Figma stock continued its ongoing reversal and is slowly hovering near its all-time low as concerns about AI disruption accelerated. After rebounding to $31.30 on August 27, FIG has dropped to $20.25. Despite these fears, Figma’s business has demonstrated strong growth, which may help to boost its stock.
Figma’s growth is continuing despite revenue growth
Figma is a top technology company that runs a collaborative platform that teams use to design, prototype, and hand off digital products like websites and applications.
Its business has come under pressure as AI models advance because they can handle some of the tasks that it does. For example, platforms like Claude and ChatGPT can easily design and prototype products.
Still, there are positive signs that Figma’s business is doing well, with revenue soaring 48% to $370 million. This revenue was well above its guidance and what analysts were expecting.
The surge came as paid customers grew and user adoption accelerated. It had 15,964 paid customers paying over $10,000 in ARR and 1,635 paying over $100k a year.
Most notably, the revenue growth happened as the company revamped its business by introducing AI monetization. Over 80% of its customers with over $10,000 ARR were consuming these AI credits weekly.
At the same time, the company launched Code Layers, which will help companies generate ideas and build products without leaving the platform.
The management and analysts believe that Figma’s business will continue growing in the near term. Yahoo Finance data shows that the average estimate is that its third-quarter revenue will come in at $375.7 million, up by 37% on an annual basis.
For the year, analysts believe that its revenue will jump by 40% to $1.47 billion, followed by $1.82 billion next year. Its earnings-per-share (EPS) is also expected to do relatively well, rising to 29 cents. Figma tends to be highly conservative, meaning that its real results will be much better.
Analysts have a bullish outlook for the stock, with the average target being $43.92, up by 116% from the current level. Bank of America analysts see the stock rising to $33, while Citigroup boosted it from $35 to $37.
Figma stock price technical analysis
FIG stock chart | Source: TradingView
Figma stock has been in a strong downward trend this month. It dropped from a high of $31.3 in August to the current $20. At its peak after the IPO, the stock surged to $142. It has already dropped below the 50-day Exponential Moving Average (EMA).
Figma shares have remained below the Supertrend indicator, a sign that bears remain in control for now. Also, the Relative Strength Index (RSI) has continued falling and is nearing the oversold level of 30.
Therefore, the stock will likely remain under pressure in the near term. If this happens, it may drop to the key support level of $16.48, its lowest level in April and June this year. It will then bounce back as investors buy the dip.
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