Figma Inc. Faces a Sharpened Analyst Outlook Ahead of Earnings Release
The brokerage firm Piper Sandler has updated its coverage of Figma Inc. (FIG) with a new price target of $35—a 50 % reduction from the previous target of $70—and has retained an Overweight rating. This adjustment follows a transfer of coverage and a broader review of the company’s valuation metrics. The move is noteworthy because it signals a more cautious stance on Figma’s near‑term upside, even as the firm acknowledges the potential for long‑term value creation through its expanding product portfolio.
Earnings Preview and Forecast Discrepancy
Figma is slated to present its financial results for the quarter ended 31 December 2025 on 18 February 2026 at its upcoming financial conference. Early analyst consensus projects an earnings‑per‑share (EPS) figure of $0.07 per share for the current quarter, a sharp decline from $0.20 per share reported in the same period last year. The 65 % reduction in projected earnings is a primary driver behind the lowered price target, as it tightens the earnings multiples that investors use to assess the company’s valuation.
Market Reaction to the Rating Change
The announcement has already been reflected in the market. On 2 February, FIG shares fell 3.36 %, a move that is consistent with the market’s adjustment to the more conservative valuation. The stock’s current closing price of $24 sits well below both the 52‑week high of $142.92 and the 52‑week low of $23.99, suggesting that the shares are trading near the lower boundary of their recent range. Despite this, the company’s market capitalization remains robust at $12.8 billion USD.
Competitive Landscape and Strategic Implications
Figma’s product suite—spanning collaborative design (Figma Design), code inspection (Dev Mode), ideation (FigJam), presentation (Figma Slides), illustration (Figma Draw), brand publishing (Figma Buzz), web publishing (Figma Sites), and AI‑driven prototyping (Figma Make)—positions it as a comprehensive tool for design and development teams. However, the broader creative‑software sector is experiencing intensified competition, exemplified by Adobe’s own volatility. Adobe shares have been under pressure, with analysts warning of a potential “make‑or‑break” support level. In this environment, Figma’s ability to maintain growth momentum hinges on both product differentiation and the ability to convert design workflows into tangible revenue streams.
Forward‑Looking Assessment
While the recent analyst downgrade tempers short‑term sentiment, the underlying fundamentals—particularly the breadth of Figma’s product ecosystem—remain compelling. Should the company demonstrate that it can sustain or grow its user base, monetize its premium features, and deliver a higher EPS than the conservative estimates, the price target could rebound. Investors will be closely watching the forthcoming earnings conference for clarity on revenue drivers, customer churn, and the impact of its AI‑powered tools on both usage and profitability.
