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Over the past week, design software company Figma has come under pressure as a broader software sell-off and concerns about AI-driven disruption weighed on investor sentiment, even as peers reported solid profits.
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Analysts and commentators are now divided between caution about its rich valuations and enthusiasm for Figma’s browser-based collaboration platform and embedded AI capabilities, making the upcoming February 18 earnings release an important time to clarify its role in an AI-heavy software landscape.
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We’ll now look at how concerns about AI disrupting design software could impact Figma’s investment story and appeal in the longer term.
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To own Figma here, you really have to believe that the browser-based, collaborative design platform can remain central to the way digital products are built, even as AI reshapes large parts of the software stack. The upcoming Feb. 18 earnings call is now the clearest near-term catalyst, not only for the usual revenue and guidance checks, but also for management’s compelling way of viewing AI as a growth driver rather than a threat. The recent software sell-off, sharp share price decline, and Jim Cramer’s comments about rich valuations and better AI capabilities elsewhere are sharpening the focus on Figma’s high Price-to-Sales multiple, persistent losses, and high CEO compensation. At the same time, the partnerships with Google Cloud and ServiceNow, plus waning short interest, suggest the AI story is still very much alive if execution holds up.
However, one governance issue in particular is worth further investigation. Figma’s share price is falling, but could be up to 32% below fair value. Find out if it’s a bargain.
Twenty-eight estimates of the fair value of the Simply Wall St Community range from roughly $17 to very high triple-digit levels, underscoring how widely opinions on Figma vary. When you place these alongside concerns about high valuations, persistent losses and AI-driven revenue risk, it becomes clear why different market participants can come to such different conclusions about the company’s future performance and why it pays to explore different perspectives before making a decision.
Discover 28 other fair value estimates on Figma – why the stock could be worth more than 5x its current price!
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