Track market-moving stories before they get noisy

Shares of the software company Figma (FIG +4.20%) tumbled 16.5% this week, according to data provided by S&P Global Market Intelligence, as investors continue to worry that artificial intelligence companies will disrupt software stocks.

Figma reports its second-quarter results early next month, and investors don't appear eager to wait around and find out how the company is navigating the increasingly complex AI software space.

Image source: Getty Images.

No room for error It's not uncommon for some shareholders to sell ahead of an earnings report if they're concerned about an unusually poor quarter or the overall direction of the company.

In Figma's case, the company's shares are trading at a premium compared to the broader tech sector, leaving little room for error in the quarterly results. Figma stock has a forward price-to-earnings (P/E) ratio of 158, which is quite a premium when shareholders are already worried that AI could replace some of the company's services.

There's no question that AI is becoming more capable, with news surfacing this week that an unreleased OpenAI ChatGPT model went rogue during a cybersecurity test and hacked another website to try to find answers to the test. Even though Figma isn't a cybersecurity company, the incident underscores that AI models are far more sophisticated than many software companies' services.

Figma is showing signs of life, however, even if its falling stock price doesn't reflect that. First-quarter revenue rose 46% from the year-ago quarter to $333.4 million, net dollar retention was 139%, and Figma management raised the company's full-year guidance to more than $1.4 billion -- a 35% increase year-over-year.

Still, it clearly hasn't been enough to ease investors' concerns. Anthropic launched Claude Design at the end of April, and it directly competes with Figma's platform. The sell-off this week shows that shareholders aren't yet confident that Figma can outlast its AI rivals.

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More insight is coming If you're trying to decide whether to buy shares of Figma right now, it's probably best to wait until after the company's second-quarter results are released on Aug. 5.

Personally, I'd probably wait a few quarters before considering buying shares, to see how well the company adapts to its new competition and if it can continue retaining customers -- and adding new ones -- amid the rollout of Anthropic's Claude Design.

At this point, Figma will have to report some very impressive results to ease investor fears.

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Figma (NYSE:FIG) has whipsawed from post-listing euphoria into a brutal reset. After a punishing drawdown, the setup is more interesting than the recent price action suggests. Our analysis points to meaningful upside from current levels, driven by 46% top-line growth, a rebuilt valuation, and consensus quietly settled around a target well above the current price.

The 24/7 Wall St. price target for Figma is $30.56 over the next 12 months, implying 30.04% upside from the recent close of $23.50. Our recommendation is buy, with medium confidence.

24/7 Wall St. Price Target Summary Metric Value Current Price $23.50 24/7 Wall St. Price Target $30.56 Upside 30.04% Recommendation BUY Confidence Level Medium (approximately 60%) From a $50 Billion Wipeout to a Cautious Comeback Figma is down 79.65% over the past year and 37.12% year to date, having collapsed from a 52-week high of $142.92 to a low of $16.60. Shares are up 26.96% in the past month and 8.44% in the past week.

The turn is grounded in fundamentals. Q1 2026 revenue hit $333.44 million, growing 46% year over year, with a GAAP net loss of $142.4 million largely from stock-based compensation. CEO Dylan Field sold 174,430 shares on May 29, 2026 under a pre-arranged 10b5-1 plan. The next earnings report lands August 5, 2026.

Why Bulls See a Path to $40+ The bull case rests on hypergrowth, category dominance, and AI leverage. Revenue growing 46% nearly doubles what mature design software peers deliver. J.P. Morgan and RBC hold $28 price targets, while Piper Sandler projects profitability by year-end 2026.

If Figma monetizes AI-native design tools and paid subscribers expand, a bull scenario multiple of 13x forward sales supports $40 or higher.

The Risks Worth Watching Figma trades at 10.76x sales while losing money, and its EV/EBITDA of 441x is not a real multiple. Insider sales from the CEO, CFO, CRO, and CTO between May and June signal capped near-term enthusiasm.

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Bulls counter that these were pre-arranged 10b5-1 sales, and stock-based comp drove the GAAP loss. A downside scenario with multiple compression to 6x sales points to roughly $15.

How Figma Compares to Adobe and Autodesk Adobe (NASDAQ:ADBE | ADBE Price Prediction) is the direct incumbent in creative software. Adobe posted Q2 FY26 revenue of $6.62 billion growing 13% with non-GAAP EPS of $5.96, and trades at roughly 3.4x forward sales. Figma grows more than three times faster but at three times the sales multiple, making our target reasonable rather than aggressive.

Autodesk (NASDAQ:ADSK) is the design-and-make comparable. Autodesk posted Q1 FY27 revenue of $1.93 billion up 18.4% at roughly 5.4x forward sales. Figma’s premium over Autodesk is justified by the growth gap but leaves less room for execution error.

Company Revenue Growth P/S (approx.) Figma 46% 10.76x Adobe 13% 3.4x Autodesk 18% 5.4x Figma Price Prediction 2026-2030 The 24/7 Wall St. price target of $30.56 implies buy with medium confidence. Growth, sentiment recovery, and consensus anchor the upside.

I’d be a buyer if the August 5 earnings report confirms revenue growth staying above 40% and paid subscriber momentum continues. I’d stay on the sidelines if Figma guides down or gross margin compresses. The risk-reward tilts constructive.

Year 24/7 Wall St. Price Target 2026 $30.56 2027 $38.00 2028 $46.00 2029 $54.00 2030 $62.00 These projections assume Figma sustains 25% to 35% annual revenue growth and reaches GAAP profitability by 2027. Significant upside or downside could result from AI-driven design disruption or aggressive competition from Adobe and Canva.

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Figma stock has staged a modest comeback in the past few days, moving from a record low of $16.80 to the current $23.65.

This rebound may continue in the coming weeks after the stock formed a double-bottom pattern and as its earnings report looms. 

The daily chart shows that Figma’s tide is turning after months of falling. It formed a double-bottom pattern at $16.80, its lowest level in April and June this year. Its neckline was at $27.80, its highest point on June 1 this year.

The stock has now moved above the 50-day Exponential Moving Average (EMA), while the Relative Strength Index (RSI) has jumped to 61 from the year-to-date low of 17.83. 

Therefore, the stock will likely continue rising in the near term, potentially to the key resistance at $27.80.

A move above that level will point to more gains, potentially to the Ultimate Resistance of the Murrey Math Lines of $31.25, which is about 35% above the current level. 

Figma Inc. stock chart | Source: TradingView

Figma is a top player in the software industry, where it offers a platform that simplifies how companies design. It is used widely by companies of all sizes, including giants like Google, Airbnb, Atlassian, Microsoft, GitHub, and Duolingo. 

Its stock initially jumped after its IPO last year and then started a strong downward trend, reaching a record low this year.

This retreat happened as investors dumped software companies in a process that has become known as the SaaSApocalypse. Other top software companies like Atlassian, Adobe, Autodesk, and ServiceNow have plunged.

In reality, however, Figma’s business has continued to grow as more companies have embraced its solution.

Its last financial results showed that its revenue jumped by 46% in Q1 to $333.4 million, higher than its previous guidance.

The company’s results showed that its business continued to attract clients despite the AI disruption. The number of companies paying over $10,000 jumped to 15,218 from 11,107 in the same period last year.

Those paying $100,000 and above jumped to 1,525 from 1,031. Notably, the company received an order from one hyperscaler that added 35,000 paid seats during the quarter.

Instead of being disrupted by AI, the company is using this technology to improve and monetize its solution. For example, it started to implement AI credit limits for all its customers in March, without experiencing any significant churn.

The management team expects that the upcoming earnings report will show that its business continued growing in Q2.

Its guidance is that its revenue will be between $348 million and $350 million, up by 40% YoY. 

It expects its annual revenue to be between $1.422 billion and $1.428 billion, representing a 35% YoY growth. The real figure will likely be higher than that, as the management tends to be highly conservative.

Most analysts have a price target that is higher than the current one. Bank of America analysts have a target of $30, while Wells Fargo’s Michael Turrin has a target of $36.

Piper Sandler, Citigroup, and JPMorgan analysts have targets of above $30.

Figma does have some challenges. For example, competition continues to rise, with companies like Sketch and Adobe being major ones.

Also, it is still losing money, with its loss from operations rising to $137 million in the first quarter. Its valuation is still high, with its forward price-to-sales ratio rising to 7.7. 

Shares of Figma (FIG 5.26%) fell 51.6% in the first half of 2026, according to data from S&P Global Market Intelligence.

The collaborative design platform posted excellent financial results, but investors spent the first half of the year worrying about what AI might do to the business.

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Great quarter, rough six months Figma's Q1 2026 report in mid-May was impressive by most measures. Revenue rose 46% year over year to $333.4 million. Non-GAAP earnings per share came in at $0.10, nearly doubling the $0.06 consensus estimate. Net dollar retention hit 139%, the highest level in over two years. Management raised full-year revenue guidance by $55 million.

The stock jumped 10% after hours on the news. But the relief was short-lived. June happened, and shares lost 29% in a single month.

The culprit? Fear of AI-native competition, particularly Anthropic's Claude Design. The fear is that generative AI could commoditize design work, making Figma's collaborative platform less essential over time. It's a legitimate question, but one that Figma's actual results haven't validated yet.

Management is working to integrate AI features and monetize them through credit-based pricing, but investors remain skeptical.

Image source: The Motley Fool.

Figma started charging for AI credits in mid-March. Early signs were positive: over 75% of enterprise users who hit their limits kept paying for more. Teams buying AI add-ons spend more than three times as much annually as those who don't. CEO Dylan Field has emphasized that Figma's multiplayer canvas and deep product context give it advantages that AI-only tools can't easily replicate.

But the narrative around potential AI disruption proved more powerful than the numbers.

Activist investor Findell Capital piled on in late May, calling the stock "significantly undervalued" and urging management to examine its relationship with Anthropic. A securities law investigation announced in March added to the noise. None of this helped the stock find its footing.

Not cheap, but worth a premium price Figma's stock isn't cheap. Trading at 47 times free cash flow and 62 times forward earnings, the valuation still soars in the stratosphere even after the recent price drops.

But that's typical for a company growing revenue at 46% year over year with improving profitability. The company has $1.6 billion in cash and nearly 690,000 paid customers with strong upsell dynamics. Switching costs are real, whether you're moving to other collaborative design platforms or to newfangled AI prompts.

Think of Figma as an AI-fueled Adobe (ADBE +0.50%) for teams. The product is embedded in enterprise workflows. AI-native tools might erode that moat over time, but the revolution won't be quick. Can Figma stay ahead by building AI into its own platform?

It's probably not the time to back up the truck and load up on Figma stock. But this innovative growth story is worth keeping on the watch list. Q2 earnings in August should offer more clarity on whether the AI threat is real or overblown.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe and Figma. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.

The pullback looks more like consolidation after that pop than a clean reversal of the longer-term downtrend. Figma is still working back from a drawdown of about 85% from its 52-week high, a setup that can keep volatility elevated on red-market days.

Figma stock is trending lower. Why is FIG stock trading lower? What Is Driving Figma’s Stock Today?Figma’s bull case is also leaning on a growth-versus-peers valuation argument, with the stock framed at 8x estimated 2027 EV/sales versus a peer average around 5.9x. Bank of America also modeled revenue growth of 35.6% in 2026 and 23% in 2027, versus peer averages of 19.3% and 15.7%.

Critical Price Levels To Watch For FIGFrom a trend perspective, FIG is still trying to repair damage after a steep 12-month slide of 81.25%, and the longer-term moving averages remain a headwind. The stock is trading about 31.8% below its 200-day SMA ($31.80) and about 1.7% below its 100-day SMA ($22.06), even though it’s holding above the 20-day SMA ($19.36) and 50-day SMA ($20.46).

The moving-average structure is still bearish: the 20-day SMA is below the 50-day SMA, and the death cross (50-day below 200-day) that formed in January is still in place. That said, MACD is above its signal line with a positive histogram, which suggests downside pressure is easing versus the prior downswing (it’s a momentum "improving" read, not a full trend flip by itself).

Key Resistance: $25.50 — a nearby pivot area where rebounds can stall before the stock can reclaim longer-term trend levels Key Support: $18.00 — a nearby zone close to where buyers have previously stepped in, not far above the $16.60 52-week low How Figma Operates in the Digital Product SpaceFigma is focused on turning ideas into digital products and experiences, with a browser-based platform that spans more of the software creation lifecycle than "design" alone. It sells subscriptions for access to its platform, which is why enterprise adoption and retention metrics tend to matter as much as near-term product headlines.

That business framing is central to the AI debate: the bullish view is that AI increases the number of people building digital products and makes workflows more complex, pushing teams toward a centralized collaboration layer.

Figma Stock Price Movement TodayFIG Stock Price Activity: Figma shares were down 2.79% at $21.57 at the time of publication on Wednesday, according to Benzinga Pro data.

Image: Shutterstock

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Figma (NYSE:FIG) was reinstated with a ‘Buy’ rating and a $30 price objective by Bank of America, with the firm arguing that artificial intelligence is likely to strengthen the company's competitive position rather than undermine it.

Shares of Figma traded higher on the news, adding more than 7% at about $23 on Tuesday afternoon.

Bank of America analysts wrote that concerns over generative AI disrupting the design software market have weighed on the stock, but they believe AI is more likely to act as a tailwind by expanding demand for collaborative workflows.

The firm also pointed to progress in Figma's transition toward a hybrid consumption- and seat-based pricing model as a potential driver of additional monetization.

The analysts wrote that while AI can speed up content creation, it also increases the need for platforms that enable teams to collaborate, coordinate and move AI-generated work into production environments. They expect this trend to reinforce Figma's strategic role as more individuals and organizations adopt AI tools.

Bank of America also cited early signs that AI-related products are contributing to growth. According to the firm, 75% of enterprise customers purchased additional AI credits after exceeding their initial allocations during the first quarter of fiscal 2026, which the analysts wrote reflects strong engagement and willingness to pay for AI capabilities.

The firm noted that enterprise customers generating more than $100,000 in annual recurring revenue increased 48% year over year, while net dollar retention stood at 139% and paid-user growth reached 54%.

Bank of America said it expects Figma's revenue to grow 36% in fiscal 2026 and 23% in fiscal 2027. The firm values the company at 8 times estimated calendar 2027 enterprise value-to-sales, citing what it views as a premium growth profile despite expected near-term margin pressure from AI investments.

The analysts wrote that key risks to their outlook include slower-than-expected adoption, increased competitive pressure and weaker monetization of AI offerings.

Figma (NYSE:FIG) was reinstated with a ‘Buy’ rating and a $30 price objective by Bank of America, with the firm arguing that artificial intelligence is likely to strengthen the company's competitive position rather than undermine it.

Shares of Figma traded higher on the news, adding more than 7% at about $23 on Tuesday afternoon.

Bank of America analysts wrote that concerns over generative AI disrupting the design software market have weighed on the stock, but they believe AI is more likely to act as a tailwind by expanding demand for collaborative workflows.

The firm also pointed to progress in Figma's transition toward a hybrid consumption- and seat-based pricing model as a potential driver of additional monetization.

The analysts wrote that while AI can speed up content creation, it also increases the need for platforms that enable teams to collaborate, coordinate and move AI-generated work into production environments. They expect this trend to reinforce Figma's strategic role as more individuals and organizations adopt AI tools.

Bank of America also cited early signs that AI-related products are contributing to growth. According to the firm, 75% of enterprise customers purchased additional AI credits after exceeding their initial allocations during the first quarter of fiscal 2026, which the analysts wrote reflects strong engagement and willingness to pay for AI capabilities.

The firm noted that enterprise customers generating more than $100,000 in annual recurring revenue increased 48% year over year, while net dollar retention stood at 139% and paid-user growth reached 54%.

Bank of America said it expects Figma's revenue to grow 36% in fiscal 2026 and 23% in fiscal 2027. The firm values the company at 8 times estimated calendar 2027 enterprise value-to-sales, citing what it views as a premium growth profile despite expected near-term margin pressure from AI investments.

The analysts wrote that key risks to their outlook include slower-than-expected adoption, increased competitive pressure and weaker monetization of AI offerings.

In Brief

Posted:

11:37 AM PDT · July 7, 2026

Image Credits:Figma Figma is trying to become more than a design platform by adding more AI and bringing the coding and prototyping layer closer to its canvas. Toward that end, it has acquired the team behind the vibe-coding and AI agent platform Bud (formerly Orchids).

“Figma is one of, if not the, defining product companies of our time to capitalize on this. It’s where ideas start, iterate, and come to life, and a natural home for this exciting new era of work,” Bud’s CEO Kevin Lu posted on X.

The Y Combinator-backed startup began as a vibe-coding platform letting users spin up apps for mobile, web, Slack, browser, and more. It later rebranded as Bud, an agent platform that can access various services, browse the web, and write code to automate tasks.

Under the deal, the startup will shut down both Bud and Orchids by July 18, requiring users to migrate their projects by then.

Earlier this year, citing a security researcher, the BBC reported that apps created on Orchids were susceptible to cyberattacks.

Figma didn’t specify how it aims to use this team, but recent product launches hint that the public company wants to give teams more tools for building and prototyping apps, not just ideating over static concepts. Last year, it released Figma Make for creating web apps. This year, it integrated with tools like Codex and Claude Code, and rolled out its own agents.

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SummaryFigma is evolving from a design tool to a comprehensive AI-driven product-creation platform, positioning itself beyond traditional design software.AI integration is a double-edged sword: while it threatens seat-based models, Figma's platform-centric approach and AI credits could drive new monetization and user expansion.Q1 2026 results show 46% revenue growth, 139% net dollar retention, and 27% free cash flow margin, supporting a 5.7x forward EV/revenue valuation.With early AI monetization, strong customer expansion, and a misunderstood platform story, FIG offers attractive risk/reward and potential for significant re-rating. Getty Images

Investment Thesis To me, Figma (FIG) is being looked at too narrowly. The market is still mostly treating it like a design-software company, but I do not think that is the full story anymore. Figma started as a

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Few stocks have fallen as far, as fast, as Figma (NYSE:FIG). After a blockbuster debut, the design software platform has retraced almost everything. The question now is whether the selloff has gone too far. Our model says yes.

Our 24/7 Wall St. price target for Figma is $36.78 over the next 12 months, implying meaningful upside from current levels. The recommendation is buy, with medium confidence. The setup combines a battered share price, 46.1% revenue growth, and a sentiment composite that has turned constructive despite rough headlines.

24/7 Wall St. Price Target Summary Metric Value Current Price $17.63 24/7 Wall St. Price Target $36.78 Upside 108.68% Recommendation BUY Confidence Level 62% From $143 IPO Pop to $18: How We Got Here Figma is down 50.12% year to date and 83.86% from its post-IPO peak, with the stock sliding another 17.92% over the past month. Shares sit near the $16.60 52-week low and roughly $142.92 below the high. A June 14 Benzinga piece framed the move as driven by AI disruption fears.

Q1 told a different story: revenue grew 46% year over year to $303.78 million, paid subscribers expanded, and management guided positively. A $226.56 million GAAP net loss from stock-based compensation kept bears engaged.

Insider selling from CEO Dylan Field, the CFO, and the CTO totaling roughly $14.5 million were disclosed under pre-arranged Rule 10b5-1 plans, softening the signal while leaving sentiment intact.

The Case for $50+ Bulls have a real argument. Figma owns a category. Designers, product managers, and engineers collaborate on it daily, and the platform has emerged as core infrastructure inside enterprises.

JPMorgan, Royal Bank of Canada, and Piper Sandler have flagged a significant rebound driven by Figma’s essential role in design, a strong cash position, and the potential to convert AI from threat to tailwind via generative design tooling. Analysts expect Figma to achieve profitability in 2026. If revenue compounds north of 40% and operating leverage shows up, the stock revisits the $50 to $60 zone within our 12-month window.

The Risks Worth Watching The bear case starts with AI. If foundation-model providers commoditize design generation, Figma’s pricing power erodes. The TTM operating margin of -41.2% and EPS of -4.07 leave little room for a multiple rerating if growth slows. Stifel and Piper Sandler have trimmed targets, citing AI uncertainty and valuation concerns, and Findell Capital Management has pushed for governance changes.

RBC’s Rishi Jaluria holds a Hold rating with a $28 target, a reasonable downside scenario if growth decelerates toward 30%. Bulls counter that Figma’s losses reflect deliberate reinvestment with intact unit economics, and gross margins remain best-in-class.

Figma Price Prediction 2026-2030 The 24/7 Wall St. price target is $36.78, the recommendation is buy, and confidence is medium. The factor tipping the scale is the gap between a fundamentally healthy growth business and a stock price that already discounts severe AI disruption.

I’d be a buyer if Q2 delivers another 40%+ revenue quarter with progress toward GAAP profitability. I’d stay on the sidelines if growth slips below 30% or insider selling broadens beyond pre-arranged plans.

Here is where our model projects Figma could trade in the coming years, assuming current growth trajectories and market conditions hold.

Year 24/7 Wall St. Price Target 2026 $36.78 2027 $44 2028 $52 2029 $60 2030 $68 These projections assume Figma continues executing on its current strategy and converts AI into a product tailwind rather than a competitive threat. Significant upside or downside could result from a faster path to profitability or accelerated commoditization of design software.

NEW YORK, June 24, 2026 (GLOBE NEWSWIRE) -- StoneX Financial Inc. (“StoneX”; NASDAQ: SNEX) today announced the launch of its Financial Institutions Group (FIG) research practice within The Benchmark Company, a subsidiary of StoneX, expanding the firm’s equity research capabilities to regional and community banks.

The establishment of the FIG research practice represents a strategic expansion of Benchmark’s existing research coverage further into the Financials sector, building on Benchmark’s established institutional franchise and reflects a continued focus on capital markets capabilities, particularly across equity capital markets (ECM), research, and distribution.

The new practice additionally strengthens StoneX’s longstanding relationships across the regional and community banking ecosystem.

“This is a natural extension of our institutional offering and our commitment to delivering high-quality, differentiated research to our clients,” said Rich Messina, CEO of Benchmark, a StoneX company. “By expanding our coverage within financial institutions, we are enhancing our ability to connect investors with actionable insights while strengthening our engagement with an important segment of the market.”

This growth is designed to complement StoneX’s existing relationships across the institutional financial landscape.

“Regional and community banks are one of the most important and underserved segments in the market, and we already work alongside them every day across fixed income, payments, and hedging," said Rob LaForte, Global Head of Fixed Income Sales and FIG at StoneX. "Adding dedicated equity research deepens what we can bring to these institutions and the investors who follow them. It's another way we show up for this segment as one firm, across the StoneX ecosystem.”

Supporting the FIG Practice with Dedicated Sector Expertise

The FIG Research practice is supported by a dedicated team spanning research, specialized sales and trading, bringing deep experience across financial institutions, equity research, and market execution.

Brett Rabatin, Head of FIG Research, will be leading the practice and brings over 25 years of experience covering regional and community banks across the sell-side, including prior leadership roles in financial institutions research.Andrew Liesch and Kenneth James join as Senior Research Analysts focused on regional and community bank coverage. Andrew joins with almost 20 years of industry experience while Kenneth’s tenure in industry, when combined with over a decade on the sell-side, provides a unique perspective to our client base. Both will be contributing deep sector expertise and longstanding industry relationships.Kyle Gierman joins as an Equity Research Associate supporting the team’s analytical and coverage efforts. The team is complemented by dedicated distribution and execution capabilities:

Bob Hughes joins in a specialized sales role, utilizing over 25 years of experience focused on connecting FIG research and insights with targeted institutional investors.Bob Hurley strengthens the trading function, bringing decades of experience and relationships in bank stocks and equity sales trading. Together, the team has long standing experience with research, idea generation, and execution, supporting both investor engagement and client outcomes.

About The Benchmark Company
The Benchmark Company, a subsidiary of StoneX Group Inc. (Nasdaq: SNEX), is an institutionally focused, research driven, sales trading and investment banking firm. Founded in 1988 and headquartered in New York City, Benchmark is dedicated to fostering the long-term success of corporate clients through raising capital, providing strategic advisory services, generating insightful research and developing institutional sponsorship by leveraging the firm’s sales, trading and equity research capabilities.

About StoneX Group Inc.
StoneX Group Inc., through its subsidiaries, operates a global financial services network that connects companies, organizations, traders, and investors to the global market ecosystem through a unique blend of digital platforms, end-to-end clearing and execution services, high-touch service, and deep expertise. The company strives to be its clients' trusted partner, providing its network, products, and services to help them pursue business opportunities, manage market risks, make informed investment decisions, and improve their business performance.

A Fortune 50 company headquartered in New York City and listed on the Nasdaq Global Select Market (NASDAQ: SNEX), StoneX Group Inc. and its more than 5,400+ employees serve over 80,000+ commercial, institutional, and payments clients, as well as more than 260,000 retail accounts, across more than 80 offices on six continents. Further information is available at www.stonex.com.

Media Contact
Dana S. Grosser
Global Head of Corporate Communications
[email protected]
(646) 984-1967

SNEX-G

Figma (FIG +3.62%) was one of the hottest IPO stocks of 2025 after Adobe had agreed to acquire the company for $20 billion, but abandoned the deal amid regulatory scrutiny in late 2023. Investors who had jumped into Figma stock looking for a big score have gotten nightmarish returns instead.

Shares of Figma have continued to grind lower since the company's IPO, and now sit 84% below their short-lived peak. Figma is far from the first IPO stock to burst onto the scene only to go up in flames. But before giving up on this IPO stock, consider the company's recent performance and what it could mean for the stock's future.

Image source: The Motley Fool.

First, a look at why the stock dropped like a rock A high-profile IPO stock is going to carry a steep valuation almost every single time. The goal of an IPO is to raise as much money for the business as possible, whereas an investor wants to get as much value as possible for the money they put into a stock.

Figma is an innovative software platform for designing digital interfaces, such as websites, apps, and content. The botched Adobe deal only drew more attention to Figma, which traded at 60 times sales after going public.

But high valuations can easily collapse at the first sign of trouble. Many hot IPO stocks cool off once the hype quiets down. That downfall can begin with a poor earnings report or some other catalyst. In Figma's case, the rapid improvement of artificial intelligence, such as LLMs (large language models) like Claude, sparked a bear market among almost all software stocks. Investors feared that AI would threaten, if not replace, most software products.

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Figma is showing that AI isn't the existential threat some may believe it is The company grew sales by 46% year over year in the first quarter of 2026 to $333.4 million, accelerating from a 40% growth rate in the prior quarter. Figma's net revenue retention rate increased by 3% to 139%, its highest in two years. That means that Figma's users are spending more as they use the product more.

In other words, Figma is thriving as companies lean into AI tools, not faltering. Figma is very AI-forward, with various tools, features, and integrations that bring AI into a user's workflow. Companies are scrambling to introduce and implement AI right now, so Figma's strong operating results at this moment speak volumes about how well users are taking to its product.

As long as this momentum continues, Figma's future appears bright. Now, about that stock. Figma's valuation has fallen from 60 times sales to just over 8 times sales. It's probably safe to say that the hot air is out of the metaphorical IPO balloon, paving the way for investment returns as the business continues to grow. That could make for a compelling comeback story.

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe and Figma. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.

Figma Inc (NYSE:FIG) is up 4% in premarket trading at $18.70, after Citigroup initiated coverage with a "buy" rating and $36 price target. The brokerage cited software sector strength, and upside potential after the stock's underperformance. 

Should these gains hold, FIG will snap an 11-day losing streak. Publicly traded since July 2025, the stock yesterday was flirting with its April 30 record-low of $16.62. Since the start of the year, the equity is down 51.9%. 

Most analysts are still skeptical. Coming into today, 10 of the 13 analysts in coverage carry a "hold" rating, compared to just three "strong buy" recommendations. This leaves plenty of room for additional upgrades. 

Nearly 70 million shares are sold short, representing 16% of FIG's available float. At the stock's average pace of daily trading, it would take almost four days for these bearish bets to be covered.

Key Takeaways Figma shifted AI features to usage-based credits, making higher AI consumption a revenue opportunity.FIG says more than 75% of users exceeding AI limits kept buying credits, with over 95% staying active.Figma links AI credit add-ons to larger teams and higher recurring revenues while expanding AI workflows. Figma (FIG - Free Report) has enforced AI credit limits at the beginning of 2026, transforming AI usage from a cost center into a revenue opportunity. Early enterprise adoption of additional credits, high post-enforcement retention, larger spending by AI credit purchasers, and management's expectation that growing AI usage now directly translates into revenues.

While AI capabilities were previously bundled within subscriptions, the company has now transitioned toward a usage-based monetization model through AI credit add-ons and pay-as-you-go billing, allowing increased AI consumption to generate incremental revenues. The early traction from AI credit monetization has helped Figma move into its first commercial phase of AI monetization.

More than 75% of Organization and Enterprise users who had previously exceeded their AI credit limits continued purchasing and using AI credits after enforcement, while over 95% of those users remained active on the platform. Furthermore, the AI-monetization opportunity extends beyond direct credit purchases.

Pro teams purchasing AI credit add-ons have more seats per team and generate average annual recurring revenues more than three times higher than teams without add-ons, suggesting AI adoption is associated with deeper platform expansion.

Figma’s AI-native creative workflows, including Figma’s AI assistant embedded within the design canvas, are expected to consume AI credits in the future, broadening the monetization surface.

How Competitors Fare Against FigmaFigma operates in a crowded design and product workflow market with established incumbents and newer AI-native tools, including AI coding tools, AI design tools, AI website builders and AI product-development platforms.

Figma faces constant competitive challenges from established players, including Adobe (ADBE - Free Report) and Atlassian (TEAM - Free Report) . 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. Maintaining product leadership in this marketplace requires sustained investment and higher operating costs. Adobe recently partnered with Google Cloud to enhance Adobe’s creative ecosystem with AI.

Figma’s Share Price Performance, Valuation and EstimatesFigma shares have lost 50.4% year to date. The Zacks Internet - Software industry has declined 14.4% in the same period.

Figma YTD Performance Chart
Image Source: Zacks Investment Research

Figma stock is trading at a premium, with a forward 12-month Price/Sales of 5.30X compared with the industry’s 3.65X. FIG has a Value Score of F.

Figma Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research

The consensus mark for 2026 earnings is pegged at 28 cents per share, which has increased 17.3% over the past 30 days. This indicates a 6.7% decline from the reported figure of 2025.

Image Source: Zacks Investment Research

Figma currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Figma rose about 9% in premarket trading on Friday after the design software company raised its annual revenue forecast, signaling that growing adoption of its artificial intelligence tools is helping drive customer expansion and higher spending across its platform.

The company said it now expects fiscal 2026 revenue between $1.42 billion and $1.43 billion, up from its earlier forecast of $1.36 billion to $1.37 billion.

The stronger outlook came after Figma reported first-quarter revenue of $333.4 million for the period ended March 31, ahead of analyst estimates of $313.2 million, according to data compiled by LSEG.

Figma has increasingly integrated AI features across its browser-based design platform, which is widely used by customers ranging from freelancers to large Fortune 500 companies.

The company’s software allows users to move from early-stage sketches and prototypes to coding and publishing products within a single platform.

Figma has been betting that AI can simplify those workflows further and expand adoption among corporate customers.

Executives said customer engagement with the company’s AI products remained strong even after Figma introduced usage-based credit limits earlier this year.

Over 75% of “Org” and “Enterprise” users who exceeded their AI credit limits continued purchasing additional AI credits in April, the company said.

Figma began enforcing those credit limits in March and introduced paid add-ons for customers who exceeded the AI usage included in their plans, part of a broader push to monetize demand for AI-powered features.

“As AI gets better, Figma is accelerating and customer usage and workflows on our platform are deepening. Our platform and AI products drove faster growth for both new customer acquisition and expansion within existing accounts,” Chief Financial Officer Praveer Melwani said in the earnings statement.

The company also forecast second-quarter revenue between $348 million and $350 million, above analysts’ expectations of $327 million.

Competition concerns remainDespite the upbeat results, investors and analysts continue to watch closely for signs that rapidly evolving AI technology could disrupt traditional software platforms.

The rise of so-called agentic AI tools has intensified concerns across the technology industry that advanced models may eventually handle more design and development tasks without relying on conventional software workflows.

Last month, Anthropic unveiled Claude Design, a tool that allows users to generate designs, interactive prototypes and presentations using AI prompts.

“When you talk about a Claude design...you can't dismiss them, their ability to train first-party models and couple those with their own products is something that we definitely are paying attention to,” Melwani told Reuters.

Still, Figma executives argued that AI is currently acting more as a growth catalyst than a threat, helping the company attract more customers and deepen usage across existing accounts.

Analysts remain cautiously optimistic on the stock.

Piper Sandler lowered its price target on Figma to $30 from $35, though broader Wall Street sentiment remains constructive.

According to estimates from seven analysts, Figma’s average price target has fallen to $35.14 from $37.43, with forecasts ranging from $25 to $44 per share.

Based on the stock’s May 14 closing price, the revised average target still implies roughly 74% upside potential.

Consensus ratings compiled across 13 analysts continue to stand at “Buy,” with four Buy ratings, nine Holds, and no Sell recommendations.

© Ground Picture / Shutterstock.com

Morgan Stanley lowered its price target on Figma (NYSE:FIG) to $38 from $44, maintaining an Equal Weight rating following the design software maker’s first-quarter results. The price target cut arrives despite a second straight quarter of accelerating revenue growth to 46% year over year, highlighting an unusual tension in the analyst community.

Piper Sandler analyst Billy Fitzsimmons also trimmed his target to $30 from $35 while keeping an Overweight rating. For investors in Figma stock, the message is nuanced: growth is excellent, yet the AI competition debate is compressing the multiple Wall Street will pay for it.

Ticker Company Firm Action Old Rating New Rating Old Target New Target FIG Figma Morgan Stanley Price Target Cut Equal Weight Equal Weight $44 $38 FIG Figma Piper Sandler Price Target Cut Overweight Overweight $35 $30 The Analyst’s Case Morgan Stanley credited the accelerating top line to seat expansion, paid customer conversion, and new credit monetization. The firm noted that while investor debates on competition and gross margins persist, the Q1 2026 results “provide a strong case for Figma’s positioning in AI.”

Piper Sandler’s data points were similarly strong: Figma’s 6% revenue beat, net dollar retention of 139%, and a Q2 revenue growth guidance midpoint of 40% year over year, a sizable nine points ahead of consensus. Management also raised the FY26 revenue growth midpoint to 35% year over year.

Company Snapshot Figma operates a collaborative design platform used by product teams across enterprises. The company carries a market capitalization of roughly $9.98 billion and generated trailing revenue of $1.06 billion, with gross margins around 85%.

FIG shares last traded at $23, well below the 52-week high of $142.92. The consensus analyst target sits at $40.25, with ratings skewing toward Hold.

Why the Move Matters Now The valuation reset reflects a structural concern about category disruption rather than any execution miss in the quarter. So-called “vibe coding” platforms and AI-generated user interface tools are increasingly capable of producing design assets without traditional workflows. That has investors questioning whether the design tool category itself faces disruption.

Figma’s defense is its enterprise footprint and AI feature velocity, evidenced by that 139% net dollar retention figure. Even so, Figma stock trades at a price-to-sales ratio of 9x, leaving little room for multiple compression if growth ever slows.

What It Means for Your Portfolio For prudent investors, the analyst downgrade signals less about Figma’s near-term fundamentals and more about the AI overhang on the entire design software category. A 46% growth rate at this scale remains rare, and management’s raised full-year outlook suggests momentum is durable.

Yet the bear case deserves weight. If AI-native tools commoditize design output, even exceptional results may not drive multiple expansion. Position sizing should reflect that asymmetric risk while leaving room to participate if the AI competition fear proves overstated.

Figma, Inc. delivered strong Q1 results, with 46% YoY revenue growth and notable customer expansion, but FIG valuation remains demanding. Operational advances, AI monetization, and high net dollar retention (139%) support the bullish thesis, yet margin compression raises caution. Stock-based compensation and a negative GAAP operating margin (-41%) present ongoing FIG shareholder dilution and profitability concerns.

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When Anthropic released Claude Design in April, one assumption spread quickly through design and tech circles: a prompt-to-interface tool would make interface design platform Figma redundant. Product teams would describe what they wanted and skip the canvas entirely.

Figma’s Q1 2026 results said otherwise.

Figma beat revenue expectations and raised its full-year outlook, Quartz reported on Friday (May 15). The signal underneath the numbers mattered more than the results themselves: Enterprise teams are not leaving Figma because just they have a faster way to generate a screen.

What Claude Design Actually Threatens Claude Design generates websites, landing pages and interfaces from natural language prompts, PYMNTS reported. No prior design experience is required. The tool does not augment an existing workflow. It replaces the starting point entirely.

That is a genuine shift for certain users. Solo builders, early-stage startups and non-designers who need something functional fast no longer need a designer to get there. The threat is real. It just does not describe most of what Figma’s customers actually do.

Large product organizations do not primarily use Figma to generate screens. They use it to maintain shared design systems, manage version control and manage collaborations across distributed teams. Developer handoff, prototyping and governance sit on top of that. A prompt-to-interface tool solves one upstream problem in a workflow with a dozen others downstream.

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Why Enterprise Teams Are Staying The clearest evidence came not from revenue but from behavior. After Figma began enforcing artificial intelligence (AI) usage limits in March, the vast majority of enterprise customers who hit their cap chose to buy more credits. They did not leave, Fast Company found. Teams inside Figma’s collaboration and handoff infrastructure did not treat a generative AI alternative as a viable exit.

CFO Praveer Melwani said the quarter was driven by seat expansion across entire organizations, not just individual power users. Figma is becoming more entrenched inside product teams, even as generative tools multiply around it. CEO Dylan Field put the thesis plainly: when code is a commodity, design judgment is the competitive edge.

What the Broader Industry Is Actually Sorting Out Figma’s quarter does not settle the competitive picture. It clarifies where the battle is actually being fought.

Adobe is facing the same structural question from a different position. Adobe Firefly is embedded across Photoshop, Illustrator and Premiere, assisting designers already inside those tools. It assumes a trained designer is in the loop. Claude Design does not. The pressure Adobe faces is not that its tools are being replaced. It is that the population of people who need professional design tools may stop growing if generative AI tools absorb the entry-level use cases first.

Google Stitch is pushing from another angle. It launched with Claude Code integration already built in, targeting developers who want to move directly from code to interface without switching contexts. Microsoft embedded AI design into Designer and has integrated Claude into PowerPoint. The design workflow is being approached from every adjacent layer simultaneously.

What Figma’s earnings results suggest is that the collaboration and governance layer—the part that sits across entire product organizations rather than inside a single creator’s session—is proving more durable than the generation layer. Generating a screen is getting cheaper and faster across every tool. Coordinating what happens to that screen across a product team of thirty people is still Figma’s problem to solve.

Shares of Figma (FIG 3.59%) jumped last Friday (May 15) after the collaborative design platform company reported that its first-quarter revenue surged. However, the stock is still down more than 35% on the year, as the company has been dragged down by the software-as-a-service (SaaS) sell-off.

Let's dig into the company's results and prospects to see if now is a good time to buy the stock.

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Strong revenue growth continues It's hard to fault Figma for its struggling stock price following its initial public offering (IPO) last year, as operationally the company has been hitting it out of the park. This continued in the first quarter, as the company's revenue growth accelerated, rising 46% to $333.4 million, up from the 40% growth it saw in Q4 and 38% growth in Q3. Adjusted earnings per share (EPS) rose from $0.03 to $0.10.

The growth was driven by both seat expansion and the continued adoption of the company's artificial intelligence (AI) products. Meanwhile, the company began enforcing AI credit limits on all seats in mid-March. It said the change has been positive, with 95% of users who were over the limits still active on the platform and 75% continuing to use credits, with many purchasing additional ones.

Figma continues to see growth from both new and existing customers. Its number of paid customers climbed 54% year over year to 690,000. Meanwhile, its net revenue retention (NRR) rate for customers with more than $10,000 in annual recurring revenue came in at an impressive 139%, its highest level in two years. This metric measures how much additional money, after any churn, existing customers of one year or longer spend.

Figma upped its full-year revenue forecast, predicting that its 2026 revenue would come in between $1.422 billion and $1.428 billion, representing about 35% year-over-year growth at the midpoint of its guidance. That's up from a prior outlook of between $1.366 billion and $1.374 billion. For Q2, it is looking for revenue between $348 million and $350 million, representing 40% year-over-year growth at the midpoint.

Image source: The Motley Fool.

Figma turned in an exceptional quarter of strong revenue growth. And while there remains a narrative that it will be an AI loser, it continues to demonstrate that AI is driving growth.

With its sell-off this year, the stock now trades at a forward price-to-sales (P/S) ratio of around 8.5 times 2026 analyst estimates and 7.2 times the 2027 consensus. That's attractive for a growth stock increasing its revenue at a 35%-plus clip. As such, I think investors can add shares of the stock at these levels.

The headlines belong to AI and semiconductors right now. Chips are soaring, data center buildout stocks are making new highs, and the momentum crowd is firmly in control. But underneath the surface of a market that looks healthy, something odd is happening. The new-low list has been outrunning the new-high list even as the S&P 500 pushes above 7,500. That's not a healthy market. That's a narrow one.

Jeff Clark of TradeSmith has seen this setup before. His read: when gains concentrate in a thin slice of the market, the rotation trade is coming. And when it does, the money that rushes out of the hot names has to land somewhere. He thinks it lands in stocks that have already been left behind—and he has three specific names in mind.

Get KTOS alerts:

The Setup: When Enthusiasm Gets Discounted to InfinityThe bull case for AI stocks isn't fiction. Real money is flowing into data centers, chips, and infrastructure. The question Clark is asking is a different one: for how long? Once a data center is built, you don't build another one next door. Memory chips are a cyclical commodity—yet the market has priced them as if the cycle has been suspended permanently. Clark's view is that the market is extrapolating today's spending to infinity, and that a correction is overdue. That doesn't mean the AI trade is over. It means the easy money in the hot names may already be made, and the opportunity is now sitting in the stocks no one is talking about.

Figma: A Software Survivor Priced Like a CasualtyFigma Today

$18.80 -0.99 (-4.99%)

As of 11:01 AM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$16.60▼

$142.92Price Target$38.63

Figma NYSE: FIG went public at $33 a share, shot to more than $140, and has since retraced nearly all of those gains—spending time near $20 before a recent earnings pop pushed it back above $22. The surface-level read is that software is under pressure from AI, and Figma is getting caught in that tide. Clark's read is almost the opposite.

Figma isn't being destroyed by AI. It's integrating it. The platform, used by designers and product teams to build digital products and prototypes, has leaned into AI tooling rather than ignoring it, and the results are showing up in the numbers. The company's user base is growing more than 50% year-over-year, and its most recent earnings report came in at 10 cents per share against an expected loss of 17 cents. Net dollar retention has climbed to 139%, meaning existing customers are spending more. Revenue growth is accelerating, not slowing.

For Clark, the thesis is simple: the stock was never worth $140, but it was also never worth being abandoned. Near $20, it's pricing in too much fear and not enough of what the business is actually doing. His target entry is around that level, and he sees it as a name worth holding for the long run.

Kratos Defense: A Drone Pure-Play That Got Ahead of ItselfKratos Defense & Security Solutions Today

KTOS

Kratos Defense & Security Solutions

$55.27 +0.45 (+0.83%)

As of 11:01 AM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$39.00▼

$134.00P/E Ratio326.82

Price Target$96.28

The defense budget expansion story is real, and Kratos Defense & Security Solutions NASDAQ: KTOS sits right at the center of it. The company's unmanned aerial systems—jet-powered drones, hypersonic vehicles, and related defense technology—have the Department of Defense as their primary customer, and that customer is spending aggressively. Kratos reported 22.6% revenue growth in its most recent quarter, with a record backlog and raised full-year guidance.

But the stock ran from roughly $35 a year ago to $120 at its peak, and then gave most of it back. It's trading near $53 today, which Clark acknowledges is not cheap on traditional metrics. This is not a value stock in the Graham-and-Dodd sense. What it is, he argues, is a growth stock with earnings expanding north of 45% annually, trading at a steep discount to where market enthusiasm put it just a few months ago.

Clark's preferred entry is closer to $45 to $50. The defense sector as a whole has pulled back from early-2026 highs as investors wait for the spending surge to show up more aggressively in earnings. Clark sees that patience as the setup. Drone technology spending isn't going away, and the pullback creates a better entry than anything available when KTOS was making headlines at the top.

SoundHound AI: Round-Trip Ticket, Better DestinationSoundHound AI Today

$6.66 -0.09 (-1.35%)

As of 11:01 AM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$5.83▼

$22.17Price Target$14.93

SoundHound AI NASDAQ: SOUN has put investors through a full round trip. A year ago, the stock was trading near $8, ran all the way to the low $20s on AI enthusiasm, and has since come back down to roughly $8. Anyone who bought near the top knows exactly how painful that ride has been.

But Clark's focus isn't on where the stock has been; it's on whether this entry price makes sense relative to what the company is building.

SoundHound's technology is the conversational AI voice layer embedded in cars, restaurant kiosks, and consumer devices—the software that responds when a driver asks for the nearest gas station or a customer places a voice order. The company is not yet profitable. What it is, Clark says, is doing the right things operationally: growing revenue, expanding into new verticals, and positioning itself as the leading pure-play on voice AI at a price point that reflects none of that potential. At $8, the stock is trading where it was before the original wave of AI enthusiasm, and the business is meaningfully larger now than it was then.

The risk is real, as profitability is still quarters away at minimum, and the stock has shown it can be volatile in both directions. But for investors who believe voice AI will become embedded infrastructure, Clark's argument is that the round trip back to $8 is exactly the kind of entry point that "buy low, sell high" was invented for.

The Bigger PictureThe three names share a common thread: each ran hard on genuine enthusiasm, pulled back further than the fundamentals justify, and now sits in the uncomfortable zone where patience is required. That discomfort is the point. The stocks generating today's headlines are priced for perfection. These aren't—and for investors willing to wait for the rotation Clark sees coming, that gap may be exactly where the opportunity lives.

Should You Invest $1,000 in Kratos Defense & Security Solutions Right Now?Before you consider Kratos Defense & Security Solutions, you'll want to hear this.

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Figma has defied AI disruption fears, posting 46% YoY revenue growth and accelerating net dollar retention to 139%. Consensus estimates appear too conservative; I expect further upside as FIG transitions to a usage-based model and leverages AI tailwinds. FIG maintains a bulletproof balance sheet with $1.6 billion in cash and no debt, supporting continued investment and margin expansion.

Investment firm Goldman Sachs recently cut the price target on Figma (FIG 3.59%) to $30 per share, down from $35. In a sense, this should not come as a surprise, as the stock declined soon after its initial public offering (IPO) in July of last year and has traded in a range since March.

Nonetheless, investors should also remember that the software-as-a-service (SaaS) stock has fallen 80% since topping $120 shortly after the company went public. Instead of signaling further pain, history shows such actions sometimes signify a bottom following a sustained decline. That may be the case with Figma stock, signifying a buying opportunity that could become lucrative for investors.

Image source: Getty Images.

Putting the Figma price target cuts into perspective Figma has stood out for creating a design tool for interactive website and app design. It successfully combined artificial intelligence (AI) and human interaction into this process, making it so valuable that Adobe once attempted to buy the company.

That momentum helped make its IPO initially successful, though as mentioned before, the stock has sold off amid its high valuation and fears of competition from AI. That downtrend could have played a role in a series of price target cuts by Goldman Sachs, which originally set a $48-per-share price target on the stock during last summer's IPO.

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As strange as it may sound, this could signal beaten-down Figma stock has become a buy. Goldman Sachs target represents potential upside of more than 25%.

Additionally, price target cuts for Apple in 2019 and Netflix in 2022 preceded rapidly rising stock prices in the months after the stocks experienced significant declines. In Apple's case, the rapid growth of its services business and optimism regarding 5G helped rescue the stock after price target cuts based on weakening device sales. With Netflix (which also included downgrades), a valuation below 20 times earnings eased investor worries after subscriber numbers fell.

Figma's current conditions show parallels to both of those stocks. In the first quarter of 2026, the 46% year-over-year increase in revenue implies growth is not currently a challenge. While it is not yet profitable, it also reported free cash flow of $89 million for the quarter.

Furthermore, Figma now trades at a price-to-sales (P/S) ratio of around 10. This is down from its 66 sales multiple just after its IPO and is closer to the P/S ratios of other rapidly growing companies. Thus, instead of selling, now might be a time to take another look at Figma stock.

Investing in Figma stock after the price target cut Ultimately, Figma appears to have experienced a "bullish price target cut."

Admittedly, bulls do not like to witness falling price targets, and negative sentiment tends to beget more selling.

However, its current price target would still amount to significant growth, and downgrades aren't always followed by falling stock prices. In my view, the historical indicators imply that the sell-off in Figma stock could soon come to an end.

Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe, Apple, Figma, Goldman Sachs Group, and Netflix. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.

Shares of Figma (FIG 3.59%), the design software stock, were soaring last month as shares jumped on a strong earnings report and rode a broader recovery in the software sector.

Figma went public last July and jumped out of the gate before falling sharply from its peak. Eventually, the stock sank below its IPO price of $33, and it remains there today.

At first, Figma was dogged by concerns about its valuation, and later it became one of the software stocks that investors believed to be primed for AI disruption, especially after Anthropic launched its own competing design product, Claude Design.

Nonetheless, Figma has delivered strong results since it went public, and that was part of the reason that it finished last month up 44%, according to data from S&P Global Market Intelligence.

As you can see from the chart below, it wasn't a straight line up for Figma last month, but it was able to rack up some strong gains, especially after its earnings report in the middle of the month.

FIG data by YCharts

What happened with Figma Figma jumped 13% on May 15 after its first-quarter earnings report came out, following a rally the day before heading into the report.

Figma posted 46% revenue growth to $333.4 million, well ahead of estimates at $316 million, and accelerating from 40% growth in the previous quarter. Its net dollar retention rate reached 139%, showing existing customers over the last four quarters increased their spending by 39%, its fastest pace in two years.

New AI products like Figma Make and Figma Weave are helping to drive growth, and it's seeing strong conversion from free to paid users and to their paid tier.

On the bottom line, adjusted operating income improved from $40 million to $52.1 million, and adjusted earnings per share came in at $0.10, which beat estimates at $0.06.

After giving up some of those gains in the following week, it closed out the month strong, rising with other software stocks, and as activist investor Findell Capital Management complimented the company but also suggested changes.

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What's next for Figma Looking ahead, Figma raised its full-year revenue guidance to $1.422 billion-$1.428 billion, implying 35% year-over-year revenue growth, up $55 million from its previous range. It also called for adjusted operating income of $125 million-$135 million.

If Figma can execute on those goals, the stock looks like a good candidate to keep moving higher.

SAN FRANCISCO--(BUSINESS WIRE)--Figma, Inc. (NYSE: FIG), a leading design and product development platform, today announced it will host an Investor and Analyst Session at Config 2026 on Wednesday, June 24, 2026 at 2:00 p.m. Pacific Time, in San Francisco, California. Config is Figma's annual user conference, bringing together over ten thousand designers, developers, and product builders shaping the future of design and product building. A live webcast of the session will be available on Figma's.