Core Insights - Figma had a successful IPO, with shares rising from $33 to approximately $80, leading to a market capitalization of around $40 billion, driven by rapid growth and strong retention rates [2] - The current trading multiple of nearly 37 times estimated revenue for 2025 reflects high growth expectations, but any slowdown could lead to a significant re-rating of the stock [3] - A conservative growth scenario suggests Figma's stock could drop to around $44 per share, indicating a potential 50% decrease from current levels [3] Growth Potential and Risks - Figma's revenue increased from less than $100 million in 2021 to $749 million in 2024, with a 46% year-over-year increase in the March quarter, indicating strong growth [3] - Competition from Microsoft, Canva, and AI-driven tools poses a risk to Figma's growth, as these alternatives may attract users away from Figma's platform [5][6] - Figma's long-term success depends on expanding its market beyond designers to include software developers and marketers, which is a more challenging endeavor [6][7] Market Dynamics - Enterprise adoption is still in early stages, with only over 1,000 clients paying $100,000 or more annually, which could limit revenue growth and margin expansion if not addressed [7] - The IPO released a small percentage of shares, with two-thirds still held by insiders under a lockup agreement, which could lead to selling pressure once it expires in early 2026 [8] - Figma's high valuation at 37 times sales suggests that investors are expecting flawless execution, making the stock a high-risk investment [9]