Figma Stock Plunges 35% in Two Weeks—Time to Buy the Bloodbath?
Design darling Figma's stock just got dragged through the pixel grid—down a brutal 35% since August began. Was this a market overreaction or the start of a deeper nosedive?
The Bear Case: More Than Just a Dip?
Wall Street's design software darling now trades at fire-sale prices. But with SaaS valuations under microscope, is this a temporary glitch or systemic rot?
The Bull Argument: Panic-Selling Fools
Figma still dominates UI/UX tools—and let's be real—Adobe's acquisition attempt proved its strategic value. At these levels, even the suits might spot a bargain.
One thing's certain: the 'buy the dip' crowd just got their chance. Whether they're geniuses or bagholders? That'll depend on how many 'visionary' CEOs actually understand Figma's financials.
Image source: Getty Images.
Reasons to buy Figma Stock now
Whether you engage with,, or, the user interface you interact with was made by Figma. Many design companies that already spend heavily for access to's Creative Cloud ignore a competing application, Adobe XD, and end up paying for Figma too. In fact, 95% of Fortune 500 companies use Figma's software to design and maintain their user interfaces.
Effective interface design isn't limited to developers willing to pay for a full subscription to specialized software. The process pulls in writers, researchers, marketers, and other collaborators. With Figma, nondevelopment collaborators can access projects for one-seventh the price developers with enterprise subscriptions pay.
Figma's in the right place at the right time. Companies across industries are investing heavily in their digital transformations, and the trend is helping Figma grow by leaps and bounds. In 2024, revenue grew 48% to $749 million.
Sales growth decelerated slightly in the first quarter of 2025, but this business is still expanding at a rapid pace. Figma reported first-quarter sales that ROSE 46% year over year to $228.2 million.
At the end of March, Figma had zero debt and a big $1.5 billion cash cushion on its balance sheet. The asset-light software business could become a cash-generating machine for investors. In the first quarter, the company reported free cash FLOW that equaled 41.4% of total revenue during the period.
Reasons to remain cautious
Figma's stock is down from its peak, but it's still trading at a sky-high valuation. Revenue is expanding rapidly, but so is its employee roster. The company reported a $732 million net loss last year.
In the first quarter of 2025, Figma's bottom line entered positive territory. That said, net income worked out to just $0.04 per share. The stock's closing price on Aug. 15 was 496 times annualized first-quarter earnings.
It isn't impossible for a software business to grow into such a steep valuation, but it doesn't happen often. Investors considering this stock now should understand that it could fall much further if it reports another growth deceleration in any of its next several quarterly reports. Unfortunately, Figma expects its revenue growth rate to decline in the future as its business matures.
Figma hasn't set a date yet for reporting results from the second quarter that ended on June 30. If you're considering this stock, it's probably best to wait until after we see at least one or two more quarterly reports so we can gauge just how rapidly growth will decelerate.
