Figma Stock (NYSE:FIG) Falls Sharply From IPO Highs as Growth Cools

NYSE:FIG Stock Slides After Post-IPO Euphoria as Growth Slows and Valuation Pressures Build

NYSE:FIG has been one of the most talked-about IPOs of 2025. After pricing at $33 per share, the stock exploded to highs above $140 within days, giving Figma a market capitalization of nearly $70 billion. That rally proved unsustainable. Shares have since collapsed back toward $53.29, a level that still leaves the company valued at more than 29x trailing sales. Market cap now sits near $26 billion, roughly in line with Adobe’s failed $20 billion acquisition offer in 2022. The sharp reversal underlines the challenge of sustaining momentum when early hype collides with financial reality.

Revenue Expansion Meets Decelerating Growth for NYSE:FIG

Figma’s Q2 results marked its first earnings as a public company, with $249.6 million in revenue, up 41% year over year and slightly below the high end of guidance ($247–$250 million). Non-GAAP operating margin came in at 5%, in line with expectations but hardly enough to support a premium multiple. While the company delivered a small GAAP operating profit of $2.1 million, down sharply from Q1’s $40 million, volatility in margins raised questions about sustainable profitability. Guidance for Q3 pointed to $263–$264 million in revenue, a sequential increase of just $14 million and annual growth of 33%, down from the 41% pace in Q2. For the full year 2025, management guided to $1.02 billion in revenue and $93 million in non-GAAP operating income, suggesting modest profitability but slowing momentum.

User Metrics and Product Adoption Trends in NYSE:FIG

The company still boasts enviable customer loyalty, with a net retention rate of 129% in Q2. More than 80% of customers use at least two products, and nearly two-thirds adopt three or more, reflecting strong ecosystem stickiness. New product rollouts such as Figma Draw, Figma Make, Figma Sites, and Figma Buzz are expanding the platform’s scope, but these features are still in beta and have yet to meaningfully impact revenue. The company counts more than 13 million active users, a mix of professional designers and broader product teams. The pitch remains consistent: eliminate silos between design, developers, and marketers. While the mission resonates, near-term financial contribution from new tools is limited, keeping Wall Street focused on deceleration in core design revenues.

Valuation Headwinds Define the NYSE:FIG Narrative

At ~30x trailing sales and 28.7x enterprise value to revenue, the valuation remains stretched. The forward P/E multiple, based on a consensus EPS forecast of just $0.30 for FY2025, sits near 285x. Price-to-book is at 24.5x, while enterprise value to EBITDA is a staggering 467x. These multiples might be palatable for a business growing 60–70% annually, but with growth slipping into the low-30% range, the disconnect is severe. The stock’s round trip from $140 to the mid-$50s reflects the market repricing toward more sustainable levels, but even after the correction, FIG trades at valuations typically reserved for companies with higher growth and more durable profits.

Balance Sheet Strength and Insider Dynamics of NYSE:FIG

Figma maintains a solid cash position, with $1.59 billion in cash and only $64.7 million in debt, equating to a debt-to-equity ratio of just 4.5%. Current ratio at 3.31 shows strong liquidity. However, stock-based compensation remains a major overhang, inflating share count and raising concerns about dilution. Insider transactions have not yet shown aggressive selling, but insider ownership remains high at 50.52%, alongside 50.16% institutional ownership. Short interest is modest at 2.49% of float, signaling limited pressure from hedge funds betting against the stock, though the lock-up expiration could introduce volatility as early backers gain the ability to sell.

Analyst Forecasts and Institutional Views on NYSE:FIG

Wall Street remains split. The average price target is $71.12, implying nearly 34% upside from current levels, with high estimates stretching to $96. Nine analysts covering the September quarter expect EPS around $0.05 and revenue near $264 million, modestly above guidance. For FY2026, estimates rise to $1.26 billion in revenue and EPS of $0.21, but that implies just 23% annual growth, a steep slowdown from the company’s pre-IPO trajectory. Morgan Stanley, RBC, and Wells Fargo have all reiterated neutral stances, while Piper Sandler initiated with an Overweight rating. Institutional interest remains strong, with high-profile funds like Ark Invest adding on the dip, but many analysts caution that valuation leaves little margin of safety.

Competitive Pressures and AI-Driven Shifts in NYSE:FIG

Figma continues to face structural competition from Adobe (NASDAQ:ADBE), Canva, and an emerging wave of AI-native design platforms. While Adobe’s failed $20 billion acquisition underscores the strategic value of FIG, it also highlights regulatory barriers to consolidation. The rise of generative AI has mixed implications: on one hand, it expands demand for intuitive design tools; on the other, it lowers the barrier to entry for rivals who can leverage AI to replicate features more cheaply. Figma has attempted to respond with AI-powered workflows and Dev Mode to bridge designers and developers, but execution risk remains high.

Market Performance of NYSE:FIG Since IPO

Since debuting in late July, NYSE:FIG has been a rollercoaster. The stock soared more than 300% in days, then lost over 60% from its peak, now trading just a few dollars above its 52-week low of $50.49. The volatility reflects both investor enthusiasm and rapid disappointment as earnings failed to surpass elevated expectations. With average daily volume above 15 million shares, liquidity is not an issue, but volatility will remain elevated given FIG’s beta and speculative nature.

Verdict on NYSE:FIG Stock

At $53, Figma remains one of the most hotly debated software IPOs of the decade. Revenue growth above 30% and profitability milestones support a bullish case, but stretched multiples, deceleration, and competition from Adobe and AI-native upstarts weigh heavily. With fair value anchored closer to the mid-$40s based on current fundamentals, the stock remains richly priced despite a 60% decline from its highs. Until growth reaccelerates or margins expand materially, FIG is best viewed as a Hold, with speculative upside if AI adoption drives stronger-than-expected top-line acceleration.

That's TradingNEWS