Adobe Stock vs Figma Stock: Valuation Clash at $353 vs $53

Adobe (NASDAQ:ADBE) vs Figma (NYSE:FIG): Diverging Paths in the Design Software Market

The competitive tension between Adobe Inc. (NASDAQ:ADBE), trading near $353, and Figma Inc. (NYSE:FIG), changing hands at $53, has intensified as the two companies move through very different phases of growth, valuation, and market perception. Investors are weighing Adobe’s deep-rooted ecosystem and discounted multiple against Figma’s hyper-growth trajectory tempered by steep valuation and post-IPO volatility.

Revenue Growth and Market Momentum

Adobe reported trailing twelve-month revenue of $22.6 billion, expanding at a modest 10.6% year over year in the last quarter. Its Q3 guidance targets $5.875–$5.925 billion, implying around 9% growth. By contrast, Figma is still in hypergrowth mode, with Q2 revenue at $249.6 million, up 41% year over year, and full-year projections pointing to about $1.02 billion. Yet, guidance for Q3 signals deceleration to 33%, highlighting that even for a young IPO, sustaining near-50% growth is proving difficult. Despite slower momentum, Adobe’s sheer scale dwarfs Figma’s, generating in one quarter nearly six times Figma’s annualized run rate.

Profitability and Margins

Adobe operates with enviable profitability: a 30.4% net margin, operating margins approaching 36%, and free cash flow margins around 37%. It generated $8.3 billion in levered free cash flow over the past year, funding aggressive share buybacks. Figma, on the other hand, posted a modest GAAP profit of $2.1 million in Q2, translating to an 0.8% operating margin, while non-GAAP operating margin held at 5%. While profitability is improving, especially versus losses in 2023, stock-based compensation remains a drag, and consistent positive GAAP earnings are not yet guaranteed.

Valuation Gap and Investor Sentiment

Adobe trades at 15× forward earnings and 6.6× EV/revenue, a steep discount from its five-year historical multiples when EV/revenue often exceeded 10×. Its market cap of ~$150 billion represents a secular compounder priced like a maturing cyclical. Figma’s $26 billion market cap equates to nearly 30× sales and a forward P/E ratio above 280. That multiple remains difficult to defend as growth slows to the low-30% range. From its IPO peak above $140 per share, FIG has corrected over 60%, reflecting this recalibration, yet valuations remain nosebleed by traditional standards.

Competitive Landscape and AI Integration

Adobe is embedding Firefly and GenStudio directly into Creative Cloud, Acrobat, and its Experience Cloud, with AI-influenced revenue already contributing billions. Management highlighted that direct AI revenue is tracking ahead of its $250 million fiscal 2025 target. Figma, meanwhile, is pushing new offerings such as Figma Draw, Make, Sites, and Buzz, with adoption rates showing more than 80% of customers now use two or more products. While these launches bolster stickiness, the financial impact is unlikely before 2026. Both firms are leveraging AI, but Adobe’s integration into its 20 million-plus user base and entrenched enterprise contracts create a scale advantage that Figma cannot match in the near term.

Stock Performance and Technical Setups

Year to date, Adobe has dropped more than 20%, hit by fears of AI disruption and negative sentiment around pricing hikes. Its stock sits 40% below its 2021 highs but trades at compressed multiples that offer asymmetric upside if earnings deliver. Figma, despite a sharp post-IPO correction, is still up more than 37% YTD due to its July IPO surge. Its technical setup, however, is fragile, with shares hovering just above the $50 floor, dangerously close to IPO levels of $33. Any earnings miss could break that support, exposing downside risk toward pre-IPO valuations.

Balance Sheets and Cash Reserves

Adobe carries $5.7 billion in cash against $6.6 billion in debt, with net debt negligible relative to its $9.6 billion annual operating cash flow. The balance sheet remains a fortress. Figma holds $1.6 billion in cash and just $65 million in debt, a clean structure aided by IPO proceeds. The issue for FIG is not solvency but valuation: even with a pristine balance sheet, investors demand profitability and sustainable growth to justify premium multiples.

Insider and Institutional Activity

Adobe insiders have recently sold ~$17 million worth of stock, a cautious signal ahead of Q3 results. Full transaction history is tracked here. For Figma, insider holdings are high, with 50.5% of shares controlled by insiders and lock-up expirations looming, creating potential supply overhang. Institutional investors hold roughly 50% of outstanding shares, while short interest remains minimal at under 1%. Transaction details for FIG can be reviewed here.

Investment Verdict

Comparing Adobe (NASDAQ:ADBE) and Figma (NYSE:FIG) highlights two companies at opposite ends of the maturity spectrum. Adobe is a cash-rich, high-margin incumbent trading at just 15× forward earnings and below-market P/FCF multiples, making it a compelling Buy for long-term investors willing to weather near-term AI disruption fears. Figma, despite its stellar product adoption and cultural relevance, still trades at nearly 30× revenue with slowing growth and thin margins. Until valuations compress further or new product lines materially shift earnings power, FIG remains a speculative Sell/Hold rather than a core holding. For now, Adobe offers investors discounted quality, while Figma demands patience and high risk tolerance.

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