Figma Stock Plummets Over 50% Since July – Is Now the Time to Buy?

Figma's stock just got sliced in half—welcome to the brutal reality of tech valuations.

From peak to pit

Since July, Figma's value has cratered by more than 50%. That kind of drop gets attention—even in a market that’s seen its share of plunges.

Buy the dip or avoid the trap?

Some see blood in the water and smell opportunity. Others see a company that’s lost its momentum—and maybe its narrative.

Tech stocks don’t always bounce back just because they’re cheap. Sometimes they’re cheap for a reason.

Timing a falling knife takes guts—or amnesia. Either way, it’s a classic high-risk, high-reward play. Just ask anyone who’s ever tried to catch a declining stock before it finds a floor—or doesn’t.

So—bargain hunt or stand clear? Your move, investor.

Image source: Getty Images.

What is Figma?

As a company, Figma supports what it describes as a collaborative tool for interface design. While it continues to support that function, the software acts more as an AI-powered and AI-connected ecosystem that helps teams turn ideas into finished products. Figma fosters a process for design and product development that is efficient, collaborative, and keeps all parties informed along the way.

The synergies of Figma's software have drawn the interest of numerous well-known enterprises. Companies such as,, andare Figma clients. Amid such successes, industry analysts and investors had widely anticipated its IPO.

Also,attempted to acquire it in 2022 but abandoned the deal the following year after regulators in the UK and the European Union expressed skepticism. Instead, Adobe and other companies have tried to compete with Figma. According to 6Sense, Figma is the No. 1 company in its industry. Still, with competitors like Adobe better able to invest in artificial intelligence (AI) and other technologies, it is unclear whether Figma will hold that lead over time.

What is more clear is that having Figma as an independent company looks like a win for investors. Even after the recent pullback, Figma's market cap of $27 billion is well above Adobe's proposed acquisition price of $20 billion.

The Figma investment case

Moreover, at first glance, its numbers look impressive. In the first half of 2025, revenue of $478 million increased by 43% compared to the same year-ago period. Also, the net dollar retention rate in Q2 was 129%, showing that existing customers are spending more on the platform.

Additionally, it turned a profit of $22 million in the first half of the year. In comparison, Figma lost $814 million in the first two quarters of 2024 as it spent heavily on operating expenses during that time.

Still, investors tend to punish stocks when growth rates slow, and that seems to be the case with Figma. Revenue grew by 46% yearly in Q1 and 41% in Q2. Also, that trend is on track to continue, with Figma forecasting 33% yearly revenue growth for Q3 and 37% for 2025. Such results likely prompted investors to continue selling the stock.

Unfortunately, Figma's valuation could lead to further selling. Losses in the second half of 2024 have left it without a P/E ratio. Still, its price-to-sales (P/S) ratio of 29 is high by almost any measure, especially given the averagesales multiple of 3.3. With revenue growth slowing and the company likely to return to losses if it ramps up spending on operations, investors may want to stay on the sidelines.

Should I buy Figma stock?

Under current conditions, investors should consider watching rather than buying Figma stock. Admittedly, an industry lead, along with its rapid revenue growth and positive net income, makes it look like a compelling investment case at first glance. Also, the discount of more than 50% from where it traded just a few weeks ago could make investors wonder if they should buy now.

Unfortunately, the falling stock price does little to make Figma more attractive. Investors tend to turn on stocks with falling revenue growth, and in Figma's case, that metric continues to trend downward. That is especially true when valuations are high, likely making Figma's lofty P/S ratio of 29 too difficult to justify for prospective investors.