Is Figma Stock a Buy Now?

Key Points

• While recent results were solid, investors may have disliked the latest guidance.

• The design software company's growth can pick up once again in the future.

• That's thanks to a large addressable market and its huge customer base.

• 10 stocks we like better than Figma ›

Shares of Figma (NYSE: FIG) have fallen off a cliff following the company's initial public offering (IPO) just over a month ago. The initial investor enthusiasm about this cloud-based provider of collaborative digital design tools that help customers make websites, apps, and other digital products has faded quickly as its valuation and growth are now being examined closely.

Figma priced its IPO at $33 per share. The stock closed at just over $115 on the first day of trading on July 31, a jump of 3.5-fold. However, things have been going south for Figma investors since then. The stock is down 57% from the highs it achieved following its debut.

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But why has that been the case, and is Figma's big slide a buying opportunity for savvy investors? Let's find out.

Image source: Getty Images.

Investors are concerned about Figma's slowing growth

Figma released its first set of quarterly results on Sept. 3, and investors didn't like what they saw. The company's revenue for the second quarter of 2025 increased by 41% year over year to $250 million. Its non-GAAP (generally accepted accounting principles) net income increased by almost 39% from the year-ago period to $19.8 million. While these are healthy growth rates, investors were spooked by Figma's guidance.

The company is expecting its Q3 revenue to increase by 33% year over year, a step down from the growth it clocked last quarter. Another point worth noting is that Figma's top line has jumped by 43% in the first half of 2025. So, its full-year revenue growth guidance of 37% points toward a slowdown in its growth trajectory in the second half of the year.

For a company trading at a price-to-sales ratio of almost 30 and a forward earnings multiple of 285, the relatively slower rate of growth that Figma is staring at has dented investor confidence in the stock. The fact that Figma remains expensively valued even after its recent pullback makes the stock a risky investment right now, especially considering that holders of 54% of Figma's outstanding shares have entered into an extended lockup agreement with the company.

These shareholders will be eligible to sell their shares in a staggered manner over the next four quarters through June 2026. Figma stock, therefore, could remain under pressure in the coming year if its growth doesn't pick up. And that's where there may be an opportunity for savvy investors to get their hands on a potential long-term winner.

Here's what investors can do right now

Investors will do well to add Figma to their watch lists and keep a close eye on this stock. If Figma continues sliding and becomes available at a cheaper valuation, it would make sense to start accumulating its shares.

That's because the company estimates its total addressable market (TAM) at $33 billion based on the number of users currently involved in software design, per a report by market research firm IDC. Importantly, Figma indicates that its TAM could move north as "advances in AI allow more people to participate in the process of creating digital products and experiences."

The good part is that Figma has been offering artificial intelligence (AI)-powered tools to its users to help them create design templates and translate ideas into prototypes with the help of prompts. This could help Figma cross-sell more of its solutions to a fast-expanding customer base.

In April this year, Figma surveyed 2,500 of its customers and found out that one in three of them are launching products created with the help of AI. That was an increase of 50% from the prior year.

Grand View Research estimates that the adoption of generative AI in content creation could grow at an annual rate of 32.5% through 2030, hitting $80 billion in revenue at the end of the forecast period. So, Figma's end-market opportunity could be much larger in the long run than what the company is estimating.

Importantly, Figma had a total of 450,000 paid customers on March 31 this year. The number of paid customers with more than $10,000 in annual recurring revenue (ARR) stood at just over 11,900 at the end of Q2, an increase of 31% from the year-ago period. Paid customers with an ARR of over $100,000 jumped at a stronger rate of 42%.

Figma has a substantial pool of paid customers and is set to release four more products, which are in the beta phase right now. So, it can win a bigger share of its existing customers' wallets and continue to attract new customers looking to use generative AI to create presentations, websites, content, and code, among other things.

So, if Figma's stock remains under pressure and is available at a significantly cheaper valuation, it may make sense to buy this tech stock, as its growth trajectory could pick up once again thanks to generative AI.

Should you invest $1,000 in Figma right now?

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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.