Analyst Bradley Sills from Bank of America Securities reiterated a Hold rating on Figma, Inc. Class A and decreased the price target to $60.00 from $69.00.
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Bradley Sills has given his Hold rating due to a combination of factors influencing Figma, Inc. Class A’s stock. Despite the company’s impressive growth metrics, such as a 4% revenue beat in Q3 and an increase in net dollar retention to 131%, the stock’s valuation remains a concern. Figma has shown strong momentum with an expanding customer base and successful monetization of AI features, which are driving upgrades and engagement.
However, the stock is currently trading at a significant premium compared to the large-cap software group, which limits the potential for near-term upside. The valuation, at 16.5 times CY27 revenue, is considerably higher than the industry average, suggesting that much of the growth potential is already reflected in the stock price. As a result, Sills maintains a Neutral rating, adjusting the price objective to $60 due to multiple compression across the applications group.
In another report released on November 4, Wells Fargo also maintained a Hold rating on the stock with a $52.00 price target.
Based on the recent corporate insider activity of 42 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.