Wall Street released the first wave of ratings for Figma (FIG.US): With a “wait and see” stance, software products are full of power, but the valuation is too high

The Zhitong Finance App learned that Figma (FIG.US), a new force in the global software industry, officially entered the US stock market at the end of July and received the first stock rating and target price coverage from many Wall Street analysts on Monday EST. Due to the high valuation, most analysts gave the company a more cautious rating of neutral (neutral) or perform on a wait-and-see stance, rather than an optimistic “buy” or “outperform the market” rating.

Needless to say, Figma's original AI-embedded design and product development platform impressed Wall Street, but these top analysts refused to give an optimistic bullish rating due to Figma's overvaluation, and they were also relatively cautious about their target stock price within 12 months, which meant that the future stock price increase of the overvalued Figma would be difficult to replicate the explosive rise it had when it first went public. By the close of the US stock market on Monday, under the influence of Wall Street analysts' cautious sentiment about Figma, Figma's stock price had fallen by more than 8%, and at one point the intraday decline was close to 10%.

Figma conducted an initial public offering (IPO) in the US stock market about a month ago, and officially entered the US stock market for public stock trading at the end of July. The issue price was only $33 per share, but investors quickly boosted the company's stock price to over $100 the same day after the stock landed in the US stock market. Since then, the stock price has followed the decline in US stocks against the backdrop of negative impetus from extremely weak non-farm payrolls data and a correction in US stocks due to valuation fears. Since then, it has stabilized relatively. Over the past week, it has hovered around the $70 range for trading.

How sacred is Figma, which was almost bought by Adobe back then?

When Figma officially entered the US stock market, it had been over a year since its merger and acquisition plan with popular creative software developers such as Photoshop and Illustrator, American software giant Adobe was aborted.

Figma is a platform-based software company focusing on cloud-based collaborative design and product development. The core products include Figma Design (interface design and prototyping), FigJam (whiteboard/collaboration), and Dev Mode (covering specifications and handover from design to product development) for engineers. The company was listed on the New York Stock Exchange on July 31, 2025 under the stock code FIG. The core selling point of the Figma software platform is not just a “design tool”, but a collaborative product development platform: the designer is the entry point and then penetrates into the product, engineering, market and operation. According to estimates by major Wall Street brokerage firms, its potential market size for design and various neighboring players is about 26 billion US dollars, highlighting that the penetration rate is still low and the growth runway is long.

From the perspective of business layout and product power, the end-to-end workflow is one of the core strengths of the Figma software platform: complete idea distribution (FigJam), interface design and componentization (Design/Variables/Auto Layout), prototype verification and prototyping (prototyping) on the same platform, to the actual delivery workflow (Dev Mode specification, code snippets, design variables) for large-scale design projects; the other two major advantages are the industry's strongest cross-role collaboration and Figma's exclusive Design and development ecosystem.

Figma embeds AI model assistance in every core part of the software platform. Figma can be described as turning the AI model into a double amplifier of efficiency and product boundaries, but instead of “fully automating” all processes, it speeds up and expands the creative space based on efficient human-computer coordination and collaboration, such as FigJam AI: generating conference templates/flowcharts from natural language, summarizing notes, and helping brainstorm; Dev Mode MCP Server: feeds design semantics to AI code agents to help generate front-end implementation and alignment design specifications .

Furthermore, at the 2025 Config Conference, Figma released major new products such as Sites/Make/Buzz/Draw, deeply embedding generative AI tools into website construction, prototype development, brand material generation and vector creation, and expanding the coverage of software products based on innovative artificial intelligence tools from design to release.

Wall Street giants generally approve of the Figma software platform, but are cautious about stocks due to high valuations

Overall, Wall Street's major investment institutions highly praised Figma's accumulated products and huge customer base, believing that the company's comprehensive product strength is ahead of the entire software SaaS industry, but the extremely high valuation since the listing transaction made them anxious.

According to the RBC Capital Markets (RBC Capital Markets) analysis team, Figma has more than 13 million monthly active users and more than 450,000 paying customers, including 95% of the Fortune 500. Figma also uses artificial intelligence to make the user's design and development experience more convenient.

“Although investors may be concerned that AI applications launched by AI leaders such as OpenAI will simplify application design/development to compete with Figma, we believe AI may become a real tailwind factor for Figma.” RBC analysts led by Rishi Jaluria said in an investor report on Monday.

“We have noticed that the company is actively embedding AI across its entire software platform, including its newly launched Figma Make (AI-driven prototyping tool), FigJam AI, and Dev Mode MCP server. These investments may put pressure on gross margins in the short term, but are a positive driver for long-term growth prospects.”

RBC said that the market's general valuation of Figma means 32x the expected revenue scale in 2026 (2026E), while its comprehensive software peers are only about 10x. This prompted RBC to give Figma a careful rating “consistent with the market” and an initial target share price of $75, which means that Figma's stock price only has room to rise 7% compared to the current price.

Similarly, Wall Street bank Morgan Stanley opened its first coverage with a “neutral” rating and gave a bullish target price of $80, which means that the stock's future upside is about 14% in Damo's view.

“The integration of workflows and the overall expansion from UX designers to developers, marketers, and product managers have provided our estimated TAM (potential market) of approximately $26 billion a runway to increase market penetration over the long term, compared to the current penetration rate of only 4%.” Morgan Stanley analysts led by Elizabeth Porter said in a report. “While generative AI is expected to reshape digital product development processes, Figma is well-positioned given its dominant position in the structurally important design market and its central position as a platform for design work.”

Bank of America also gave the first coverage rating of a “neutral” rating due to high valuation factors, and gave an optimistic target price of $85.

“The corporate value/sales (EV/sales) corresponding to our target price of $85 is 40x, based on our estimated 2026 natural year expected revenue (CY26E), or about 1.9x after 21% growth adjustment. Given the longer growth cycle in a large serviceable market, this level is also ahead of the large-cap stock community.” Bank of America analysts Brad Sills and Trevor Dodds said in Monday's report.

J.P. Morgan began initial coverage with a “neutral” rating, but the target price is even lower, at only $65, which means that in J.P. Morgan's view, Figma's stock price will decline in the future.

“Our target share price of $65 as of December 2025 is based on approximately 30x EV/Cy26E revenue, while comparable software companies are about 12x,” J.P. Morgan analysts led by Mark Murphy said in a report. “Due to the upward potential of the model, the new product categories are still in the early stages, and AI monetization expectations, a moderate premium multiplier is reasonable, but excessive premium is not a rational performance.”

At the same time, Goldman Sachs also began the first research report coverage with a “neutral” rating, but gave the most bearish target price of only $48, which means a significant decline in the future. Like other Wall Street investment institutions, Goldman Sachs was impressed by Firgma's software product platform and its market potential.

“Despite this, considering that new products and AI monetization are still in the early stages, we remain cautious because we have limited visibility into the momentum and revenue contributions of some short-term growth drivers,” Goldman Sachs analysts led by Kash Rangan said in a report. “We think the current level of valuation is relatively full, so we're trying to find better risk/reward. Despite this, we think its long-term fundamentals are attractive, and we believe Figma has the potential to grow into a SaaS software company with annual revenue of more than $10 billion and extremely stable barriers in the future.”