Figma's Meteoric Rise Creates Big Risks For You

Aug. 01, 2025 4:23 AM ETFigma, Inc. (FIG) StockFIG4 Comments

Summary

  • Figma is a high-growth software leader with impressive user traction and a strong product ecosystem, but its IPO surge has pushed valuation to extreme levels.
  • Recent financials show robust revenue growth and improving profitability, yet results are skewed by a one-time Adobe termination fee and limited operating history.
  • Even under bullish growth and margin assumptions, Figma's current trading multiples remain exceptionally high, making it hard to justify the present valuation.
  • While I admire Figma's business and growth prospects, the stock is priced for perfection, so I assign a soft 'sell' rating at these levels.
  • Looking for a helping hand in the market? Members of Crude Value Insights get exclusive ideas and guidance to navigate any climate. Learn More »

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Alistair Berg

Seeing a 10% or 20% increase in share price in the course of a single day is incredibly rare in the market for any particular business. So you can imagine just how rare it is to see a firm skyrocket

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This article was written by

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Daniel is an avid and active professional investor.

He runs Crude Value Insights, a value-oriented newsletter aimed at analyzing the cash flows and assessing the value of companies in the oil and gas space. His primary focus is on finding businesses that are trading at a significant discount to their intrinsic value by employing a combination of Benjamin Graham's investment philosophy and a contrarian approach to the market and the securities therein. Learn more.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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