Where Will Figma Stock Be in 1 Year?

Key Points

• Figma's median 12-month price target suggests that it could head higher in the coming year.

• The company's growth trajectory and valuation, however, could continue to weigh on the stock.

• 10 stocks we like better than Figma ›

Figma (NYSE: FIG) made a blockbuster debut on the stock market less than two months ago, rising a phenomenal 250% on its first day as a public company on July 31. However, its stock market performance has been anything but phenomenal since then.

Figma stock is down 52% since Aug. 1. The post-initial public offering (IPO) euphoria didn't last long. The company's second-quarter results, released earlier this month, didn't help matters either. A tepid outlook and signs of slowing growth led some investors to press the panic button.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

However, analysts still seem upbeat about Figma stock's trajectory in the coming year and expect it to regain its mojo.

Image source: Getty Images

Figma is expected to deliver decent upside in the next year

Figma is a collaborative interface design platform founded in 2012 that enables customers to collaborate and make apps and websites, along with other digital products, using web browsers and/or desktop applications.

Figmaa's stock sports a median 12-month price target of $69, according to 11 analysts covering it. That would translate into a potential jump of 17% from current levels. The Street-high price target of $85 is even more ambitious, indicating a possible upside of 44%. But what's worth noting here is that only four of the 11 analysts covering Figma suggest buying the stock. The remaining have a hold rating. Clearly, Figma isn't rated as an overwhelming buy right now by analysts, and it is easy to see why that's the case.

The stock is extremely expensive right now. It has a price-to-sales ratio of 32 and a forward earnings multiple of 153. That valuation doesn't seem justified when taking into account Figma's recent numbers and outlook for 2025.

The expensive valuation could send the stock lower

Even though Figma stock has pulled back significantly following its post-IPO pop, its valuation remains pretty expensive when we consider that the U.S. technology sector has an average sales multiple of 9 and an average earnings multiple of 51. This leaves room for more downside in the stock in the coming year, taking into account its slowing growth trajectory.

Figma's Q3 revenue growth guidance of 33% is lower than the 41% year-over-year growth it delivered in Q2. The company is anticipating its full-year growth to land at 37% at just over $1 billion. That's definitely not a lot when we consider that there are companies that are clocking much faster growth rates and are available at more attractive valuations.

There are some other points of concern as well. Figma's net-dollar retention rate of customers who have generated more than $10,000 in annual recurring revenue (ARR) has been sliding. This metric has dropped from 159% in the first quarter of 2023 to 129% in the latest quarter. As the net-dollar retention rate compares the ARR of its customers at the end of a quarter to the ARR of the same customers in the year-ago period, the slide in this metric indicates that existing customers have slowed their adoption of Figma's offerings.

Also, the rate of new customer additions is slowing down. The number of customers with more than $10,000 in ARR increased by 31% in Q2, down from the 42% jump in the year-ago period. All these trends clearly indicate that Figma may find it difficult to sustain high levels of growth.

Of course, catalysts such as artificial intelligence (AI) and a sizable addressable market may give it a shot in the arm, but the massive spike in its share price following its IPO means that the stock has gotten ahead of itself.

In simpler words, Figma's valuation doesn't justify buying the stock right now. That's especially true when we consider that analysts expect its top-line growth to slow down to 23% next year, while the bottom line is expected to drop by 29%.

As such, Figma is unlikely to live up to the 12-month median price target it currently has. In fact, there is a good chance that it could continue heading south toward its 12-month low price target of $49 -- a potential drop of 16% -- if there aren't signs of a turnaround in its financial performance.

That's why investors would do well to stay away from Figma, as its expensive valuation is likely to weigh on the stock price in the coming year.

Should you invest $1,000 in Figma right now?

Before you buy stock in Figma, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Figma wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,280!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,084,802!*

Now, it’s worth noting Stock Advisor’s total average return is 1,058% — a market-crushing outperformance compared to 189% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 22, 2025

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.