Where Will Figma Stock Be in 1 Year?

Figma (NYSE: FIG), a provider of cloud-based user interface (UI) and user experience (UX) tools, went public on July 31 at $33 a share. Its stock started trading at $85 and skyrocketed to a record high of $142.92 just two days later, but it now trades at about $52.

Figma's initial public offering (IPO) originally attracted a lot of attention because it challenged Adobe (NASDAQ: ADBE) with cloud-native UI/UX tools that could be run directly within a browser. It also provided real-time collaboration features, which allowed multiple users to access the same project.

Image source: Getty Images.

By comparison, Adobe's Creative Cloud apps are still installed as desktop apps before being synchronized across its cloud platform. Adobe added collaboration tools to those apps only after Figma proved they were essential features. Adobe even tried to buy Figma for $20 billion in 2022, but that deal collapsed amid antitrust concerns in 2023.

At its peak, Figma's market cap nearly reached $60 billion. It's only worth about $25 billion today, but that's still a lot higher than Adobe's original bid. Let's see what happened to Figma over the past year and whether its stock will head higher or lower over the next 12 months.

How fast is Figma growing?

Figma allows designers to design scalable graphics, create UI interfaces such as buttons, transform static designs into animations, and even access other third-party apps through plug-ins. It can be used to design websites and mobile apps, create interactive product prototypes, build design systems for organizations, and serve as a collaborative brainstorming platform. As a browser-native platform, Figma works across a wide range of operating systems without any on-device installations.

Figma operates a freemium business model, meaning it provides a free tier for individuals and small teams, while its subscription-based professional and organization tiers provide additional security, analytics, and administration tools. Its total number of customers generating at least $10,000 in annual recurring revenues (ARR) rose 45% to 10,517 in 2024.

Within that core cohort, its net dollar retention rate -- which gauges its year-over-year revenue growth for each customer -- increased from 122% in 2023 to 134% in 2024. Its number of large customers (which generate at least $100,000 in ARR) also rose 53% to 963 in 2024, which suggests it's gaining ground on Adobe in the enterprise market.

In 2024, Figma's revenue surged 48% to $749 million, but it posted a net loss of $732 million, compared to its net profit of $738 million in 2023. It attributed that net loss to some big one-time stock-based compensation expenses (mainly from its aborted acquisition by Adobe and a release of its restricted stock units) and other non-recurring expenses. But if we tune out that noise, we'll notice its gross margin dipped only from 91% in 2023 to 88% in 2024, so it still has plenty of pricing power.

Why did Figma's stock pull back?

In the first half of 2025, Figma's revenue rose 43% year over year to $478 million, its gross margin expanded by six percentage points to 90%, and its adjusted net income (which excludes the messy stock-based compensation expenses) rose 51% to $62 million. Its number of customers with at least $10,000 in ARR grew 31% year over year to 11,906, while its number of customers with more than $100,000 in ARR rose 42% to 1,119.

For the full year, Figma expects its revenue to rise by a midpoint of 37%. However, it expects its adjusted operating income to decline 23% to 31% as it rolls out more products, including Figma Draw, Figma Sites, and other artificial intelligence (AI)-powered tools; potentially cannibalizes its subscription plans with its new consumption-based fees, which might attract more customers but generate lower-margin revenues; and ramps up its cloud infrastructure, sales, and marketing investments.

That combination of slowing growth and rising expenses spooked the bulls. At its all-time high, Figma was valued at a whopping 58 times this year's sales. But since its stock was priced for perfection and its full-year outlook wasn't a home run, it shed that hypergrowth valuation. Even after its steep decline over the past two months, Figma still doesn't look like a bargain at 25 times this year's sales. Adobe, which is growing at a much slower rate, trades at just 6 times this year's sales.

Where will Figma's stock be in a year?

From 2024 to 2027, analysts expect Figma's revenue to grow at a compound annual growth rate (CAGR) of 25%. If it matches those estimates and still trades at 25 times its forward sales at the end of 2026, its market cap could rise 45% to nearly $37 billion within the next 12 months. Even if it trades at a more modest 20 times forward sales, its stock would still rise about 16%.

Figma's business is still firing on all cylinders, but too much growth is already baked into its stock. I think it has a shot at outperforming the S&P 500, which has generated an average annual return of 10% ever since its inception, but it probably won't generate life-changing returns over the next 12 months.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe. The Motley Fool has a disclosure policy.