Figma (NYSE:FIG), a design and product development platform, received an array of initiations on Monday, with most analysts giving the company a Neutral or Perform rating due to its high valuation.
Shares dropped 4% during early Monday market action.
Figma made its initial public offering approximately one month ago. Although priced at $33 per share, investors quickly drove the value to more than $100. Share price has since moderated and somewhat stabilized, trading in the $70s over the past week.
Investment firms are high on the product offerings and clientele Figma has amassed.
RBC Capital Markets noted Figma has more than 13M monthly active users and more than 450,000 paid customers, including 95% of Fortune 500 companies. Figma also utilizes artificial intelligence to make the design experience easier for users.
"While investors may have concerns that AI may simplify application design/development, therefore competing with Figma, we believe AI could be a real tailwind for Figma," said RBC analysts, led by Rishi Jaluria, in a Monday investor note. "We note the company is investing aggressively in embedding AI throughout the platform, including products like Figma Make, an AI-powered prototyping tool, FigJam AI, and Dev Mode MCP server (investments that will likely pressure gross margins in the near term)."
Figma trades at 32x 2026E revenue compared to blended peers at 10x, which prompts RBC to give Figma a Sector Perform rating and $75 price target.
Similarly, Morgan Stanley initiated coverage with an Equal-weight rating and $80 price target.
"The consolidation of workflows and expansion beyond UX designers into developers, marketers, and product managers provides a long runway to expand penetration into our estimated ~$26 billion TAM, up from 4% penetration today," said Morgan Stanley analysts, led by Elizabeth Porter, in an investor note. "While GenAI stands to transform digital product development, Figma is well-positioned given its dominance in the structurally important design market and status as the platform for design work."
Bank of America initiated coverage with a Neutral rating, due to its valuation, and an $85 price objective.
"Our PO of $85 represents EV/sales of 40x our CY26E revenue, or 1.9x adjusted for 21% growth, which is also ahead of the large cap group given a longer duration for growth in a large addressable market," said BofA analysts Brad Sills and Trevor Dodds, in a Monday note.
J.P. Morgan also initiated coverage with a Neutral rating but a lower $65 price target.
"Our $65 Dec 2025 PT is based on ~30x EV/CY26E revenue vs. comps at ~12x," said J.P. Morgan analysts, led by Mark Murphy, in a note. "The premium multiple is justified due to upside potential in the model, early-stage formation in new product categories, and AI monetization."
Meanwhile, Goldman Sachs also initiated with a Neutral rating but assigned the most bearish price target at $48. Like the other financial firms, Goldman Sachs was impressed by Firgma's products and its market potential.
"That said, we remain measured in our view given limited visibility into the momentum and revenue contribution from near-term growth drivers, particularly given the nascency of new products and AI," said Goldman Sachs analysts, led by Kash Rangan, in a note. "We see valuation as relatively full at current levels and therefore look for better risk/reward. Nevertheless, we see long-term fundamentals as compelling and believe that Figma has the potential to scale into a fortified SaaS business generating $10B+ in Revenue."