Has Figma’s 2025 Valuation Reset After Adobe Merger Fallout And 67.7% Share Price Slide?

• If you have been wondering whether Figma is a bargain after its rough debut, this breakdown will walk through what the current price might really be telling you.
• The stock has slipped about 4.8% over the last week and is roughly flat over 30 days, but is still down around 67.7% year to date, which has shifted a lot of investors from fear of missing out to fear of catching a falling knife.
• That drawdown has played out alongside ongoing integration headlines with Adobe after their terminated merger plans and a broader reset in high growth software valuations, which have pressured many design and collaboration names. At the same time, commentary around Figma's role in product design workflows and competitive positioning against legacy tools has kept it firmly on the radar of long term growth investors.
• Right now Figma scores just 0/6 on our undervaluation checks. In the sections that follow, we will unpack what different valuation approaches say about that score and hint at an even more useful way to think about value that we will come back to at the end.

Figma scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Figma Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates what a company is worth today by projecting its future cash flows and discounting them back to the present.

For Figma, the model starts with last twelve month Free Cash Flow of about $283.9 million and then applies analyst forecasts and in house assumptions to build a two stage Free Cash Flow to Equity profile. Analysts provide detailed estimates for the next few years, after which Simply Wall St extrapolates growth, leading to projected Free Cash Flow of roughly $754.4 million by 2035.

When all these future cash flows are discounted back to today, the DCF model arrives at an intrinsic value of about $19.58 per share. Compared to the current market price, this implies the stock is roughly 90.8% overvalued, suggesting investors are paying significantly more than what the cash flow outlook supports.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Figma may be overvalued by 90.8%. Discover 913 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Figma.

Approach 2: Figma Price vs Sales

For a fast growing software business that is still building toward mature profitability, the price to sales ratio is a useful yardstick because revenue is less affected by near term investment in product and go to market. Investors typically accept a higher multiple when they expect stronger long term growth and lower risk, while slower or more uncertain growth usually warrants a more modest valuation.

Figma currently trades on a price to sales ratio of about 19.1x, which is well above both the broader Software industry average of roughly 4.9x and the peer group average of about 7.7x. On the surface, that kind of premium suggests very elevated expectations relative to other design and collaboration names.

Simply Wall St introduces an additional lens called the Fair Ratio, its proprietary estimate of what a reasonable price to sales multiple should be for Figma given its specific mix of revenue growth, profit margins, risk profile, industry dynamics and market capitalization. This tailored benchmark is more informative than a simple peer or industry comparison because it adjusts for how exceptional or risky Figma actually is. In this case, Figma's current 19.1x multiple sits meaningfully above its Fair Ratio, which points to a stock that appears richly valued on a fundamentals adjusted basis.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1454 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Figma Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to attach your story about Figma to the numbers behind its fair value. A Narrative is your view of how the company will grow, including your assumptions for future revenue, earnings and margins, which the Simply Wall St platform then converts into a forward financial forecast and a fair value estimate. This makes valuation more intuitive because the journey runs in a straight line, from the company story you believe, to the forecast that flows from it, and finally to a fair value you can compare with today’s share price to inform your decision to buy, hold or sell. Narratives are easy to create and explore in the Community page on Simply Wall St, which is used by millions of investors, and they update dynamically as new information like earnings, product launches or macro news comes in. For example, one Figma Narrative on the platform currently sees fair value near $65.70, while another sits far lower, reflecting how different assumptions on growth, margins and risk can lead to very different conclusions.

Do you think there's more to the story for Figma? Head over to our Community to see what others are saying!

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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