RBC Cuts Figma Target to $31, Morgan Stanley Lowers to $44
RBC cut Figma’s price target to $31 from $38 and Morgan Stanley reduced its target to $44 from $48 after citing solid Q4 results and margin pressures on free cash flow. Jim Cramer warned shares have plunged 90% from his prior recommendation and lack a sustainable competitive moat.
1. Price Target Reductions
RBC Capital lowered its price target on Figma to $31 from $38 while maintaining a Sector Perform rating. Morgan Stanley followed suit, cutting its target to $44 from $48 and affirming an Equal Weight rating based on current valuation reflecting growth expectations.
2. Q4 Performance and Margin Pressures
Both firms acknowledged Figma’s solid fourth-quarter performance, highlighting robust revenue growth but noting that thinning operating margins are compressing free cash flow. Analysts view the current share price as already accounting for these strengths and headwinds.
3. Cramer’s Competitive Moat Concerns
Jim Cramer reiterated that Figma lacks a durable competitive moat, pointing out that its platform faces numerous low-cost alternatives. He noted the shares have fallen 90% since his earlier recommendation, questioning long-term growth resilience.