Figma (FIG): Exploring Valuation After Recent Share Price Momentum and Volatility

Figma (FIG) shares are getting fresh attention after recent trading activity saw the stock move in a tight range over the past week, while still gaining 15% in the past month. Investors are watching for signals on what could drive the next move.

See our latest analysis for Figma.

Figma’s share price has been on a rollercoaster this year, dropping 47% year-to-date, but seeing a solid 14.6% gain over the past month that hints at momentum returning. After a subdued week, traders seem to be evaluating whether growth potential can outpace recent volatility and risk concerns.

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With shares trading around $60 and analysts forecasting further upside, is Figma’s recent bounce a signal the stock remains undervalued? Or has the market already factored in future growth prospects and momentum?

Most Popular Narrative: 7.4% Undervalued

Figma’s fair value in the most closely followed narrative is set above the recent closing price, suggesting room for optimism given current levels. The narrative pits product integration and platform breadth against high valuation concerns, framing Figma as a potential category leader in design software.

“AI tools become a moat, not a feature. Figma becomes the default creative platform for product, marketing, and web teams, pulling users from Canva, Google Slides, and Webflow. The ecosystem effect snowballs. Once a company adopts multiple Figma products, leaving becomes too disruptive. Enterprise adoption deepens, brand recognition extends beyond designers, and the company starts to influence the broader creative software market the way Adobe did in the 2000s.”

Read the complete narrative.

Want to know what powers this bullish outlook? The narrative hinges on a financial model that expects rapid expansion, powerful margins, and a future profitability profile typically reserved for market-defining tech companies. Intrigued by which growth levers and assumptions drive that number? The details might surprise you.

Result: Fair Value of $65.7 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Figma's high valuation and intense competition in AI design tools could quickly turn sentiment if growth stalls or rivals outpace innovation.

Find out about the key risks to this Figma narrative.

Another View: Discounted Cash Flow Model Sends a Different Signal

While the popular narrative sees Figma as undervalued, our SWS DCF model paints a less optimistic picture. According to this approach, Figma’s shares are trading well above the DCF fair value estimate of $16.5. This suggests the stock might actually be overvalued. Could growth assumptions in the narrative be too bold?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Figma for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Figma Narrative

If the story so far doesn't match your perspective, or if you want to dig into the numbers yourself, you're just minutes away from building your own outlook, your way. Do it your way.

A great starting point for your Figma research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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