Figma's Stock Decline Presents Long-Term Opportunities

Written by Emily J. Thompson, Senior Investment Analyst

FIG+0.83%

Source: Fool

Updated: 1h ago

0mins

Source: Fool

Revenue Growth Potential: Figma's trailing twelve-month revenue is nearing $1 billion, with expectations to rise to nearly $1.3 billion this year and over $1.5 billion next year, indicating strong market demand and growth potential.
High User Retention: The company boasts a revenue retention rate of 131%, suggesting that users continue to increase their spending over time, reflecting high product stickiness and customer satisfaction.
Attractive Valuation: Despite the stock's decline, Figma's price-to-sales ratio has slipped to 14, making it an appealing investment given the potential for 50% revenue growth over the next two years.
Market Sentiment Shift: While AI technology has spooked investors away from software stocks, Figma's ongoing growth and potential shifts in market sentiment could lead to a rebound in its stock price, offering significant returns for investors.

FIG

$29.17+Infinity%1D

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: 28.930

Low

38.00

Averages

53.13

High

70.00

Current: 28.930

Low

38.00

Averages

53.13

High

70.00

Wells Fargo

Equal Weight -> Overweight

upgrade

$52

2026-01-08

Reason

Wells Fargo

Price Target

$52

AI Analysis

2026-01-08

upgrade

Equal Weight -> Overweight

Reason

Wells Fargo upgraded Figma to Overweight from Equal Weight with a $52 price target.

Wells Fargo

Michael Turrin

Equal Weight -> Overweight

upgrade

$52

2026-01-08

Reason

Wells Fargo

Michael Turrin

Price Target

$52

2026-01-08

upgrade

Equal Weight -> Overweight

Reason

As previously reported, Wells Fargo analyst Michael Turrin upgraded Figma to Overweight from Equal Weight with a $52 price target. The firm notes shares have fallen over 70% from prior post IPO peaks as investors continue to evaluate where the company fits in the bigger GenAI vs. app software discussion. Wells sees the company deserving of a premium given its de facto status within product design, track record of delivering efficient growth, innovative product set capable of driving continued customer expansion and increasing signs of evidence in Figma's ability to deliver tangible GenAI-enabled value in 2026 via Make.

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Stifel

Hold

initiated

$40

2026-01-07

Reason

Stifel

Price Target

$40

2026-01-07

initiated

Hold

Reason

Stifel initiated coverage of Figma with a Hold rating and $40 price target. Figma is poised to build on its category leadership in design and the firm sees "an appealing opportunity" for share gains through a combination of net new customer acquisition, expansion through new products and recently taken pricing and packaging actions. However, despite its positive view on the company's competitive positioning and addressable opportunity, the firm would await a more favorable risk/reward setup at the current valuation, the analyst tells investors.

RBC Capital

Rishi Jaluria

Sector Perform

downgrade

$65 -> $38

2026-01-05

Reason

RBC Capital

Rishi Jaluria

Price Target

$65 -> $38

2026-01-05

downgrade

Sector Perform

Reason

RBC Capital analyst Rishi Jaluria lowered the firm's price target on Figma to $38 from $65 and keeps a Sector Perform rating on the shares. 2026 is likely to be a year when AI tailwinds become more evident for companies well positioned for enterprise AI adoption, while less prepared peers may remain pressured by the "AI is the death of software" narrative, the analyst tells investors in a research note. Enterprise spending appears to be stabilizing and improving in select areas, with GenAI driving innovation even as management teams remain conservative in early 2026 guidance, the firm says.

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.