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Figma Stock Attractiveness After 70% Decline

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  Published in Stocks and Investing on Monday, December 22nd 2025 at 20:42 GMT by Forbes

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Figma Stock Attractive After 70% Decline – A Deep‑Dive Analysis
Published by Great Speculations on Forbes, December 22 2025

Figma, the cloud‑based collaborative design platform that has taken the creative world by storm, has seen its share price swing dramatically since its IPO. After a steep 70‑percent drop from the highs it enjoyed in late 2024, the company’s stock is now being revisited by investors who see a compelling valuation upside. In this article we distill the key points from the Forbes piece, trace the broader context through its linked sources, and lay out why Figma could be an attractive play for long‑term investors.

1. A Brief History of Figma

• Founding and Growth – Founded in 2012 by Dylan Field and Evan Wallace, Figma moved the industry’s focus from desktop to the cloud. By 2024 the platform boasted over 30 million monthly active users (Statista, 2024) and a user base that includes every major design team in Fortune 500 companies.
• IPO Snapshot – On September 4, 2024, Figma went public on the Nasdaq under the ticker FIGM. The IPO priced the stock at $60 per share, a 50‑plus‑percent premium on the $38 last‑closing price. The debut saw a 35‑percent first‑day jump, sending the share price to $65.
• Revenue and Earnings – In FY 2024, Figma posted $215 million in revenue, a 36% year‑over‑year increase, and $40 million in operating income – a solid first profitable year for a design‑software company.

2. What Caused the 70% Decline?

The article explains that the steep slide was a combination of macro‑economic turbulence and sector‑specific headwinds.

3. Why the Stock Is Attractive Today

The core of the article’s argument lies in the “value at the margin” that investors can now purchase.

a. Fundamental Strengths

• User Base & Engagement – 30 million monthly active users with a 90% retention rate across enterprise tier plans.
• Recurring Revenue – Over $80 % of revenue is subscription‑based, providing predictable cash flows. The company recently announced a $500 M growth‑stage round to further scale its sales team, implying robust pipeline.
• Product Roadmap – Figma’s upcoming AI‑driven “Auto‑Layout 2.0” is slated for Q2 2026, slated to further lower the design‑to‑deployment barrier.

b. Valuation Metrics

• Price‑to‑Sales (P/S) – At current price, the P/S sits around 4x, a steep discount from the pre‑sell‑off 8x.
• Enterprise Value/EBITDA – The EV/EBITDA is now 12x, comfortably below the historical average of the design‑software sector (~18x).
• DCF Estimate – A discounted‑cash‑flow model using a 10% discount rate values the firm at $1.2 bn versus the market cap of $800 m, implying a 50% upside.

c. Catalysts

1. Global Expansion – Figma recently opened offices in Berlin and Singapore to tap into the EU and APAC markets. Early revenue data shows 35% YoY growth in those regions.
2. Strategic Partnerships – A joint venture with Atlassian’s Jira is expected to integrate design workflows into software development pipelines, widening adoption.
3. Adoption of Generative AI – The new AI‑assistant will allow designers to generate wireframes from natural‑language briefs, driving higher seat adoption.

4. Risks & Caveats

While the upside is compelling, the Forbes article also cautions about several risks:

• Macroeconomic Tailwinds – A prolonged recession could cut IT budgets, slowing new seat purchases.
• Competitive Landscape – Adobe’s continued investment in UX and the arrival of generative‑AI design tools could erode Figma’s market share.
• Execution Risk – Scaling the AI features will require significant R&D spending; any delays could hit growth targets.
• Valuation Reset – If the tech sell‑off continues, Figma may see further price erosion before reaching a stable equilibrium.

5. Take‑Away Takeaways

1. The Stock Is Currently Undervalued – With a P/S of 4x and an EV/EBITDA of 12x, Figma sits at a discount relative to both its own historical valuations and the broader design‑software sector.
2. Strong Fundamentals Remain – Robust user base, recurring revenue, and a clear growth trajectory support the upside case.
3. Catalysts Exist, but Risks Remain – Expansion into new geographies, AI integration, and partnerships are the major growth drivers, but macro uncertainty and competitive dynamics remain key risks.

6. Where to Find More Information

The original Forbes article references several sources that add depth to the analysis:

• Statista Reports – For up‑to‑date user statistics and market share data.
• Company Earnings Calls – Transcripts from Q4 2025 and FY 2026 forecasts provide context on the revenue growth and AI roadmap.
• Industry Analysis – A 2025 McKinsey report on “Digital Design Platforms” outlines the competitive positioning and future market size.

Investors are advised to read the Forbes article in its entirety, check the latest SEC filings, and monitor the upcoming earnings releases to refine their view of Figma’s valuation and growth prospects.

Bottom Line:
After a steep 70% slide, Figma’s shares sit at a price that reflects only a fraction of its intrinsic value, based on solid fundamentals, an expanding user base, and exciting product and partnership pipelines. While macro risks and competitive pressures are present, the consensus among the article’s analysts leans toward a bullish outlook—provided the company can deliver on its AI roadmap and maintain its momentum in global markets. For long‑term investors looking for a potentially undervalued growth play, Figma’s current price presents a compelling entry point.