Wall Street Turns Its Back on "Hot" IPO Figma As “Fantasy Math” Has Analysts Terrified…

"The price is wrong, b*tch." - Wall Street to Figma, probably…

Wall Street just took its first official look at Figma, and the verdict is basically: nice product, shame about the price tag. In short, the stock cratered nearly 10% Monday to $70.32 after analysts came out of the quiet period and slapped their ratings on the “hot” IPO. Hot being relative… this thing rocketed 250% on day one, only to bleed out 30% of those gains before the first bank even opened its mouth. Now the Street is cautious, which means they don’t want to be wrong, so they’ll call it a Hold and pray. 

(Source: Giphy) 

As for Figma itself, nobody is questioning what Figma is. It's the design standard. A browser-based collab tool for everyone from UX nerds to product managers to that one developer who “used to do graphic design in college.” It’s sticky, it’s everywhere, and Morgan Stanley pegs the addressable market at $26 billion. So far, so good. But the problem isn’t the software. It’s the price you’re paying for the story.

(Source: Barrons) 

For context, the valuation makes analysts' eyes bleed. Figma’s trading at 35x 2026 revenues. However, Adobe…the 800-pound gorilla it’s been eating lunch from… trades at 7x. Translation: Even “growth” SaaS names don’t sniff those multiples. 

Meaning, analysts aren’t idiots. They know this kind of valuation assumes a straight line of flawless execution for years that doesn’t get raw dogged with hiccups, competition, or  deceleration. But that’s fantasy math. Which is why Morgan Stanley initiated with a Hold at $80, JPMorgan sat at $65, Wolfe went Peer Perform (Hold) with no target. The polite way of saying: we like you, but not at this price.

(Source: Giphy) 

On the other hand, we have the AI component. In times past, this would’ve had every analyst covering it all horned up. But depending on who you ask, it’s either the biggest threat to Figma’s existence or the biggest moonshot it’ll ever see. Generative AI could automate away chunks of the design process, nuking Figma’s seat-based pricing model. Or it could supercharge the platform via its new product, Figma Make. For this reason, the Street doesn’t know which way it’ll break, so they hedged. “Key debate is whether Figma is on the right or wrong side of AI,” wrote JPM’s Mark Murphy (a.k.a. Your guess is as good as mine). 

But, but, but… despite the uncertainty, there was one outlier here. William Blair broke ranks with an Outperform and a $96 target, implying 25% upside. Why? Well, because they’re betting the “best-in-class metrics” justify the nosebleed multiple and that Figma will keep beating conservative estimates. Bold strategy Cotton, let’s see if it pays off for ‘em. 

(Source: Giphy) 

In the end though, this isn’t about whether Figma is a good company. It is. The question is whether you want to pay 35–49x sales for it when the market is littered with cheaper, profitable software names. If you buy here, you’re buying perfection… no margin for error, no slowdown, no AI rug-pull. But Wall Street just told you they’re not brave enough to make that bet yet. And that’s really all that matters from this consensus. Meaning, keep your eyes on Figma and place your bets accordingly. Until next time, friends…

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.