties.
See More
ARK Invest Increases Figma Stake and Reduces DraftKings Holdings
- Portfolio Reshuffle: On February 19, ARK Invest added approximately $24 million in Figma shares following the company's fourth-quarter fiscal 2025 results, indicating strong confidence in Figma's growth potential.
- Strong Earnings Report: Figma reported earnings per share of $0.08 and revenue of $303.8 million, both exceeding market expectations, leading to a stock price increase of over 6% post-earnings, reflecting investor optimism about future performance.
- Positive Future Guidance: The company guided fiscal 2026 revenue between $1.366 billion and $1.374 billion, surpassing market forecasts, with management asserting that demand for software remains robust despite ongoing debates around generative AI, indicating sustained market interest.
- AI Tool Innovation: Figma plans to introduce usage-based pricing and monthly AI credit limits starting in March, leveraging AI models from Alphabet to convert text prompts into app prototypes, thereby enhancing its product competitiveness and market appeal.
See More
ARK Invest Makes Major Purchase of Figma Shares
- Trade Overview: On Thursday, ARK Invest executed significant trades, notably acquiring 964,342 shares of Figma Inc (NYSE:FIG), indicating strong confidence in the company amidst the current market environment.
- ETF Purchase Details: The ARK Innovation ETF (BATS:ARKK) and ARK Next Generation Internet ETF (BATS:ARKW) purchased 823,965 shares and 140,377 shares of Figma, respectively, reflecting optimism about Figma's future growth potential.
- Valuation Analysis: At a closing price of $25.86 per share, this acquisition is valued at approximately $24.93 million, showcasing ARK Invest's ongoing investment strategy in the tech sector.
- Market Sentiment: According to Benzinga Edge stock rankings, Figma's stock momentum is in the 6th percentile, indicating a cautious market sentiment that may influence investor decisions.
See More
Concerns Over Software and Services Stocks Linked to AI Might Be Exaggerated
Software and Services Stocks Resilience: Contrary to expectations, software and services stocks are not facing demise due to the rise of artificial intelligence.
AI's Impact on the Market: The introduction of AI technologies has not negatively impacted the performance of these stocks as previously feared.
See More
