Figma Stock Is Down 84% From Last Year’s Price. Here’s What the AI Design Revival Means for FIG Through 2028

Key Stats for FIG Stock

• Past week’s performance: -2.4%
• 52-week range: $17 to $143
• Valuation model target price: $39
• Implied upside: +134.5% over 2.5 years

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Config 2026, Insider Selling, and a Stock Searching for Solid Ground

Figma, Inc. (FIG) fell roughly 12% over the past week, dropping to a fresh low near $17, as a cluster of insider stock sales weighed on sentiment during the same week the company hosted its annual Config 2026 design conference. The timing created an uncomfortable juxtaposition: leadership evangelizing product momentum publicly while executives quietly reduced their equity exposure.

Between June 3 and June 6, CEO Dylan Field sold 174,430 shares worth $4.4 million, CFO Praveer Melwani sold shares worth $1.9 million, and Chief Revenue Officer Shaunt Voskanian disposed of 87,510 shares for $2 million. Insider selling is not inherently bearish, and much of it follows pre-planned 10b5-1 trading schedules.

The Config 2026 event itself was a legitimate product catalyst. Figma used it to showcase new AI features embedded into its core design and prototyping platform. Those features, including Figma Make, MCP, and Figma Weave, were already driving results before the conference. Q1 revenue of $333 million grew 46% year over year, accelerating from 40% growth in Q4 2025 and beating the consensus estimate by roughly 5%.

CFO Praveer Melwani said on the earnings call: “Our outperformance in Q1 was fueled by stronger-than-expected seat expansion across the entire organization, driven by design’s growing importance and adoption of our AI products.” The company raised its full-year 2026 revenue guidance by $55 million, to a range of $1.42 billion to $1.43 billion, implying roughly 35% growth for the year.

Going forward, FIG stock will hinge on whether the Config AI product announcements translate into measurable Q2 revenue acceleration, which the company reports on August 13.

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Is Figma’s Valuation Reset Creating a Real Opportunity?

Under valuation model assumptions realized through 12/31/28, the stock is modeled using:

• Revenue growth (CAGR): 27%
• Operating Margins: 10.8%
• Exit P/E Multiple: 59.6x

Based on these inputs, the model estimates a target price of $39, implying 134.5% total upside from the current share price of $17 and a 40.2% annualized return over the next 2.5 years.

The 27.0% revenue CAGR assumption is actually conservative relative to Q1’s 46% actual growth. The model effectively assumes the growth rate decelerates as the business scales, which is a reasonable and disciplined framing. Net dollar retention of 139% in Q1, its highest in over two years, confirms that existing customers are expanding their spend meaningfully.

The 10.8% operating margin assumption requires the company to close a substantial gap. Figma’s Q1 GAAP operating margin was negative 41%, reflecting aggressive investment in headcount, AI infrastructure, and go-to-market expansion post-IPO. But the non-GAAP operating margin was already 16% in Q1, and the company generated $89 million in free cash flow in the quarter. The path from current reported losses to 10.8% GAAP operating margins over 2.5 years is steep but grounded in the revenue scale already underway and the company’s strong 82% gross margin.

The 59.6x exit P/E multiple is high by traditional measures but consistent with how the market prices high-growth software businesses with gross margins above 75%. At the current NTM P/E of 59.6x, the stock already sits at the exit multiple the model assumes, meaning the entire return comes from earnings growth rather than multiple expansion. That is a more conservative framing than the raw upside number suggests.

Figma vs. Adobe and Canva in the AI Design Race

Figma’s primary competitive reference points are Adobe (ADBE) and privately held Canva. Adobe’s $20 billion acquisition attempt for Figma was blocked by regulators in 2023, but Adobe has since moved aggressively to close the collaborative design gap through its own AI platform, Adobe Firefly, and the Creative Cloud suite.

Adobe trades at roughly 20x forward earnings with mid-single-digit revenue growth, making it a far more mature and cheaper business by traditional metrics. Yet Figma’s 46% revenue growth dwarfs Adobe’s pace and justifies a significant premium.

Canva competes directly in template-based and AI-assisted design, with a reported valuation of $26 billion in its most recent private funding round. Canva’s strength is in the self-serve and small business segment, while Figma is more deeply embedded in professional product and engineering teams. The competitive overlap has been increasing as Canva pushes upmarket and Figma expands its document and presentation capabilities.

Figma’s moat is real-time multiplayer collaboration, which remains technically ahead of Adobe’s offering and is not Canva’s primary focus. But the Adobe CFO departure in June rattled Adobe’s own stock and highlighted the uncertainty facing design software incumbents as AI shifts the economics of creative work. Figma is simultaneously a beneficiary of that shift, because its AI tools reduce design friction, and a potential risk target, because AI generation could reduce the volume of deliberate design work that Figma’s platform is built around.

Read our full take on Figma’s selloff and valuation upside >>>

What’s Driving FIG Stock Going Forward?

Figma’s most important near-term catalyst is Q2 revenue acceleration, due August 13. The company raised its full-year forecast on the back of Q1 AI monetization traction, and the stock will not sustainably recover until two or three consecutive quarters of strong growth convince investors that the AI product pivot is durable. Q1’s 46% growth rate sets a high bar, but management’s guidance raises signals that they have visibility into demand continuing through the summer.

The Findell activist situation remains an X-factor. If the board engages meaningfully with strategic alternatives, which could include a sale to a strategic buyer or a restructuring of the business, the stock could re-rate sharply. Adobe is the most logical acquirer, but regulatory precedent makes another attempt difficult in the near term. Microsoft, Salesforce, or a private equity sponsor are possibilities that investors have begun to discuss openly.

Config 2026‘s AI feature set also lays the groundwork for a potential monetization model shift. If Figma can convert AI features into premium tier upgrades rather than bundling them into base plans, the revenue per user trajectory could improve meaningfully by 2027. That is the same playbook that drove Microsoft’s Copilot penetration and Atlassian’s Rovo adoption, and it would directly support the 27% CAGR assumption in the model.

The risk that cannot be dismissed is insider selling. Pre-planned or not, the pace of executive share sales at current price levels signals that leadership is not personally betting heavily on a near-term recovery. That psychological signal matters to institutional investors who track insider activity as a sentiment indicator, and it will take several quarters of outperformance to fully offset the impression it created.

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Should You Invest in Figma?

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!