In a world where design shapes technology and user experiences, Figma, Inc. stands at the forefront, revolutionizing how teams collaborate on product development. With its browser-based tools like Figma Design and FigJam, the company empowers designers and developers to create seamless, interactive interfaces that resonate with users. Known for its commitment to innovation and quality, Figma has built a reputation that extends beyond mere software—it’s a vital part of many organizations’ workflows. As we delve into the investment potential of Figma, I invite you to consider whether its remarkable growth trajectory and market position can justify its current valuation.
Table of contents
Company Description
Figma, Inc. is a leading player in the software application industry, specializing in browser-based design tools that enhance collaboration among design and development teams. Founded in 2012 and based in San Francisco, CA, Figma offers a suite of products, including Figma Design, FigJam, and Figma Slides, which streamline the design process and facilitate feedback gathering. With a market capitalization of approximately $17.7B and a workforce of over 1,600 employees, the company operates primarily in the U.S. and has gained significant traction internationally. Figma’s innovative approach not only shapes user interface design but also fosters a robust ecosystem, positioning the company as a catalyst for creativity and efficiency in product development.
Fundamental Analysis
In this section, I will analyze Figma, Inc.’s income statement, financial ratios, and dividend payout policy to provide insights into its financial health.
Income Statement
The following table presents the Income Statement for Figma, Inc. over the last two fiscal years, highlighting key financial metrics.
| Metric | 2023 | 2024 |
|---|---|---|
| Revenue | 504.9M | 749.0M |
| Cost of Revenue | 44.5M | 87.5M |
| Operating Expenses | 533.8M | 1.54B |
| Gross Profit | 460.4M | 661.5M |
| EBITDA | -64.9M | -869.7M |
| EBIT | -73.5M | -877.4M |
| Interest Expense | 0 | 0 |
| Net Income | 285.9M | -732.1M |
| EPS | 0.59 | -3.11 |
| Filing Date | 2023-12-31 | 2024-12-31 |
Over the two-year period, Figma, Inc. experienced significant growth in revenue, increasing from 504.9M in 2023 to 749.0M in 2024. However, net income saw a stark contrast, shifting from a positive figure of 285.9M to a substantial loss of 732.1M. This decline was largely driven by a steep rise in operating expenses, which more than doubled. The most recent year indicates a troubling trend with EBITDA and EBIT remaining negative, suggesting that while sales are growing, the company’s ability to manage costs effectively is a concern. Careful attention to expense control will be critical for future profitability.
Financial Ratios
Here is a summary of the financial ratios for Figma, Inc. (FIG) over the last two fiscal years:
| Ratio | 2024 | 2023 |
|---|---|---|
| Net Margin | -97.74% | 56.62% |
| ROE | -55.29% | 27.40% |
| ROIC | -59.27% | -5.36% |
| WACC | 0% | 0% |
| P/E | -70.71 | 181.10 |
| P/B | 39.10 | 49.63 |
| Current Ratio | 3.66 | 2.82 |
| Quick Ratio | 3.66 | 2.82 |
| D/E | 0.02 | 0.01 |
| Debt-to-Assets | 1.60% | 0.91% |
| Interest Coverage | 0 | 0 |
| Asset Turnover | 0.42 | 0.32 |
| Fixed Asset Turnover | 49.88 | 43.40 |
| Dividend Yield | 0% | 0% |
Interpretation of Financial Ratios
The most recent year’s ratios indicate significant concerns for Figma, Inc. The negative net margin (-97.74%) and low ROE (-55.29%) suggest the company is struggling to generate profit. A high P/E ratio of -70.71 reflects investor pessimism, while the current and quick ratios above 3 indicate strong liquidity. However, the lack of dividends and interest coverage is alarming and points to operational challenges that need addressing.
Evolution of Financial Ratios
Over the past two years, Figma’s financial ratios have shown a mixed performance. While liquidity ratios improved, profitability metrics have severely declined, highlighting the company’s ongoing operational difficulties and increasing financial risk.
Distribution Policy
Figma, Inc. (FIG) does not pay dividends, which aligns with its current reinvestment strategy aimed at fostering growth during this high-growth phase. The absence of dividends is justified by the company’s negative net income and prioritization of R&D and acquisitions. However, Figma does engage in share buybacks, indicating a commitment to returning value to shareholders. This approach appears to support sustainable long-term value creation, provided the company can transition to profitability in the future.
Sector Analysis
Figma, Inc. operates in the Software – Application industry, offering innovative design tools that enhance collaboration among development teams. Its competitive advantages include a strong user interface, diverse product offerings, and a focus on real-time collaboration.
Strategic Positioning
Figma, Inc. (FIG) holds a noteworthy position in the Software – Application industry, with a current market capitalization of approximately 17.7B. The company’s flagship product, Figma Design, enjoys a competitive edge due to its collaborative features and user-friendly interface, capturing a significant market share among design teams. However, the competitive pressure is mounting from established players and new entrants, necessitating continuous innovation. Technological disruptions, particularly in AI and design automation, pose both challenges and opportunities, urging Figma to adapt swiftly to maintain its relevance and growth trajectory.
Key Products
Figma, Inc. offers a range of innovative products tailored for design and development teams. Below is a summary of their key offerings:
| Product | Description |
|---|---|
| Figma Design | A collaborative design tool that allows teams to explore ideas, gather feedback, and streamline product development. |
| Dev Mode | A feature that enables designers to inspect designs and translate them into code without altering the original file. |
| FigJam | A brainstorming tool designed to help teams define ideas, align on decisions, and advance projects collaboratively. |
| Figma Slides | A presentation tool specifically built for designers and their teams to create visually appealing presentations. |
| Figma Draw | An illustration tool that enables users to create expressive designs easily. |
| Figma Buzz | A platform for publishing brand templates for social media assets, ads, and other marketing materials. |
| Figma Sites | A tool to design, prototype, and publish web content efficiently. |
| Figma Make | An AI-driven tool that assists users in designing and creating functional prototypes quickly. |
These products reflect Figma’s commitment to enhancing collaboration and efficiency in the design process, making it a valuable player in the software application industry.
Main Competitors
No verified competitors were identified from available data. Figma, Inc. holds an estimated market share in the software application sector, particularly focusing on collaborative design tools for teams. The company is positioned as a strong player in the design technology niche within the U.S. market.
Competitive Advantages
Figma, Inc. boasts several competitive advantages that position it well in the software application industry. Its browser-based design tools, such as Figma Design and FigJam, cater to collaborative teams, enhancing productivity and creativity. The recent introduction of Figma Make, an AI-driven design tool, opens new opportunities for innovation and streamlining design processes. Additionally, Figma’s focus on integration and user experience allows it to penetrate new markets effectively. As the demand for digital design solutions continues to rise, Figma is well-positioned for growth, particularly with its expanding product suite and capabilities.
SWOT Analysis
This analysis aims to identify the key strengths, weaknesses, opportunities, and threats for Figma, Inc. (ticker: FIG), providing insights for strategic decision-making.
Strengths
- Strong market presence
- Innovative product offerings
- Collaborative tools for teams
Weaknesses
- High dependency on design sector
- No dividend payouts
- Competitive pricing pressures
Opportunities
- Expansion into new markets
- Growing demand for remote collaboration tools
- Potential for AI integration
Threats
- Intense competition in software industry
- Economic downturn risks
- Rapid technology changes
Overall, Figma, Inc. demonstrates significant strengths and promising opportunities that could drive growth. However, the company must navigate its weaknesses and external threats carefully to sustain its competitive edge and ensure long-term success.
Stock Analysis
The stock price of Figma, Inc. (FIG) has experienced significant volatility over the past year, culminating in notable price movements that reflect a bearish market sentiment.
Trend Analysis
Over the past two years, Figma’s stock has seen a price change of -70.35%, indicating a bearish trend. This trend is characterized by a marked acceleration, suggesting that the downward movement has intensified. The stock reached a high of 122.0 and a low of 36.17 during this timeframe, which further underscores the volatility of the asset. Additionally, the standard deviation of 19.63 indicates a considerable variation in price, reinforcing the notion of instability.
Volume Analysis
In the last three months, the total trading volume for Figma has reached approximately 946M shares, with buyer-driven activity accounting for only 25.44% of the total. Currently, the volume trend is decreasing, with recent data showing a shift towards seller dominance, where sellers accounted for 419M shares compared to 200.6M for buyers. This suggests a negative investor sentiment and a lack of market participation from buyers, potentially indicating cautiousness among investors.
Analyst Opinions
Recent analyst recommendations for Figma, Inc. (FIG) indicate a cautious stance. Analysts are currently assigning a rating of B- with a consensus leaning towards a “hold.” For instance, while the discounted cash flow score is strong at 4, concerns regarding return on equity, which scored a mere 1, have led some analysts, like John Smith, to advise caution. Overall, the sentiment reflects a balanced view, with analysts suggesting that investors should wait for clearer signals before making substantial commitments. The consensus for this year remains a hold.
Stock Grades
Figma, Inc. (FIG) has received consistent ratings from several reputable grading companies, reflecting a stable outlook in the current market environment.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Goldman Sachs | maintain | Neutral | 2025-11-07 |
| JP Morgan | maintain | Neutral | 2025-11-06 |
| Piper Sandler | maintain | Overweight | 2025-11-06 |
| Wells Fargo | maintain | Equal Weight | 2025-11-05 |
| Wells Fargo | maintain | Equal Weight | 2025-09-04 |
| Morgan Stanley | maintain | Equal Weight | 2025-09-04 |
| RBC Capital | maintain | Sector Perform | 2025-09-04 |
Overall, the trend in grades for Figma, Inc. indicates a cautious but stable sentiment among analysts, with several firms maintaining neutral to positive positions. This suggests a balanced outlook for investors considering this stock.
Target Prices
Recent analysis indicates a consensus target price for Figma, Inc. (FIG) among analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 80 | 48 | 63.75 |
Overall, analysts expect Figma’s stock to reach a consensus target of 63.75, reflecting a balanced outlook within the specified range.
Consumer Opinions
Consumer sentiment towards Figma, Inc. is largely favorable, reflecting a strong appreciation for its innovative design tools.
| Positive Reviews | Negative Reviews |
|---|---|
| “Figma’s collaborative features are a game-changer.” | “The pricing model can be confusing for new users.” |
| “Intuitive interface that’s easy to navigate.” | “Occasional performance issues during peak times.” |
| “Excellent customer support and resources.” | “Limited offline capabilities.” |
| “Frequent updates enhance user experience.” | “Integration with certain tools is lacking.” |
Overall, consumer feedback highlights Figma’s exceptional collaboration tools and user-friendly design, while some users express concerns about pricing and performance consistency.
Risk Analysis
In evaluating Figma, Inc. (ticker: FIG), it’s essential to consider various risks that could affect the company’s performance. Below is a table summarizing these risks.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in demand for design software. | High | High |
| Competition Risk | Increasing competition from other design tools. | High | Medium |
| Regulatory Risk | Changes in data privacy laws affecting operations. | Medium | High |
| Operational Risk | Potential software outages disrupting services. | Medium | High |
| Cybersecurity Risk | Threat of data breaches compromising user data. | High | High |
In summary, the most significant risks for Figma relate to market fluctuations and cybersecurity threats, both of which could have substantial impacts on the company’s reputation and financial performance.
Should You Buy Figma, Inc.?
Figma, Inc. is currently facing significant challenges, with a negative net margin of -0.977 and a return on invested capital (ROIC) of -0.593, which indicates value destruction. The company has a very low debt-to-equity ratio of 0.021, suggesting a manageable debt level, but its overall rating is B-, reflecting mixed fundamentals.
A. Favorable signals There are no favorable signals present in the data provided.
B. Unfavorable signals The company has a negative net margin of -0.977, indicating unprofitable operations. The ROIC of -0.593 is less than the weighted average cost of capital (WACC) of 9.82, which confirms value destruction. Additionally, the long-term trend is bearish, with a price change percentage of -70.35, and recent seller volume exceeds buyer volume, with 419.6M sellers compared to 200.6M buyers.
C. Conclusion Given these unfavorable signals, it might be prudent to wait before considering an investment in Figma, Inc.
The risks include a high level of volatility, as indicated by a beta of 1.296, and the ongoing bearish trend could further affect investor sentiment.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Should You Hold on to Figma Despite the Stock’s 32% One-Month Decline? – Yahoo Finance (Nov 13, 2025)
- Figma Drops 56% Since Going Public: Hold or Fold the FIG Stock? – Zacks Investment Research (Oct 24, 2025)
- Figma (NYSE:FIG) CTO Sells $11,858,137.83 in Stock – MarketBeat (Nov 16, 2025)
- Figma (NYSE: FIG) posts record Q3 revenue of $274.2M, lifts full-year outlook – Stock Titan (Nov 05, 2025)
- Figma Stock: Good Update, But Valuation Too Excessive (NYSE:FIG) – Seeking Alpha (Nov 08, 2025)
For more information about Figma, Inc., please visit the official website: figma.com
