Figma’s equity presents a classic investment dilemma. The design software firm continues to post robust operational growth, fueled aggressively by artificial intelligence, yet its substantial valuation premium leaves the shares exposed to shifting market sentiment. Despite impressive user metrics and customer loyalty, the stock has suffered significant depreciation in recent months. The central question for investors is whether the company’s financial performance can ultimately validate its expensive price tag over the long term.
Valuation Concerns Overshadow Strong Fundamentals
The primary focus for analysts remains Figma’s rich valuation. The stock currently trades at a forward price-to-sales (P/S) multiple of 11.45 for the next twelve months. This represents a significant premium compared to the internet software sector average of 4.81. This elevated valuation level has increased the stock’s sensitivity to broader market mood swings. Over the past three months, the share price has declined by approximately 36%, a much steeper drop than the 13.4% fall in the relevant industry index. The current price sits more than 70% below its 52-week high, reflecting a market environment currently showing little patience for high-priced growth assets.
AI-Driven Expansion Fuels Operational Metrics
Operationally, Figma’s strategy is clearly delivering results. The company has made a concerted push into artificial intelligence, expanding its product suite with AI-powered features for image generation, editing, and ChatGPT integration. This focus is paying dividends in key performance indicators.
Should investors sell immediately? Or is it worth buying Figma?
For the third quarter of 2025, Figma reported a Net Dollar Retention Rate of 131% among customers generating over $10,000 in annual revenue—a strong signal that existing clients are spending more within its ecosystem. The total count of paying customers climbed to 540,000, a figure bolstered by the addition of more than 90,000 new teams in just two quarters. Notably, about 30% of enterprise clients (those with over $100,000 in annual spend) were using the “Figma Make” AI solution on a weekly basis.
Future Performance Holds the Key
All eyes are now on whether upcoming results can support the growth narrative embedded in the stock’s price. Market experts have also noted insider transaction activity, including the sale of over 3 million shares worth more than $112 million by an insider in mid-November. Such planned sales are frequently interpreted as indicators of personal liquidity needs.
Despite these factors, analyst projections remain optimistic. The consensus estimate for Figma’s 2025 earnings per share stands at 41 cents, which would equate to growth exceeding 110% compared to 2024. The average analyst rating for the stock is currently a “Hold.” Sustaining the high valuation premium will require the company to consistently meet elevated growth expectations in forthcoming quarterly reports, with its AI-driven expansion continuing to serve as the central catalyst.
Ad
Figma Stock: Buy or Sell?! New Figma Analysis from January 31 delivers the answer:
The latest Figma figures speak for themselves: Urgent action needed for Figma investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from January 31.
Figma: Buy or sell? Read more here...
