Figma Shares Rebound Amid Software Sector Recovery
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy FIG?
Source: Fool
- Stock Rebound: Figma shares rose by 13.1%, recovering from a severe sell-off in the software sector, indicating market confidence in the company's future despite a previous drop of over 85%.
- Market Response: JPMorgan noted that the decline in software stocks presents an investment opportunity rather than a warning, encouraging investors to buy high-quality software stocks, which has led to Figma's stock rising for the third consecutive day, reflecting optimism in the software industry.
- Earnings Expectations: Figma is set to report its fourth-quarter earnings on February 18, with analysts expecting revenue of $293.2 million and adjusted earnings per share of $0.06, prompting investors to closely analyze the report for insights on AI competition's impact on future growth.
- Industry Outlook: While AI tools may pose a threat to design software, there is currently no evidence that Figma is being disrupted by new products, and the company's strong earnings performance has bolstered investor confidence, potentially attracting more capital inflows.
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Analyst Views on FIG
Wall Street analysts forecast FIG stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for FIG is 53.13 USD with a low forecast of 38.00 USD and a high forecast of 70.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
9 Analyst Rating
3 Buy
6 Hold
0 Sell
Moderate Buy
Current: 22.130
Low
38.00
Averages
53.13
High
70.00
Current: 22.130
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 Shares Surge Over 10% Ahead of Earnings Report
- Stock Price Rebound: Figma shares surged over 10% during Tuesday's trading, partially recovering year-to-date losses, reflecting market optimism ahead of its upcoming earnings report.
- Post-IPO Performance: Since the beginning of 2026, Figma's stock has plummeted approximately 40%, despite soaring from $33 to $122 during its July IPO, indicating a market reassessment of its valuation.
- Earnings Expectations: Figma is set to release its Q4 2025 financial results on February 18, with consensus estimates predicting adjusted earnings per share of $0.06 on revenue of $293.15 million, highlighting the company's revenue growth potential.
- Analyst Outlook: Analyst Bert Hochfield believes Figma is a leader in digital design, and AI-driven product launches will support sustained growth and market expansion, even as its valuation has sharply declined recently.
See More
Figma Shares Surge as Software Sector Rebounds
- Market Rebound Signal: Figma Inc (NYSE:FIG) shares surged 12.34% to $24.86 on Tuesday, indicating a potential recovery in the software sector after recent AI-driven volatility, as market sentiment improves.
- Analyst Optimism: JPMorgan's Dubravko Lakos-Bujas noted that the sharp selloff in software stocks was excessive, believing that high-quality software companies will benefit from a market rebound, especially given solid fundamentals that tilt the risk-reward balance positively.
- Strong Earnings Boost: Datadog Inc (NASDAQ:DDOG) reported strong fourth-quarter earnings of $0.59 per share, significantly exceeding expectations of $0.39, and projected fiscal 2026 earnings between $2.08 and $2.16 per share, injecting positive momentum into the software industry.
- Weak Dollar Support: Morgan Stanley analyst Katy Huberty highlighted that a weaker dollar could provide tailwinds for mega-cap tech, further supporting the software sector's recovery, indicating that the current valuation dislocation is sentiment-driven rather than fundamentally based.
See More
Figma Shares Rebound Amid Software Sector Recovery
- Stock Rebound: Figma shares rose by 13.1%, recovering from a severe sell-off in the software sector, indicating market confidence in the company's future despite a previous drop of over 85%.
- Market Response: JPMorgan noted that the decline in software stocks presents an investment opportunity rather than a warning, encouraging investors to buy high-quality software stocks, which has led to Figma's stock rising for the third consecutive day, reflecting optimism in the software industry.
- Earnings Expectations: Figma is set to report its fourth-quarter earnings on February 18, with analysts expecting revenue of $293.2 million and adjusted earnings per share of $0.06, prompting investors to closely analyze the report for insights on AI competition's impact on future growth.
- Industry Outlook: While AI tools may pose a threat to design software, there is currently no evidence that Figma is being disrupted by new products, and the company's strong earnings performance has bolstered investor confidence, potentially attracting more capital inflows.
See More
Databricks Raises $5 Billion, Valued at $134 Billion
- Innovative Funding: Databricks announced it has successfully raised $5 billion and secured $2 billion in new debt capacity, achieving a valuation of $134 billion, reflecting strong market confidence in its growth potential.
- Significant Revenue Growth: The company reported annualized revenue exceeding $5.4 billion for the January quarter, marking a 65% year-over-year increase while generating free cash flow, indicating the sustainability and profitability of its business model.
- AI Product Drive: Databricks' AI products now generate $1.4 billion in annualized revenue, accelerating the company's overall expansion with a projected 50% growth rate, further solidifying its leadership position in the data analytics sector.
- Intensifying Market Competition: With the release of its Lakehouse database, competition has intensified, particularly against rivals like Snowflake, which has a market cap of approximately $58 billion, demonstrating Databricks' efforts to expand its market share while challenging traditional software companies.
See More
Figma Stock Down 25% but Long-Term Outlook Remains Positive
- Post-IPO Performance: Figma's stock has declined over 25% from its IPO price of $33 to $22.20, reflecting investor concerns about its financial health despite the potential for long-term investors to overlook short-term fluctuations.
- Financial Condition Analysis: In the first nine months of 2025, Figma reported $752 million in revenue, a 41% increase year-over-year, but operating expenses exceeded revenue, resulting in a net loss of over $1 billion, highlighting challenges in profitability.
- Untapped Market Potential: Figma estimates its addressable market at $33 billion, with projected revenue of $1.05 billion for 2025, indicating that the company has barely tapped into its growth potential, while its forward P/S ratio of 9 suggests a reasonable stock price.
- Strong Cash Flow Position: Despite net losses being a concern, Figma generated $204 million in free cash flow in the first nine months of 2025, indicating sufficient cash to sustain operations and alleviating worries about its financial health.
See More
Analysis of Figma's 83% Stock Plunge
- Stock Plunge Reasons: Figma's stock has plummeted 83% in just six months, dropping from $142.92 on August 1 to around $24, indicating severe market concerns about its growth prospects, despite reporting $274 million in revenue for the last quarter, a 38% year-over-year increase.
- Market Overreaction: While the market appears pessimistic about Figma's future, the company has posted operating profits in two of the last three quarters, suggesting that its business is not as dire as perceived, and it is continuing to grow steadily.
- AI Impact Analysis: The rise of artificial intelligence and chatbots poses a risk to the demand for Figma's design software, leading investors to worry that its growth opportunities may diminish, even though the software also aids users in building applications.
- Investment Opportunity Assessment: Despite the current low stock price, Figma's guidance for a 35% growth rate in the fourth quarter indicates ongoing growth potential, making it a potentially undervalued investment opportunity amid market panic.
See More
Figma Shares Surge Over 10% Ahead of Earnings Report
- Stock Price Rebound: Figma shares surged over 10% during Tuesday's trading, partially recovering year-to-date losses, reflecting market optimism ahead of its upcoming earnings report.
- Post-IPO Performance: Since the beginning of 2026, Figma's stock has plummeted approximately 40%, despite soaring from $33 to $122 during its July IPO, indicating a market reassessment of its valuation.
- Earnings Expectations: Figma is set to release its Q4 2025 financial results on February 18, with consensus estimates predicting adjusted earnings per share of $0.06 on revenue of $293.15 million, highlighting the company's revenue growth potential.
- Analyst Outlook: Analyst Bert Hochfield believes Figma is a leader in digital design, and AI-driven product launches will support sustained growth and market expansion, even as its valuation has sharply declined recently.
See More
Figma Shares Surge as Software Sector Rebounds
- Market Rebound Signal: Figma Inc (NYSE:FIG) shares surged 12.34% to $24.86 on Tuesday, indicating a potential recovery in the software sector after recent AI-driven volatility, as market sentiment improves.
- Analyst Optimism: JPMorgan's Dubravko Lakos-Bujas noted that the sharp selloff in software stocks was excessive, believing that high-quality software companies will benefit from a market rebound, especially given solid fundamentals that tilt the risk-reward balance positively.
- Strong Earnings Boost: Datadog Inc (NASDAQ:DDOG) reported strong fourth-quarter earnings of $0.59 per share, significantly exceeding expectations of $0.39, and projected fiscal 2026 earnings between $2.08 and $2.16 per share, injecting positive momentum into the software industry.
- Weak Dollar Support: Morgan Stanley analyst Katy Huberty highlighted that a weaker dollar could provide tailwinds for mega-cap tech, further supporting the software sector's recovery, indicating that the current valuation dislocation is sentiment-driven rather than fundamentally based.
See More
Figma Shares Rebound Amid Software Sector Recovery
- Stock Rebound: Figma shares rose by 13.1%, recovering from a severe sell-off in the software sector, indicating market confidence in the company's future despite a previous drop of over 85%.
- Market Response: JPMorgan noted that the decline in software stocks presents an investment opportunity rather than a warning, encouraging investors to buy high-quality software stocks, which has led to Figma's stock rising for the third consecutive day, reflecting optimism in the software industry.
- Earnings Expectations: Figma is set to report its fourth-quarter earnings on February 18, with analysts expecting revenue of $293.2 million and adjusted earnings per share of $0.06, prompting investors to closely analyze the report for insights on AI competition's impact on future growth.
- Industry Outlook: While AI tools may pose a threat to design software, there is currently no evidence that Figma is being disrupted by new products, and the company's strong earnings performance has bolstered investor confidence, potentially attracting more capital inflows.
See More
Databricks Raises $5 Billion, Valued at $134 Billion
- Innovative Funding: Databricks announced it has successfully raised $5 billion and secured $2 billion in new debt capacity, achieving a valuation of $134 billion, reflecting strong market confidence in its growth potential.
- Significant Revenue Growth: The company reported annualized revenue exceeding $5.4 billion for the January quarter, marking a 65% year-over-year increase while generating free cash flow, indicating the sustainability and profitability of its business model.
- AI Product Drive: Databricks' AI products now generate $1.4 billion in annualized revenue, accelerating the company's overall expansion with a projected 50% growth rate, further solidifying its leadership position in the data analytics sector.
- Intensifying Market Competition: With the release of its Lakehouse database, competition has intensified, particularly against rivals like Snowflake, which has a market cap of approximately $58 billion, demonstrating Databricks' efforts to expand its market share while challenging traditional software companies.
See More
Figma Stock Down 25% but Long-Term Outlook Remains Positive
- Post-IPO Performance: Figma's stock has declined over 25% from its IPO price of $33 to $22.20, reflecting investor concerns about its financial health despite the potential for long-term investors to overlook short-term fluctuations.
- Financial Condition Analysis: In the first nine months of 2025, Figma reported $752 million in revenue, a 41% increase year-over-year, but operating expenses exceeded revenue, resulting in a net loss of over $1 billion, highlighting challenges in profitability.
- Untapped Market Potential: Figma estimates its addressable market at $33 billion, with projected revenue of $1.05 billion for 2025, indicating that the company has barely tapped into its growth potential, while its forward P/S ratio of 9 suggests a reasonable stock price.
- Strong Cash Flow Position: Despite net losses being a concern, Figma generated $204 million in free cash flow in the first nine months of 2025, indicating sufficient cash to sustain operations and alleviating worries about its financial health.
See More
Analysis of Figma's 83% Stock Plunge
- Stock Plunge Reasons: Figma's stock has plummeted 83% in just six months, dropping from $142.92 on August 1 to around $24, indicating severe market concerns about its growth prospects, despite reporting $274 million in revenue for the last quarter, a 38% year-over-year increase.
- Market Overreaction: While the market appears pessimistic about Figma's future, the company has posted operating profits in two of the last three quarters, suggesting that its business is not as dire as perceived, and it is continuing to grow steadily.
- AI Impact Analysis: The rise of artificial intelligence and chatbots poses a risk to the demand for Figma's design software, leading investors to worry that its growth opportunities may diminish, even though the software also aids users in building applications.
- Investment Opportunity Assessment: Despite the current low stock price, Figma's guidance for a 35% growth rate in the fourth quarter indicates ongoing growth potential, making it a potentially undervalued investment opportunity amid market panic.
See More
