Figma Stock Skyrocketed 250% Can It Keep the Momentum?

Figma just went public… and the stock shot from $33 to $122 on its first day. Now? It’s already dropped 27%. And everyone’s asking: was that a breakout or a blow-off top?

But here’s what no one’s talking about: they lost $732 million last year… and then somehow posted $44 million in profit Q1. That’s a 231% earnings jump right before the IPO. Coincidence? Maybe. Maybe not.

Let’s dive in.

Figma’s Overview

Figma was founded in 2016 as a cloud-native design and collaboration platform. It enables real-time prototyping, whiteboarding, developer handoff, and now AI-driven tools like Figma Draw, Buzz, Make, and Sites. Today, it’s used by approximately 95% of Fortune 500 companies.

In 2022, Adobe attempted to acquire Figma for $20 billion, but the deal was blocked by regulators in December 2023, resulting in a $1 billion termination fee.

Figma officially went public on July 31 2025, under the ticker FIG, raising around $1.2 billion on its IPO on July 31.

Why It’s in the Spotlight

Investing in IPOs can be very exciting, especially for those of us who are always on the lookout for the next big opportunity. When we invest or buy a stock that just IPO’d, we’re all after the potential reward, right? When you get in early on a company and it takes off, the returns can be incredible. I mean, IPOs also give us the chance to invest in companies that could be on the verge of something big. They’re often in growth mode, they’ve got lots of investor interest, and they’re ready to scale. For long-term investors who can hold through all the ups and downs, early access can be a real edge. I mean, just think of Amazon or Facebook  – if you bought at the beginning, and held the stocks, you’d be rich. 

But, for most, investing in IPO’s is more of a dream than reality because most of us can’t handle the ups and downs these stocks will face. Investors are often after short-term gains, not really interested in holding a stock for 5 or 10 years. 

So, what’s the buzz over Figma? Well, the IPO price was $33.

The stock opened with a bang on its first day at around $85, more than double its IPO price, and closed at almost $122, making a lot of people very, very rich. However, it’s already down by over 27% to $88.60 on August 4, but has had a slight recovery in pre-market trading. Though I have to say, in the few minutes that I was checking pre-market trading, the stock went from $89 to $92 and back to $90. So, the next market open could still go either way. 

But, is the stock’s surge because of its fundamentals and demand, or just hype?

Figma’s Financials

Well, to figure it out, we’ll need to open the hood and look at its revenue, growth, and everything in between.

Now, the company hasn’t yet declared any quarterly financials since it has just recently gone public. So, to understand its background, we look into their S-1 filing. Companies file an S-1 as part of their process of going public. The filing is made with the SEC and provides investors with information about the company’s business, financials, and what exactly is being offered. 

According to Figma’s S1, sales rose 45% year-over-year to $228 million in the first quarter of 2025. The full year 2024 performance was also impressive, increasing 48% from the previous year to $749 million.

In the first quarter of 2025, its net income rose 231.8% to $44.9 million. However, it incurred a net loss of $732.1 million in 2024.

So the question now is: Was Q1 a one-off? Can the company continue turning a profit? Because that’s what matters. To answer that, we need to look at its growth prospects. 

Growth Catalysts

The company’s growth cannot be carried by hype alone. For Figma to thrive, it needs to prove it can translate its widespread adoption into sustainable revenue and, eventually, profitability. So let’s look at how it can achieve long-term financial stability.

The company’s flagship Config 2025 conference unveiled Figma Sites, an AI-powered website builder marking Figma’s move beyond product design into web publishing, opening the gates to a broader market. If it turns out to be a success,  Sites could boost average revenue per user, reduce churn by increasing product stickiness, and attract entirely new customer segments, such as marketers, creators, and small businesses.

Aside from Sites, tools like Buzz, Make, and Draw broaden Figma’s utility beyond designers. Buzz streamlines content creation by allowing teams to generate, edit, and collaborate on written assets directly in Figma. Make helps users quickly generate design variations using AI, which is useful for turning ideas into mockups. While Draw adds freehand illustration capabilities, which brings more creativity and flexibility to the platform.

The combination of these tools positions Figma to evolve from a collaborative design tool into a full-stack digital creation platform. The execution of its entire product system will be the factor that helps determine the company’s long-term success.

And questions about growth come up a lot in my Discord channel: With that, can Figma maintain its growth pace now that it’s operating as a public company?

Let me give you a quick example: Think about the last time you tried switching from Spotify to Apple Music, or from Netflix to Hulu. Even if the competitor has slightly better features, it’s tough to break the habit once you’re locked into an ecosystem. Habit and familiarity often win over incremental improvements. That’s why, even if Adobe or Canva release flashier features, Figma’s built-in workflows and collaboration tools could keep users coming back.

Risks & Red Flags

Now, it may seem like Figma could be the next big thing, but I think adoption is still questionable. 

The fact is, Figma is competing with the industry giants such as Adobe and Canva, which have been dominating. I mean, we use Adobe and Canva here every single day! And they are offering similar products that Figma. Adobe is integrating its Firefly generative AI into apps like Photoshop, Illustrator, and Premiere Pro, which streamlines workflows and allows intelligent editing.

And Canva has launched Visual Suite 2.0, which is a unified creative platform that integrates productivity and creativity. It features AI tools that are geared to streamline content creation and attract non-design professionals to use the app.

So, in order for Figma to really grow, it has to capture user interest and also convert that interest into lasting adoption and monetisation across its product ecosystem.

Valuation Breakdown

So, with all that out of the way, let’s look at the stock based on technical indicators. 

As I said, Figma’s closest competitor is Adobe. Well, there are some Other companies in the same industry, but they’re private, so we can’t compare them.

Going back, Figma’s price-to-earnings cannot be analysed yet since there are no financials filed, because it’s a relatively new company. Its price-to-sales, however, trades lower compared to Adobe, which suggests that investors are probably expecting rapid earnings growth.

Now, Figma stockholders today are speculating that the stock will move higher. Can it? 

Who Should Buy This?

Without any guidance on income or any technical foundation, investors today are just playing with fire. Now, if you know the company, use and believe in their products, you might allocate half or 1% of your portfolio – maybe, if you have a risk allocation. 

But with the company facing very little recognition and competing with industry giants like Adobe and Canva, it is clear that Figma is entering the market at a disadvantage – but that doesn’t mean it doesn’t have a lot of potential to grow. I think Figma has more to gain than to lose from its current position. Investors who believe in its technology can see significant returns, but only if the company executes well and captures the digital creation market.