It may surprise investors to know that Figma (FIG 0.61%) stock is up 13% since its July 31 initial public offering (IPO). However, you would have had to have been an insider to benefit from that. If you had waited a day to buy, you would be down two-thirds on your investment.
The upside to non-shareholders is that anyone can now buy Figma stock for just above its IPO price. The question for investors is whether that signifies a buy signal or if they should continue to stay on the sidelines.
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The state of Figma
Figma offers a collaborative design tool, helping enterprises build user interfaces and experiences efficiently as a group. The platform has attracted interest since well before the company went public.
Amid competition, it continues to build on its competitive advantages. Figma's product is built from the ground up for collaborative purposes, allowing participants to work on the same project in real time. And since everyone has the same view, it prevents redundancies and reduces misunderstandings.
Moreover, it offers a "freemium" model that brings users onto the platform. This makes it easy to draw users to the revenue-producing parts of the platform once they become comfortable in its ecosystem.
Also, like almost every other tech company, Figma integrates artificial intelligence (AI) into its development processes. AI allows users to perform tasks such as automating repetitive tasks and turning designs into interactive prototypes.
Additionally, bootcamps and design schools have increasingly standardized around Figma. That rising familiarity gives the platform a competitive edge.
This approach impressed Adobe so much that it attempted to buy the company for $20 billion. Regulators weren't fond of that idea and persuaded the companies to abandon the merger, and now Adobe is trying to compete directly.
Determining what Figma is worth
Nonetheless, the aforementioned stock price decline since soon after its IPO indicates investors may struggle with valuing the company. The stock price has stabilized since mid-November, and that plateau could persuade some investors that it's time to buy.
NYSE: FIG
Key Data Points
Investors may also see some signs of hope when looking at the financials more closely. In the first nine months of 2025, its revenue of $752 million increased by 41% compared to the same period one year ago. It estimated its addressable market at $33 billion, indicating revenue levels are just scratching the surface of its growth potential.
During the period, the company recognized a one-time stock-based compensation expense of $976 million that came from the IPO earlier this year. Consequently, its net loss in the first three quarters of 2025 was just over $1.023 billion, exceeding the $830 million loss in the same year-ago period. Still, if taking out the one-time expense, the loss is just $47 million, indicating it could turn profitable soon.
Investors should remember that stock-based compensation is a non-cash expense. With that, Figma generated $204 million in free cash flow in the first nine months of the year, meaning it doesn't have to turn to outside fundraising to fund its operations.
Also, the near-profitability means it will likely have a P/E ratio by next year, leading analysts to forecast a forward P/E ratio of 102 for the company.
Indeed, the price-to-sales (P/S) ratio of 19 confirms Figma is not a cheap stock, but given the rapid growth and the leadership in this specific niche, new investors may take an increasing interest in Figma stock.
Is Figma stock a buy?
Under current conditions, it may make sense to start buying Figma stock.
Admittedly, the plateau in the stock price may or may not signify that it is bottoming. Still, investors may want to begin buying Figma in case it's a bottom, and then make more informed decisions about investing the rest of their capital once they have more information.
Ultimately, the aforementioned 41% revenue growth points to the rising popularity of its platform. While the stock is not cheap, the addressable market estimate suggests its growth is just beginning, implying the stock still has plenty of room to run.
