To The Moon

Neutral at $65 or Bullish at $75: Which Target Fits Figma? 🤔

Figma just faced its first real stress test from Wall Street — and investors didn’t like the result. Shares dropped nearly -5% after JPMorgan initiated coverage with a Neutral rating and a $65 price target, roughly where the stock trades today. Meanwhile, FactSet consensus still leans Overweight with an average $75 target, implying about 15% upside from current levels.

This split has turned Figma into one of the most interesting battleground stocks in growth tech. The key question: is Figma a premium SaaS leader worth stretching for, or has the stock already priced in too much optimism?

---

📊 The Street’s Debate

JPMorgan’s neutral stance suggests caution. Their argument? Figma has undeniable product strength but faces valuation headwinds in a sector where investors are no longer willing to pay sky-high multiples for growth alone. At $65, JPMorgan essentially says: the good news is already in the price.

Consensus, however, still sees Figma as an emerging SaaS giant with room to run. A $75 target reflects belief in three things:

Continued enterprise adoption of its design collaboration tools.

Expansion into AI-enabled features that can enhance workflow productivity.

Stickiness of its subscription model, which provides stable, recurring revenue streams.

That 10–15% gap in target price might not sound huge, but it reflects a much deeper divide: whether Wall Street sees Figma as the next Adobe in collaborative design, or simply a good-but-not-great SaaS play.

---

💡 Why Figma Matters

For retail investors, Figma isn’t just another SaaS name. It represents one of the few true category leaders in cloud software — a platform that redefined how designers, product managers, and engineers collaborate in real-time.

Its rise has been meteoric: born as a design tool for startups, Figma now boasts adoption at Fortune 500 companies, schools, and global enterprises. It disrupted Adobe so effectively that Adobe attempted to acquire it for $20B in 2022, a deal regulators blocked. That failed acquisition attempt wasn’t a loss for Figma; it was proof of its disruptive power. 🚀

The stock’s valuation reflects that narrative. Investors are willing to pay a premium for companies that can define and dominate a category. But premiums can cut both ways — they create opportunity in bull cycles, and pain in corrections.

---

⚠️ The Bear Case

Skeptics argue that Figma is now at risk of being “just another SaaS stock.” Why?

1. Valuation compression — SaaS multiples have been under pressure as investors demand profitability, not just growth. Figma’s rich valuation makes it vulnerable to multiple contraction.

2. Competition rising — Adobe has doubled down on its own design collaboration suite, while smaller challengers keep emerging. The moat is strong, but not impenetrable.

3. Macro sensitivity — With enterprise budgets still cautious, any slowdown in tech spending could hit new seat growth.

4. Execution risk — Moving from a beloved design tool to a diversified productivity platform is no small feat.

From this lens, JPMorgan’s $65 Neutral rating feels like a warning: enjoy the product strength, but don’t overpay for it.

---

📈 The Bull Case

On the other side, bulls see Figma as still in its early innings:

Category leadership: Figma isn’t just participating in design collaboration; it is the default choice for many teams. Category leaders usually compound faster and longer.

AI upside: Integrating generative AI into design workflows could turbocharge adoption, making tasks faster and more accessible to non-designers.

Global expansion: With growing international adoption, Figma’s runway is far from saturated.

Revenue quality: Subscription SaaS models create sticky, high-margin revenue. Even in downturns, companies hesitate to cut core collaboration tools.

If this thesis holds, $75 might even be conservative — the long-term bull view imagines Figma becoming a multi-hundred-billion dollar software titan.

---

🤔 What Investors Should Watch

The JPMorgan vs consensus debate boils down to a time horizon question.

Short-term traders: Figma could face more downside pressure if multiples across SaaS keep compressing. That -5% reaction to JPMorgan’s note shows how sensitive the stock is to sentiment.

Long-term holders: If you believe in Figma’s category leadership and AI-enhanced growth, the dips may be opportunities to accumulate.

The key metrics to watch going forward:

Net new seat growth (are enterprises still expanding licenses?).

AI adoption (do new features bring incremental revenue?).

Margins (is Figma balancing growth with profitability?).

These factors will determine whether Figma deserves to trade closer to $65 or break decisively past $75.

---

🔥 The Bigger Lesson

There’s a broader takeaway here too: Wall Street “power ratings” can diverge wildly, especially for disruptive companies. A Neutral rating doesn’t mean bearish — it means prove it. For retail investors, the challenge is separating noise from signal.

Figma’s -5% drop doesn’t change its long-term potential, but it does remind us that valuation matters, even for beloved growth stories. This is a lesson that applies across SaaS and tech stocks — from Snowflake to Datadog to ServiceNow.

---

💬 Over to You

So Tigers, let’s debate:

👉 Do you see Figma’s pullback as a buy-the-dip opportunity or a sign that valuations are peaking?

👉 Should investors trust the consensus $75 Overweight view, or heed JPMorgan’s caution at $65?

👉 Long-term, do you believe Figma can evolve into the Adobe of collaboration — or will it stall out as just another SaaS stock?

Drop your views — because this is exactly the kind of battleground story where retail voices can cut through the noise.

@TigerStars  @Tiger_comments  @Daily_Discussion  @TigerEvents  @TigerWire