Figma Trades at 9.46X P/S as Q4 Operating Income Falls 22%
Figma’s stock trades at a 9.46X forward P/S versus the industry’s 4.03X after a 75% decline since IPO and underperforming its sector. Q4 non-GAAP operating income fell 22% to $44 million with margins squeezed by AI rollout costs, while revenue growth slowed below 40%.
1. Valuation and Price Performance
Figma's stock trades at a 9.46X forward 12-month P/S multiple, more than double the 4.03X average of internet-software peers, after a 75% decline since its IPO. The stock has underperformed both the internet-software industry, which is down 20.1%, and the broader tech sector, which is up 8.3%.
2. Operating Income Decline
In Q4 2025, Figma's non-GAAP operating profit dropped 22% year-over-year to $44 million, and its operating margin contracted by 1,200 basis points to 14%. The margin squeeze reflects rising costs from the rollout of Figma Make and other generative AI features.
3. Competitive Landscape
Figma faces intensified competition from Adobe's Firefly, Microsoft's Copilot and Teams integration, and Atlassian's AI-powered Jira and Confluence. These well-capitalized rivals are leveraging AI enhancements and cloud partnerships to capture design and collaboration market share.
4. Acquisitions and Revenue Trends
To bolster its AI capabilities, Figma acquired Weavy for over $200 million and Payload CMS, driving goodwill to $101.4 million by year-end 2025. Meanwhile, year-over-year revenue growth slowed to between 38% and 46% across 2025 quarters, with 2026 growth forecasts cut to 29.8% and EPS estimates falling 23%.