Figma FIG – Figma’s stock has swung sharply—down about 4% in the past week, up about 15.9% over the last month, and down roughly 40.1% year to date—sparking a fresh debate over whether today’s US$22.51 price is a bargain or a value trap. Different valuation methods pull i
For a week, Figma’s investors watched the numbers slide. Then they blinked—and the stock was suddenly climbing again.
Over the past week, Figma’s share price fell about 4%. Over the last month, it rose around 15.9%. But the bigger picture has still been rough for holders: year to date, the stock is down roughly 40.1%. With Figma trading at US$22.51. the recent whiplash has quickly turned into a familiar kind of question—does the move reflect a changing view of growth and risk. or does it simply reflect how fast sentiment can move ahead of fundamentals?.
In Figma’s latest valuation snapshot, the company’s value score sits at 1 out of 6. The debate isn’t just whether the stock is moving. It’s what that movement is doing to the story investors think they’re buying.
A discounted cash flow model reaches one conclusion: undervaluation.
Using a two-stage free cash flow to equity approach. the model starts from the latest twelve month free cash flow of about $235.1 million. From there, analyst estimates and Simply Wall St extrapolations project free cash flow reaching $1,177.4 million in 2035. Interim years are set at $154.8 million in 2026 and $500.7 million in 2029—each figure expressed in $. When those projected cash flows are discounted back, the model estimates an intrinsic value of about $27.25 per share. Versus the current share price of $22.51, that implies the stock trades at roughly a 17.4% discount.
On that DCF view, Figma looks undervalued.
The second method moves in the opposite direction.
Instead of focusing on earnings, the price-to-sales approach uses the revenue the business is already generating. Figma currently trades on a P/S ratio of 10.24x. That is above the Software industry average P/S of 3.79x and above the peer group average of 6.33x—simple comparisons that frame the stock as expensive versus its sector and closer peers.
Then comes a more tailored benchmark: Simply Wall St’s Fair Ratio for Figma, set at 9.22x. This metric estimates what a reasonable P/S might look like after accounting for factors such as earnings growth. profit margins. industry. market cap and specific risks. When the Fair Ratio of 9.22x is compared with the current P/S of 10.24x. it suggests Figma trades above that tailored benchmark. On this measure, the stock appears overvalued.
Those two valuation lenses—cash flow discounted back to today versus revenue multiples compared to benchmarks—don’t agree. And that mismatch is the heart of the current dispute over what the price at US$22.51 is really saying.
The numbers only become more vivid once investors switch from “method” to “narrative.”
On Simply Wall St. narratives are presented as stories that link assumptions about Figma’s forecast revenue. earnings and margins to a calculated fair value that can be compared with the current price. The platform notes that two narratives can produce very different conclusions when investors plug in different assumptions.
For Figma specifically, two previews are offered.
In the bull case, the fair value is about US$65.25. Against the current US$22.51 price, the implied discount is about 65.5%. The narrative assumes a revenue growth rate of 21.2%. Analysts modeled revenue reaching about US$1.7b and earnings of US$214.1 million by 2028. alongside profit margins improving from a loss position toward the broader US Software industry average.
To reach the US$65.25 target. the narrative assumes a high 236.2x P/E on the 2028 earnings. ongoing share count growth of 7.0% a year. and an 8.5% discount rate. The key risks are laid out directly: AI tools becoming more commoditised. slower than expected adoption of new products like Make and Buzz. and heavier investment or dilution weighing on per share earnings.
The bear case flips the framing.
Its fair value is about US$18.79. That makes the implied premium versus the current US$22.51 price about 19.8%. Here, revenue growth is assumed at 30.0%. This narrative leans on how Figma is described as deeply embedded in product teams and used by around 95% of Fortune 500 companies. while asking whether the stock price already reflects that position.
The bear tilt also points to strong adoption of products such as Buzz. Slides. Sites and Make. while raising a different concern: competitors across design. presentations and web building remain strong in their own niches. Risks center on growth slowing. AI features being matched by rivals. and the possibility that the stock could be priced more like a mature software company if execution or sentiment weakens.
The result is a sharper version of the same question investors are already asking after the stock’s swings: is today’s price closer to a discount waiting for cash flows to arrive—or closer to a premium priced for momentum that may not hold.
When Figma can be described as undervalued on a discounted cash flow view. yet overvalued on price-to-sales comparisons and a Fair Ratio benchmark. it’s easier to understand why sentiment is moving faster than fundamentals. It also explains why two investors can look at the same share price and walk away with opposite targets.
Figma at US$22.51 sits right where disagreement lives—inside a market that reacts to expectations, not certainty.
This article by Simply Wall St is general in nature. The commentary is based on historical data and analyst forecasts using an unbiased methodology. and the articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock. and it does not take account of objectives or financial situation. The aim is long-term focused analysis driven by fundamental data. The analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FIG.
Figma FIG stock price valuation discounted cash flow price to sales investing narrative bull case bear case US$22.51
Down 40% YTD seems like not a bargain, sorry.
I don’t get it… it goes up like 15% then down 4% and everyone’s “split”? Sounds like the app is glitching or something. If it’s worth 22.51 why was it like 3 months ago way different?
Value score 1 out of 6?? That sounds bad, like value trap 100%. But then it’s also “maybe bargain” which is hilarious. Probably depends on what day you bought it, not fundamentals, right? Also FIG reminds me of fig trees so maybe it’ll grow back…?
Investors debating like this is normal now. It’s down 4% for the week and up for the month, but still down 40% like c’mon. I swear these software stocks just swing with vibes/algos, not earnings. If it’s jumping today, then tomorrow it’ll probably drop again… unless they announce something huge.