Should Investors Buy Figma Stock Amid Recent IPO Weakness?

Figma's stock has tumbled after its IPO, dropping from $120 to $70 per share. Despite impressive financials, including $821 million in revenue and a 46% growth rate, investors should be patient with the stock due to the company's reliance on upselling existing customers and its high price-to-sales ratio of 35. Figma will need to develop new products to overcome growth hurdles.

Figma's stock has experienced a significant drop following its initial public offering (IPO), falling from $120 to $70 per share. Despite impressive financial results, including $821 million in revenue and a 46% year-over-year growth rate, investors have shown patience with the stock [2]. The company's reliance on upselling existing customers and its high price-to-sales ratio of 35 have contributed to investor caution [2].

Analysts have noted that Figma's current business model, which focuses on upselling existing customers, may face challenges in driving long-term growth. Piper Sandler, in starting its coverage of Figma, has given the stock an 'overweight' rating with a price target of $85, implying a potential upside of 22.5% [2]. However, the brokerage also acknowledges the company's high price-to-sales ratio and the need for new product development to overcome growth hurdles.

Figma's collaborative design software is used to build websites, apps, and digital products, with notable customers including streaming giant Netflix and travel firm Airbnb. The company's stock closed the previous session at $69.41, up approximately 110% from its IPO price of $33 [2]. Despite the strong performance, investors should remain vigilant about the company's ability to sustain growth.

References:
[1] https://www.ainvest.com/news/adobe-downgraded-sell-ai-competition-figma-ipo-threat-2508/
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3UC0R0:0-figma-rises-as-piper-sandler-starts-coverage-with-overweight-rating/