Figma Plunges 30% in 3 Months: Should You Hold or Fold the Stock?

Figma FIG shares have lost 29.8% in the past three months, underperforming the Zacks Internet - Software industry’s decline of 12.5%.

Figma Three-Month Performance Chart

Despite its decline in share price, FIG stock has been trading at a premium as reflected by value score F. Figma stock is trading at a premium, with a forward 12-month Price/Sales of 12.85X compared with the Computer and Technology sector’s 4.92X.

Figma 

The underperformance and overvaluation of FIG stock raises the question: Should investors buy, sell or hold Figma stock? Let’s discuss the fundamentals in detail.

Figma Faces Operational Challenges

Figma’s non-GAAP operating profit contracted 28.9% year over year to $34.02 million. The non-GAPP operating profit margin contracted to 12% from 24% in the year-ago quarter. The contraction in the margin is attributable to cost pressures emerging from the roll out of Figma Make and other AI features in the platform.

The company is also facing competitive challenges from established players, including Adobe ADBE, Microsoft MSFT and Atlassian TEAM. Adobe’s Firefly and Microsoft Copilot have been playing a crucial role in driving their respective top-line growth and profitability, causing them to burn into Figma’s market share.

Microsoft’s Teams and Office 365 suite provides collaboration and enterprise workflows, which directly compete with Figma across whiteboarding, developer workflows, AI productivity, and enterprise adoption, leaving Figma with all these areas to defend. Adobe recently partnered with Google Cloud to enhance Adobe’s creative ecosystem with AI.

Atlassian is focusing on adding generative AI features to some of its collaboration software. Atlassian is partnering with Google Cloud to bring Atlassian’s AI-powered teamwork platform, including Jira, Confluence, and Loom, onto Google’s AI-optimized infrastructure. This will allow for deeper Gemini integrations and smoother collaboration across platforms.

These factors are a threat to Figma’s growth prospects. However, not everything is gloom and doom for Figma.

Figma Benefits From Paid Customer Count

Despite facing stiff competition from large players, Figma is able to grow its customer base robustly. As of Sept. 30, 2025, the company had 12,910 paid customers with more than $10,000 in annual recurring revenues (ARR) and 1,262 paid customers with more than $100,000 in ARR.

Figma commanded a net dollar retention rate of 131% for customers spending $10,000 or more annually in the third quarter of 2025. In the third quarter of 2025, FIG’s customer base grew significantly, with the company adding more than 90,000 paid teams in just two quarters, bringing the total to 540,000 paid customers.

This growth was driven by the adoption of new products like Figma Make and AI features, which attracted new users and expanded usage within existing teams. Earlier in 2025, Figma launched four new products — Figma Make, Figma Draw, Figma Sites and Figma Buzz — doubling its product offerings.

The launch of Figma Make has been a strong move. Approximately 30% of customers spending $100,000 or more in ARR were using Figma Make weekly by the end of September. Figma also launched the Dev Mode MCP server, which speeds up developer workflows by bringing context from Figma Design into any surface that consumes MCP.

Conclusion: Hold FIG Stock for Now

Figma’s stock slump, premium valuation, margin pressure, and rising competition make near-term upside uncertain, but strong customer growth and product adoption show resilience. Given mixed fundamentals, elevated risks, and solid long-term potential, we suggest investors retain this Zacks Rank #3 (Hold) stock now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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