Wells Fargo analyst Michael Turrin has maintained an Overweight rating on Figma (NYSE: FIG) while lowering the price target to $36 from $42. The adjustment reflects a revised outlook on the stock's valuation and near-term performance potential.

The revised target comes as the firm assesses the company's position within the sector. Previously, RBC Capital analyst Rishi Jaluria had maintained a Sector Perform rating on Figma with a $22 price target, while Piper Sandler analyst Billy Fitzsimmons reiterated an Overweight rating with a $30 target, indicating a divergence in analyst sentiment regarding the stock's trajectory.

Analyst Ratings and Price Targets

The following table summarizes the recent analyst actions on Figma:

Wells Fargo's reduction to $36 suggests a more cautious stance compared to the previous $42 target, yet remains above the $22 target set by RBC Capital. The Overweight rating implies that the stock is expected to outperform the broader sector in the current market environment.

Figma stock has plunged to $18, wiping out roughly $50 billion in market capitalization as it hovers near its all-time low. The shares have collapsed from a post-IPO high of $143, reducing the company's valuation from about $59 billion to approximately $9 billion. This sharp reversal comes as investors grow increasingly concerned that advancements in artificial intelligence will reduce demand for traditional software tools, a sentiment that has also driven down shares of peers like Adobe, Intuit, and ServiceNow.

The recent sell-off accelerated after Figma reported a net loss of $142 million in the first quarter, largely driven by a significant increase in stock-based compensation. Despite these losses, operational metrics remain strong. Revenue jumped 46% in the first quarter to $334 million, while the number of paid subscribers rose by 54% to 690,000. Major clients include Alphabet, Lufthansa, Uber, and Airbnb.

Financial Performance and Guidance

Figma's balance sheet remains robust, with the company ending the quarter holding over $1.6 billion in cash and no debt. Management has provided forward guidance for the second quarter, projecting revenue of $350 million, which exceeds the average analyst estimate of $349 million. The company's growth profile is further highlighted by a Rule-of-40 calculation, showing a forward annual revenue growth rate of 35% combined with an operating profit margin of 16%.

Analyst Outlook

Wall Street analysts maintain a bullish long-term outlook on Figma, anticipating a rebound once fears regarding a sector-wide downturn subside. JPMorgan analysts have set a price target of $42, implying a potential upside of 125% from current levels. Analysts at Royal Bank of Canada and Piper Sandler have set targets of $30, while other bullish notes have come from Goldman Sachs and Oppenheimer. These analysts argue that Figma has established an essential position in the design sector that would be difficult to replace.