Core Viewpoint - Figma's stock has experienced a significant decline since its IPO, dropping over 25% from the initial price of $33 per share, but long-term investors may still find potential for growth due to the company's revenue increases and market opportunities [1][5]. Company Performance - Figma's revenue for the first nine months of 2025 reached $752 million, reflecting a 41% increase compared to the same period in 2024 [4]. - Despite the revenue growth, Figma reported a loss of over $1 billion in the same timeframe, which is an increase from a loss of $830 million in the previous year [5]. - The company does not have a P/E ratio due to its losses, but its price-to-sales (P/S) ratio stands at 12, indicating a high valuation relative to its sales [5]. Market Potential - Figma estimates its total addressable market at $33 billion in annual revenue, suggesting significant growth potential as it generated an estimated $1.05 billion in revenue for 2025 [8]. - The average revenue growth for S&P 500 companies is estimated at 5.6% for 2025, while Figma's growth rate significantly exceeds this benchmark [8]. Financial Health - Figma generated $204 million in free cash flow in the first nine months of 2025, indicating that it has sufficient cash to sustain operations despite net losses [9]. - The company's high stock-based compensation, amounting to around $1.1 billion, contributed to its losses but also reflects its ability to generate cash [9]. Future Outlook - Figma's rapid growth and declining valuation suggest that the stock may outperform the market over the next five years, despite current challenges [10]. - The ongoing revenue increases and decreasing P/S ratio indicate that a turnaround for the stock could be on the horizon [11].