Mark Murphy, an analyst from J.P. Morgan, has initiated a new Hold rating on Figma, Inc. Class A (FIG).
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Mark Murphy has given his Hold rating due to a combination of factors that reflect both the strengths and challenges facing Figma, Inc. The company has established itself as a core system of record for design workflows, supported by its innovative and interoperable platform. This has led to strong network effects and a high gross retention rate of 96%. However, despite these strengths, there are concerns about the premium valuation of the stock, which is trading at approximately 36 times the estimated revenue for 2026. This high valuation raises questions about the sustainability of Figma’s growth rate and the potential impact of pricing and packaging changes.
Furthermore, while Figma’s position in the AI landscape is seen positively, the company faces intense competition and potential challenges from AI advancements that could reduce the need for human designers. The market is also wary of the high penetration of Figma’s core product, which may limit further growth. Despite these challenges, the potential for new product releases and AI monetization offers some upside, justifying the Hold rating as investors weigh these mixed factors.
In another report released today, Morgan Stanley also maintained a Hold rating on the stock with a $80.00 price target.
Based on the recent corporate insider activity of 28 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of FIG in relation to earlier this year.