Beaten-Down Figma Shares Rebound on Strong Growth Outlook. Is the Stock a Buy?

After rejecting a buyout offer from Adobe and instead opting to go public, Figma (NYSE: FIG) has struggled in terms of stock price. The collaborative design platform company has been caught in the software-as-a-service (SaaS) sell-off, which has taken the stock to below its $33 IPO price.

For a stock that opened at $85 its first day of trading and closed at $115.50, it has been a hard fall from grace.

Image source: Getty Images.

Figma is still reporting strong revenue growth

However, the action in Figma's stock price hasn't necessarily been correlated with its operational performance. For Q4, the company saw its revenue soar 40% year over year to $303.8 million, easily topping the $293.15 million analyst consensus compiled by London Stock Exchange Group. Adjusted EPS, meanwhile, came in at $0.08, a penny above analyst estimates.

One of the most impressive metrics that Figma reported was a 136% net revenue retention (NRR) rate for customers with annual recurring revenue (ARR) of $10,000 or more. This metric measures how much additional money existing clients who have been customers for a year or more have spent over the past year, after any churn. Any number over 100% represents growth. This number has been accelerating with the company reporting 131% NRR in Q3 and 129% in Q2.

The growth in NRR has been helped by strong cross-platform adoption, with customers opting to use both Figma Make and Figma Design. Figma noted that 80% of weekly users who use Figma Make on full software licenses now also use Figma Design, showing how the products can be tightly integrated. Figma Design is its core product that helps create layouts and user interfaces, while Figma Make is an AI tool that can help turn designs into apps or prototypes.

The company has leaned into AI, and its product lineup doubled in 2025 to eight solutions. Meanwhile, it said about 75% of its customers with ARR above $10,000 are now using AI credits weekly, up from none a year ago. In March, the company's model will shift to charging for both seat and AI credits.

Looking ahead, Figma forecast that its 2026 revenue would come in between $1.366 billion and $1.374 billion, representing about 30% year-over-year growth at the midpoint of its guidance. For Q1, it is looking for revenue of between $315 million and $317 million, representing 38% year-over-year growth at the midpoint.

Is the stock a buy?

Figma is growing quickly with no signs of AI disrupting its business. Meanwhile, its valuation has shrunk to a forward price-to-sales (P/S) ratio of around 8.5 times. That's pretty attractive for a company projecting 30% revenue growth this year. Meanwhile, the company is introducing new AI-powered products that should continue to drive strong growth and looking to shift its pricing model from subscription to charge for AI credit usage.

I'd consider buying a small position in the stock while looking to add more shares on any further price pressure.

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe and Figma. The Motley Fool recommends London Stock Exchange Group Plc and recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.