Key Takeaways:
Key Takeaways:
Figma (NYSE:FIG) could double from current levels, according to a 24/7 Wall St. price prediction that set a $36.78 12-month target on the design software company, representing 108% upside from Wednesday's close of $17.63.
"The gap between a fundamentally healthy growth business and a stock price that already discounts severe AI disruption" is the key factor tipping the scale toward a buy, 24/7 Wall St. analysts wrote in a note published Thursday, assigning medium confidence to the call.
Citi initiated coverage of Figma with a Buy/High-risk rating and a $36 price target, sending shares up roughly 3% in premarket trading. While acknowledging concerns around seat compression as AI-native design tools proliferate, Citi analysts said the market underestimates offsetting growth drivers including seat mix upgrades, expanding non-designer personas, and rising AI-driven consumption. Proprietary customer checks with hyperscalers and large financial services firms revealed strong seat upgrades and credit pack utilization.
Figma reported Q1 earnings of $0.10 per share, beating the $0.06 consensus by 67%, while revenue of $333.4 million exceeded projections of $316 million by 5.5%. Revenue grew 46% year over year, accelerating from 40% in the prior quarter. The company posted $275 million in gross profit at an 82% margin, $52 million in non-GAAP operating income at a 16% margin, and $89 million in free cash flow at a 27% margin. Net dollar retention hit 139%, the highest in over two years.
Following the beat, Figma raised its full-year 2026 revenue guidance by $55 million to a range of $1.422 billion to $1.428 billion, implying 35% growth, while increasing operating income guidance to $125 million to $135 million. CFO Praveer Melwani cited "promising early traction on AI monetization and strength across the core platform."
The broader analyst consensus remains measured. FIG carries a Moderate Buy rating across 13 analysts, comprising three Strong Buy and 10 Hold, with a mean price target of $36.88. RBC's Rishi Jaluria holds a Hold rating with a $28 target. Morgan Stanley cut its target to $38 from $44 in May, maintaining an Equal Weight rating.
The stock has fallen 50% year to date and 84% from its post-IPO peak of $142.92, with a 52-week range of $16.60 to $142.92. Insider selling from CEO Dylan Field, the CFO, and the CTO totaling roughly $14.5 million was disclosed under pre-arranged Rule 10b5-1 plans.
The 24/7 Wall St. bull case targets $50 or higher if revenue compounds above 40% and operating leverage materializes. The bear case, with a $28 target, assumes AI commoditization erodes pricing power and growth decelerates below 30%. A final lock-up expiry in mid-August remains a key near-term risk.
For holders, the 108% implied upside reflects a deeply discounted valuation on a business growing revenue at 46% with expanding margins. The next catalyst is Q2 earnings, where investors will watch for another quarter of 40%-plus revenue growth and progress toward GAAP profitability.
This article is for informational purposes only and does not constitute investment advice.
