Core Viewpoint - Figma's stock has experienced a significant decline of over 30% in the past month despite strong growth metrics, raising questions about whether the market has overreacted or if the decline is justified [1][2]. Company Performance - Figma's revenue for 2024 reached $749 million, marking a 48% increase from the previous year [2]. - The company projects revenue for 2025 to be around $1.04 billion, indicating a year-over-year growth of 40% [3]. - Figma's software facilitates collaboration on design projects, contributing to its impressive growth [2]. Impact of AI - AI is seen as a growth opportunity for Figma, with the introduction of Figma Make allowing users to create polished applications from ideas [4]. - The partnership with ChatGPT enhances Figma's offerings by enabling users to generate diagrams through chatbot conversations [4]. Financial Metrics - In the third quarter, Figma reported a net loss of just under $1.1 billion against quarterly revenue of $274 million, primarily due to one-time stock-based compensation expenses of $975.7 million [5]. - On an adjusted basis, Figma exceeded analysts' expectations with earnings per share of $0.10, compared to the anticipated $0.05 [5]. - The company posted a slim profit of just under $1 million attributable to shareholders in the second quarter, but incurred significant losses before and after that [6]. Market Valuation - Figma's stock trades at a forward price-to-earnings multiple of nearly 100, which is under scrutiny in the current market environment [7]. - As of the latest data, Figma's market cap was approximately $17 billion, suggesting a lower valuation compared to the $20 billion Adobe was willing to pay in 2022 [9].
What's Wrong With Figma Stock?