Is Figma’s Stock IPO Price Overvalued? Analysts Weigh In on Potential Gains

Figma, the popular cloud-based design platform, is set to go public. In July 2025, the company announced plans to sell about 37 million shares at $25–$28 each, aiming to raise roughly $1.03 billion. That pricing implies a market value in the $13–$16 billion range (depending on share-count math). By comparison, Figma was last valued at $12.5 billion in a 2024 tender offer, and it was offered $20 billion by Adobe before regulators shot down that deal. In my seven years analysing tech IPOs, I see a lot to unpack here: Is Figma’s IPO price too rich for its own good, or is the market rightly valuing its rapid growth and broad adoption?

Figma’s Growth Story and User Base

To understand the IPO, first look at Figma’s fundamentals. Figma has grown rapidly – its revenue jumped 46% year-over-year in Q1 2025. For full-year 2024, it did roughly $749 million in sales (a 48% increase from 2023). Importantly, Figma isn’t just a niche tool: it boasts about 13 million users (two-thirds of them non-professional designers). Its customer list is impressive – 95% of Fortune 500 companies use Figma. These numbers show a popular, fast-growing business.

In practical terms, think of Figma as “Google Docs for designers.” It lets multiple team members edit interfaces or graphics in real time. I’ve seen collaboration tools become market leaders before, and Figma’s viral, team-oriented approach has made it a “best-in-class” selling machine, as venture capitalist Tomasz Tunguz puts it. That means the product itself helps sell the product – when one designer in a company uses Figma, others want it too. Figma has also been adding new features (like the FigJam whiteboard and AI-powered design tools) to broaden its use beyond pure design into general productivity. This platform strategy has driven a 132% net-dollar retention rate (meaning customers are spending 32% more on average than the previous year). In short, on the growth side, Figma looks strong.

IPO Price and Valuation

Still, the IPO price is high by many measures. At the top end of $28 per share, Figma’s implied valuation is around $16 billion if you include all convertible stock, or about $13.6 billion if you count only current shares. Either way, it’s still significantly below the $20 billion Adobe once offered – but it’s a premium to its last private valuation ($12.5 billion).

From an investor’s perspective, that price equates to a price-to-sales ratio (P/S) of roughly 20x (using 2024 revenue figures) – higher than established peers (Adobe was ~14x P/S). In human terms, it’s like buying a luxury car: the sticker is steep, but you’re paying for cutting-edge design and tech. Analysts will watch closely if Figma’s future growth justifies this “luxury price.” If Figma hits its revenue targets (some analysts project ~$1B by 2026), then 20x sales could seem reasonable.

Key IPO details to keep in mind:

• Share offering: ~12.5M new shares from the company and ~24.7M from existing investors, plus up to 5.5M more in an over-allotment option.
• Price range: $25–$28 per share.
• Ticker: Figma will list on NYSE as FIG.
• Proceeds: About $1.03 billion at the top end (though Figma only keeps proceeds from its 12.5M new shares).

In real-world terms: if you were told the elevator pitch for Figma’s IPO, it’s “A fast-growing SaaS design platform with tens of millions of users, selling shares at a $14-16 billion valuation.” That draws both excitement and scrutiny.

What Analysts and Investors Are Saying

Opinions among analysts and investors are mixed – which is typical for hot tech IPOs. Some see Figma’s high growth and enterprise footprint as justifying a premium. For example, VC Tomasz Tunguz notes that Figma’s collaborative model has created “best-in-class sales efficiency” thanks to viral adoption. On the other hand, others urge caution. Figma CEO Dylan Field himself has warned that AI-powered design tools (like new features in Photoshop) could make some users less dependent on Figma. As one corporate attorney quoted by Reuters puts it, “investor attention remains firmly on companies with solid fundamentals and a clear path to profitability”. That means the market will want proof Figma can keep profitable growth up.

A recent industry newsletter summarised the mood: the abandoned Adobe deal “casts a long shadow over Figma’s IPO” and “many investors and analysts will be looking to see whether public markets can deliver the kind of valuation that Adobe was willing to pay”. Put bluntly, the question is: “Can Figma command a $20B+ valuation from the market?” Even the midpoint of the IPO range pegs it under that, so a strong debut could ease some doubt.

From what I’ve seen, most analysts (and even some retail traders) are cautiously optimistic. Figma sits at the intersection of big trends: cloud software, SaaS, and collaborative tools. Its latest quarters have shown strong revenue growth and even profitability – it earned $44.9M in Q1 2025. This combination (growth + profits) is a rare sweet spot. If Figma meets or exceeds market expectations, its stock could easily pop on debut, as many IPOs do. But if there’s any stumble in execution or a broader tech sell-off, the valuation might come under pressure.

Weighing Upside vs. Risks

As I evaluate Figma’s IPO, here’s what stands out:

• Strengths (Upside): Collaborative platform with 13M users and nearly all Fortune 500 clients means steady demand. Expanding products (whiteboarding, slides, developer tools) and AI features could widen its market. Profitable growth and high customer retention (132% net retention) are highly attractive traits. If Figma continues innovating, it could justify a premium price tag – think of it as paying extra for Google Docs back when it first debuted.
• Risks (Potential Downsides): The IPO price already factors in a lot of optimism. Investors will scrutinise any sign of slowing growth or rising costs. There’s also competition (Adobe and others) and the possibility that AI tools make design easier without Figma. Trade tensions or visa restrictions (noted in filings) could also hurt its mostly international user base. In short, like any tech stock, it’s vulnerable to market mood swings.

To give a sense of balance, here are a few key points I consider essential:

• Figma’s price-to-sales is high, reflecting sky-high growth expectations.
• Its expanding suite and viral adoption are very promising (I compare it to how Google Docs upended word processing – Figma could do the same for design).
• The $20B Adobe offer sets a benchmark that’s unlikely to be met, but it also proves Figma’s potential worth.
• Tech market conditions (IPOs can falter if markets turn sour) will play a big role.

I like analogies to illustrate: Imagine Figma’s IPO like a hot new gadget from a startup – early reviews (financials) are great, and pre-orders are strong, but you still wonder if it can meet the hype once it ships. In the first person, I’d say: having covered IPOs for years, this one feels exciting but pricey. The fundamentals justify a high valuation, yet I’m looking for guarantees like continued profit growth and market share wins.

Figma vs. Tech Giants (Acquisition Buzz)

Another question in investor circles: Could a bigger tech company still swoop in? The Adobe saga showed regulators blocked a deal, but Microsoft was rumoured by some to be a potential buyer. As of now, Microsoft has not announced any interest. Figma’s management seems focused on growth as an independent company (their roadshow emphasises building long-term value, not a buyout). For now, my experience tells me it’s prudent to treat any “Will Microsoft buy Figma?” chatter as speculation. Microsoft has its own design tools and other priorities (like AI infrastructure and security). If Figma soars as a public company, acquisition chatter might heat up, but until something official comes out, that’s just another what-if.

Conclusion: Priced Right or Overhyped?

So, is Figma’s IPO overvalued? The answer, in my view, is: It’s rich, but not unreasonable given the story. Figma is trading at a premium because investors are banking on its rapid growth and platform potential. Analysts I’ve read praise its fundamentals and adoption, yet caution that the market is fickle. If Figma keeps growing near 50% a year and corners the market for collaborative design (and perhaps beyond), paying a 15–20x sales multiple might be a bargain in hindsight.

However, there are no guarantees. As one legal analyst told Reuters, the IPO landscape today favours companies with “solid fundamentals and a clear path to profitability”. Figma appears to fit that bill better than many tech startups. In my experience, the best approach is to watch the debut, see how the stock trades, and consider whether the long-term vision holds up.

From a first-person perspective: I’m cautiously bullish. Figma’s innovation and user base give me confidence, but I won’t be surprised if early trading is volatile. Think of it like betting on a rising star: the field is strong, but I’ll wait to see if it actually crosses the finish line at full speed. In any case, Figma’s IPO is a landmark moment – whether it turns out to be a savvy buy at IPO price or a lesson in IPO euphoria will be revealed in the coming months.