Buy tech sell-off, Wedbush’s Ives says: ’this is a 1996 moment, not 1999’
Investing.com - Goldman Sachs has reiterated its Neutral rating and $49.00 price target on Figma Inc (NYSE:FIG), currently valued at $33.21 billion, following the company’s second-quarter fiscal 2025 results and recent public debut. According to InvestingPro analysis, the stock appears overvalued at current levels, trading between analyst targets of $48-$96.
The investment bank noted that Figma’s results were relatively in line with its estimates, representing more detailed reporting of the company’s pre-IPO flash results. With impressive gross profit margins of 88.53% and a healthy current ratio of 3.54, the company shows strong operational efficiency. Goldman Sachs attributed the stock’s after-hours decline of 14% to investors’ expectations for greater upward revisions to fiscal second-half 2025 guidance, adding to the stock’s significant 41% decline over the past six months.
Goldman Sachs maintained its long-term thesis that Figma has a multi-year opportunity to expand wallet share within its customer base through seat expansion among non-designers and higher multi-product attachment rates. The firm also highlighted that AI capabilities through Figma Make could introduce a path for consumption-based revenue over time. InvestingPro analysts project 35% revenue growth for FY2025, with 13 additional exclusive insights available to subscribers.
The investment bank observed that while Figma Make is off to a good start, meaningful revenue contribution will take time to realize, with potential scale expected in fiscal 2026. Goldman Sachs noted that analyzing Figma Make’s revenue impact will be more challenging than previous new products since it is bundled into the highest seat tier rather than sold as a standalone product.
Despite seeing compelling long-term fundamentals, Goldman Sachs maintained its balanced view, considering the valuation as "relatively full at current levels" and indicating it would look for better risk/reward opportunities.
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 from the previous year. Despite this impressive revenue growth, the company’s earnings per share (EPS) fell short of expectations, reporting $0.04 against the anticipated $0.08. Wolfe Research responded to these results by reiterating its Peerperform rating on Figma, highlighting that the figures were in line with preliminary data previously shared by the company. Additionally, BofA Securities adjusted its price target for Figma to $69, down from $85, maintaining a Neutral rating. This adjustment was attributed to valuation concerns, as Figma’s shares are trading at a premium compared to the large-cap software group. These developments come as Figma navigates its first earnings report as a publicly traded company. The company’s operating income for the quarter stood at $11.5 million, resulting in a 4.6% operating margin.
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