Shares of Figma (FIG 4.63%) were up 13% in February, according to data from S&P Global Market Intelligence. A disruptive design platform for digital applications, Figma stock has begun to recover from its post-IPO downturn, which still numbers 77% in less than a year. The company is growing revenue rapidly by disrupting the collaborative interface design sector, which was previously dominated by Adobe.
Here's why Figma stock shot up in February, and whether it is a buy for your portfolio today.
NYSE: FIG
Key Data Points
Accelerating growth
Users of Figma can collaborate on digital design through a simple, real-time web browser. These innovations in system design have enabled the company to disrupt Adobe's product in this sector, which remains application-based and more difficult to work with across computing hardware types.
This has meant strong user and revenue growth for Figma since going public in 2025. Weekly active users are growing by an astonishing 70% quarter over quarter, indicating the rapid adoption of Figma's products. Revenue is following at a lag, up 40% year over year to $303 million last quarter. The company now has close to 14,000 customers paying more than $10,000 a year, indicating that Figma is gaining wide adoption in the enterprise market.
Some investors fear that Figma is at risk of AI disruption, since it will now only take a few query lines to springboard design ideas. However, this underestimates exactly what goes into the design process as the handoff moves from idea to design to developers, which Figma has mastered. The company has begun adding new features, such as the ability to query a chatbot to generate ideas in Figma, but this is only a piece of the pie. Figma is likely to be a beneficiary, not a loser, of the AI revolution.
Image source: Getty Images.
Is Figma stock a buy?
Even though Figma stock shot up higher last month, it still remains down 77% from its post-IPO high, and now has a market cap of $15 billion.
That does not mean the stock is cheap today. Figma is guiding for about $1.37 billion in revenue for the current fiscal year, which would give the stock a forward price-to-sales ratio (P/S) of 11. That is still objectively expensive, regardless of where the stock used to trade. On this revenue, Figma expects to generate just over $100 million in operating earnings, giving it a pre-tax earnings multiple of 150.
This is not a recipe for strong stock market returns.
