Figma: Ugly Chart, Good Business

There is a certain type of investment opportunity that looks terrible on the surface, and that is precisely the point. Figma (NYSE: FIG) could be that opportunity right now.

From a post-IPO peak of $115 per share in mid-2025, the stock has lost over 80% of its value, currently hovering around $20 apiece. The risks are visible and the concerns are legitimate. But that is the nature of every compelling entry point. You rarely get a low price and certainty at the same time. Investors who wait for the picture to clear will likely find that the price has already moved.

What Caused The Sell Off?

Figma’s decline isn’t a product failure. The stock was priced for perfection following its IPO, trading at over 55x forward revenue at its peak – a valuation that left no room for error (see current valuation metrics for Figma)

The primary lock-up expired on January 27, 2026, a widely anticipated event that nonetheless released a significant wave of shares and weighed on the stock. A $1 billion reported loss in 2025, driven almost entirely by stock-based compensation rather than cash burn, hurt the narrative further.

The broader SaaS selloff of early 2026, driven by fears that agentic AI would make interface-driven software less relevant, did the rest. Figma was hit harder than most because it sits closest to interface creation, the exact category markets were most worried about. Read more on why Figma stock has fallen.

On the flip side, agentic AI is creating some beneficiaries. Semiconductor players like Marvell stand to benefit from this shift.

How Is The Core Business Faring?

Better than the stock price suggests.

Revenue grew 40% in Q4 2025, hitting $303 million. The company is guiding for $1.37 billion in revenue for 2026, nearly three times Adobe (ADBE) growth rate.

Net Revenue Retention among large enterprise clients stands at 136%. In simple terms, for every dollar a client spent in the previous year, they spent $1.36 this year. The retention story reflects a deliberate platform expansion. Figma has moved beyond design to become the central hub for an entire product’s journey, pulling in engineers, product managers, and developers under one roof. The more of that workflow Figma owns, the harder it becomes to displace.

On AI, Figma is integrating rather than retreating. Figma Make, its AI-assisted UI generation tool, and a new MCP server –  which allows AI agents to access and edit Figma design data without custom integrations – are moving the business toward an AI credit model that might expand revenue per customer rather than replacing existing seats.

Why We Think There Is Value Here

At roughly 6.5x estimated FY’27 sales, Figma is trading at its most attractive valuation since inception. Consensus forecasts call for revenue growth of nearly 30% in 2026 and about 20% in 2027. The broader market has little patience for SaaS right now, and Figma still needs to demonstrate a credible path to profitability. These risks are real, but widely known risks tend to be well-priced ones. For investors with the patience to look past the near-term noise, the current price may prove to be the opportunity.

While Figma may have upside as the lockup-related pressures ease and its AI narrative takes hold, its stock remains highly volatile, and earnings can swing sharply with changes in supply and pricing. When you want to survive market swings to protect wealth and grow your money in the long run, portfolios are the right choice. Trefis High Quality Portfolio can help you stay invested, capture upside, and mitigate the downside associated with any individual stock.