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Investing.com - Morgan Stanley has reduced its price target on Figma Inc (NYSE:FIG) to $70 from $80 while maintaining an Equalweight rating on the stock. Currently trading at $68.13, Figma’s stock sits near its 52-week low of $64.55, with InvestingPro analysis indicating the stock is currently overvalued.
The investment bank noted that Figma’s revenue growth remained strong at over 40% year-over-year, which aligned with the high end of the company’s preliminary second-quarter results. The company maintains impressive gross profit margins of 88.53%, according to InvestingPro data.
Morgan Stanley pointed out that Figma’s guidance for the third quarter and fiscal year 2025, projecting approximately 33% and 36.5% year-over-year growth respectively, likely fell short of investor expectations.
The firm acknowledged Figma’s significant investments in generative AI as positive for long-term growth, but highlighted that operating margins face near-term pressure, with fiscal year 2025 targets reflecting approximately 8 percentage points of compression year-over-year.
While Morgan Stanley continues to view Figma as a market-leading platform in design with unique positioning for generative AI, it cited the company’s current valuation of more than 30 times enterprise value to sales as limiting the near-term risk/reward profile.
In other recent news, Figma Inc . reported its financial results for the second quarter of 2025, showcasing a revenue of $250 million, marking a 41% increase year-over-year. Despite the revenue growth, the company’s earnings per share (EPS) were below expectations, at $0.04 compared to the projected $0.08. Wolfe Research maintained its Peerperform rating following these results, which aligned with Figma’s preliminary figures. Goldman Sachs also reiterated its Neutral rating, setting a price target of $49.00, citing that the results were generally in line with estimates. BofA Securities, however, lowered its price target from $85.00 to $69.00, maintaining a Neutral stance due to valuation concerns. The firm noted that Figma’s shares are trading at a premium, 26 times the calendar year 2026 revenue. These developments come as Figma navigates its early days as a publicly traded company.
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