Figma’s Stock Seeks Stability Following Market Correction

Figma US3168411052

After a significant decline from its peak valuation, the design software company Figma appears to be searching for a stable trading range. Recent analysis from Wall Street suggests the intense selling pressure of recent months may be easing. The central question for investors is whether the firm's impressive operational growth can ultimately translate into sustained market success.

Despite stock market turbulence, Figma's underlying business continues to expand at a rapid pace. Revenue for the most recent quarter jumped 38% year-over-year to $274.2 million. This growth is being fueled by the rollout of new AI-powered features and the strategic acquisition of the technology firm Weavy. Financially, the company remains well-positioned with a liquid asset balance exceeding $1.5 billion, providing ample resources to fund its expansion strategy without needing to raise additional capital.

The firm's fundamental metrics are notably strong. It operates with impressive gross margins of 86% and has achieved an annual recurring revenue run-rate surpassing $1 billion. A key indicator of customer satisfaction, the Net Dollar Retention Rate for its large enterprise clients stands at 131%, demonstrating that existing customers are consistently increasing their spending.

Diverging Views from Financial Analysts

Market experts are presenting mixed signals regarding Figma's near-term prospects. Analysts at Wells Fargo upgraded their rating to "Overweight," assigning a price target of $52 per share. In contrast, Stifel Nicolaus initiated coverage with a more cautious "Hold" rating and a $40 price target, citing the need for further margin improvement. The current consensus rating among analysts sits at "Hold," reflecting a prevailing sense of caution on Wall Street. This hesitancy is partly driven by Figma's continued net losses, which reached $1.1 billion in the third quarter of 2025 due to one-time compensation-related expenses.

Enterprise Spending Holds the Key

A recent report from RBC Capital Markets points to potential stabilization in corporate IT budgets by 2026. This outlook is particularly relevant for Figma, as its cloud-based collaboration tools are heavily dependent on the spending patterns of large enterprise clients. A recovery in this segment would provide a substantial tailwind for the business.

The upcoming quarterly earnings reports will be critical. They will reveal if Figma can meet expectations for stabilizing enterprise expenditure and, more importantly, begin converting its robust operational performance into a clear path toward sustainable profitability.