Should I buy Figma stock for IPO?

**Figma's IPO presents both opportunities and risks**, and whether to buy its stock depends on your investment strategy, risk tolerance, and the weight you give to the following factors:

1. **Financial Performance and Growth Prospects**:
- Figma has shown strong revenue growth, with a 4.7% year-over-year increase and a reported $124.9 million in revenue as of Q1 2025.
- However, the company has a negative net income of $102,000 and a diluted EPS of $0 for the same period.
- Figma's net income saw a significant decline, with a year-over-year growth rate of -107.11%.

|code|Ticker|Name|Date|Net Income YoY|Total Revenue YoY|Diluted EPS YoY|market_code|
|---|---|---|---|---|---|---|---|
|FIGS|FIGS.N|FIGS|2024 Q2|-75.99301615015277|4.410998175658066|-50|169|
|FIGS|FIGS.N|FIGS|2024 Q3|-127.6602668402213|-1.513725380011801|-133.33333333333334|169|
|FIGS|FIGS.N|FIGS|2024 Q4|-81.15|4.770973930084599||169|
|FIGS|FIGS.N|FIGS|2025 Q1|-107.10801393728222|4.701030236476575|-100|169|

2. **Valuation Metrics**:
- Figma's price-to-earnings (P/E) ratio is high at 828.56, indicating that the stock is expensive relative to its earnings.
- The price-to-sales (P/S) ratio is 1.75, and the price-to-book (P/B) ratio is 2.57.
- These metrics suggest that the market may be valuing Figma's growth potential highly.

|code|Ticker|Name|Date|P/E(TTM)|P/S|Price to Book Ratio|market_code|
|---|---|---|---|---|---|---|---|
|FIGS|FIGS.N|FIGS|20240722|47.900042|2.014300068761906|2.7157909259634496|169|
|FIGS|FIGS.N|FIGS|20240723|51.673518|2.172982871606494|2.9297358702917604|169|
|FIGS|FIGS.N|FIGS|20240724|50.133324|2.1082143806495193|2.8424114032189802|169|
|FIGS|FIGS.N|FIGS|20240725|52.212586|2.1956518434414347|2.9602994337672333|169|
|FIGS|FIGS.N|FIGS|20240726|51.36548|2.160029173415099|2.912270976877204|169|
|FIGS|FIGS.N|FIGS|20240729|51.21146|2.153552324319401|2.9035385301699264|169|
|FIGS|FIGS.N|FIGS|20240730|50.980431|2.143837050675855|2.8904398601090096|169|
|FIGS|FIGS.N|FIGS|20240731|50.110156|2.1072401202194917|2.8380451798653414|169|
|FIGS|FIGS.N|FIGS|20240801|49.724694|2.091030580833188|2.816214063097147|169|
|FIGS|FIGS.N|FIGS|20240802|46.332621|1.9483866342337146|2.624100235537031|169|

3. **Analyst Sentiment**:
- The average analyst price target is $4.75, with a consensus rating of "Neutral".
- This suggests that analysts do not see immediate upside potential, but the high P/E ratio may indicate a long-term growth story.

4. **Market Conditions and Company Strategy**:
- Figma is looking to raise up to $1.03 billion in its IPO, with a valuation of $13.6 billion.
- The company plans to use the proceeds for global expansion, R&D, AI innovation, enterprise integration, and possible acquisitions.
- Figma's strategic positioning in the design software sector and its focus on AI could position it well for future growth.
5. **Risks to Consider**:
- The company's recent history, including a significant one-time employee stock compensation event, could impact future profitability.
- The AI integration could pose challenges and impact efficiency in the near term while being critical for long-term growth.
- The lack of software IPOs since 2021 might indicate a broader market sentiment that could affect Figma's performance.

In conclusion, if you are interested in high-growth software companies with a long-term perspective and can tolerate the high valuation and recent financial volatility, Figma's IPO might be worth considering. However, given the current financials and the high P/E ratio, this investment is more suitable for those who can hold the stock for an extended period, hoping to benefit from potential future growth. If you are looking for immediate returns or are risk-averse, you might want to exercise caution.