FIG · Figma
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $22.73
Note written ·
Price against the kill line
14.4% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $22.73, on record since 11 November 2026. The shares are down 22.2% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $22.73, which sits above the 200-day moving average and would show the shares leading the S&P 500. A fourth-quarter result with revenue above the $404 million top of the guide and net dollar retention back at or above 136% would also show it.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 4 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 391
- Revenue, change on a year (%)
- +42.8
- Gross margin (%)
- 80.3
- Operating margin (%)
- −30.4
- Free cash flow, four quarters ($M)
- 224
- Net cash, cash less debt ($M)
- 1,720
- Enterprise value to sales (×)
- 6.2
- Free-cash-flow yield (%)
- 2.2
All filed numbers
What Figma reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 391 | +42.8 | 80.3 | −30.4 |
| first filed | 370 | +48.2 | 83.7 | −31.7 |
| first filed | 333 | +46.1 | 79.4 | −41.2 |
| first filed | 304 | +40.0 | 82.1 | −64.4 |
| first filed | 274 | +38.0 | 69.4 | −414.6 |
| first filed | 250 | +40.9 | 88.8 | 0.8 |
| Pre-tax income ($M) | −71.9 |
| Net income ($M) four quarters: −563 | −81.3 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +32.0 |
| Operating cash flow ($M) | 247 |
| Capital spending ($M) | 22.1 |
| Free cash flow ($M) | 224 |
| Cash and short-term investments ($M) | 1,720 |
| Debt ($M) | None reported |
| Net cash, cash less debt ($M) no debt reported | 1,720 |
| Deferred revenue ($M) +32.3% on a year | 627 |
| Backlog, orders not yet delivered ($M) +31.0% on a year | 678 |
| Receivables ($M) | 213 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 1,544 |
| Market value ($M) | 10,356 |
| Enterprise value, market value plus net debt ($M) no debt reported | 8,635 |
| Enterprise value to sales (×) no debt reported | 6.2 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 6.7 |
| Free-cash-flow yield (%) | 2.2 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 7.0% of shares outstanding sold short, 3.9 days of average trading to cover, −9.2% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $10.8M |
| 12 monthsfrom | $36.5M | $248.5M |
The thesis
Figma's shares are more likely to lag the S&P 500 than lead it over the next three months. Revenue is beating guidance, but the cost of the company's artificial intelligence (AI) push now shows in margins and retention, and the fourth-quarter 2026 report, expected around February 2027, is the first test of whether cheaper AI credits repay that cost through usage.
The third-quarter report on 4 November 2026 showed revenue of $391.4 million, up 43% from a year earlier, against guidance of $373.0 million to $375.0 million (Benzinga; Earnings Whispers via Finviz). Non-GAAP (adjusted) gross margin fell to 82% from 85% in the second quarter, and net dollar retention fell to 131% from 136% (Earnings Whispers via Finviz, 4 November 2026). The shares closed at $18.92 on 12 November 2026, down 25.6% over three months and 58.3% below the 52-week intraday high of $45.42 set on 12 November 2025. The market already prices in a sharp slowdown: the fourth-quarter guide implies growth of roughly 33%, against 43% in the third quarter.
Bullish and bearish views on Figma, Inc.
The bull case on Figma, Inc. (FIG), in brief: revenue beat by a wide margin. The bear case: gross margin fell three points.
Bull case
- Revenue beat by a wide margin. Third-quarter revenue of $391.4 million exceeded the top of guidance by $16.4 million (company results, 4 November 2026). Second-quarter growth was 48%; third-quarter growth was 43%.
- Guidance was raised. Full-year 2026 revenue guidance rose to $1.497 billion–$1.499 billion, and fourth-quarter guidance of $402 million–$404 million compares with a $390.2 million estimate (Benzinga, 4 November 2026).
- Profit outlook improved. The full-year non-GAAP operating income outlook rose to $158 million–$163 million from $125 million–$135 million (Earnings Whispers via Finviz, 4 November 2026). Third-quarter free cash flow was $41.5 million.
- AI usage is climbing. Weekly AI credit consumption rose 2.5 times through 31 October 2026, and management said the August repricing lifted add-on utilization about 40% (third-quarter earnings call, 4 November 2026).
- Large customers keep growing. Customers above $100,000 in annual recurring revenue reached 1,717, up from 1,635 at 30 June 2026 (Earnings Whispers via Finviz; company results, 5 August 2026).
- One major analyst stays positive. Citigroup kept a Buy rating on 6 November 2026 and lowered its target to $34 from $35 (Benzinga).
Bear case
- Gross margin fell three points. Non-GAAP gross margin was 82% in the third quarter, against 85% in the second quarter and 86% a year earlier (Earnings Whispers via Finviz, 4 November 2026).
- Retention is sliding. Net dollar retention was 131%, down from 136% in the second quarter and 139% in the first. Management said on the 4 November 2026 call that the August credit repricing could weigh on it near term.
- Guidance implies a growth step-down. The fourth-quarter revenue guide of $402 million–$404 million implies roughly 33% growth, against 43% in the third quarter (Finviz, 4 November 2026).
- Cash generation weakened. Free cash flow was $41.5 million, an 11% margin, down from 14% in the second quarter and 18% a year earlier (Earnings Whispers via Finviz, 4 November 2026).
- Price targets keep falling. JPMorgan (Neutral) and RBC Capital (Sector Perform) each lowered their targets to $24 on 5 November 2026. Rothschild & Co Redburn initiated at Neutral with a $23 target on 2 November 2026 (Benzinga).
- Executives are selling. The general counsel sold 11,599 shares at $21.30 on 3 November 2026, and the chief accounting officer sold 2,214 shares at an average of $21.63 on 3 November 2026 and 4 November 2026, both under Rule 10b5-1 plans (SEC Form 4 filings, 5 November 2026).
Price setup
The shares closed at $18.92 on 12 November 2026. After the report they fell to $18.44 on 5 November 2026 and have since traded between $18.44 and $19.40 (the 9 November 2026 close). The 52-week closing low is $16.84, reached on 25 June 2026.
The last close is below both the 50-day average of closes ($21.96) and the 200-day average of closes ($22.67), so the shares sit under every major trend measure. The analyst targets of $23 (Redburn) and $24 (JPMorgan and RBC) all sit above the price. They show where these firms see fair value, not a floor under the shares.
The 3-month reference close was $25.42 on 14 August 2026. No earnings report falls inside the next 30 days, so the next scheduled company disclosure is the fourth-quarter report.
Catalysts ahead
- ~February 2027 (est.): Fourth-quarter 2026 earnings report. Tests the $402 million–$404 million revenue guide and shows whether non-GAAP gross margin and net dollar retention recover after the AI credit repricing.
What would change the view
A daily close above $22.73, which sits above the 200-day moving average and would show the shares leading the S&P 500. A fourth-quarter result with revenue above the $404 million top of the guide and net dollar retention back at or above 136% would also show it.
What it trades with
Figma trades with growth software and with the debate over whether AI tools disrupt design and productivity software. The July selloff in recently listed companies and the October target cuts moved with that group. Its multi-class share structure and heavy stock-based compensation make insider and holder supply a recurring factor: stock-based compensation was $147.6 million in the second quarter of 2026, against $36.1 million of non-GAAP operating income.
The evidence, claim by claim (8)
- Third-quarter 2026 revenue was $391.4 million, up 43% from a year earlier, against guidance of $373.0 million to $375.0 million. Figma third-quarter 2026 results; Benzinga · as of
- Non-GAAP gross margin was 82% (85% in the second quarter); net dollar retention was 131% (136% in the second quarter, 139% in the first). Earnings Whispers via Finviz · as of
- Fourth-quarter 2026 revenue guidance is $402 million to $404 million against a $390.188 million estimate; full-year revenue guidance was raised to $1.497 billion–$1.499 billion. Benzinga · as of
- Full-year non-GAAP operating income outlook was raised to $158 million–$163 million from $125 million–$135 million; third-quarter free cash flow was $41.5 million. Earnings Whispers via Finviz · as of
- Weekly AI credit consumption rose 2.5 times through 31 October 2026; the August repricing lifted add-on utilization about 40%. Third-quarter 2026 earnings call, via Finviz and Tech-Insider · as of
- JPMorgan (Neutral) and RBC Capital (Sector Perform) each lowered their price targets to $24. Benzinga analyst actions · as of
- Citigroup maintained Buy and lowered its target to $34 from $35. Benzinga analyst actions · as of
- General Counsel Brendan Mulligan sold 11,599 shares at $21.30 on 3 November 2026 under a Rule 10b5-1 plan. SEC Form 4 filed 5 November 2026 · as of
Sources
- Finviz ·
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