Could December Be the Turning Point for This Beaten-Down Tech Stock?

By Will Healy – Dec 17, 2025 at 3:46PM ESTKey PointsFigma has built a competitive advantage around collaborative design software.Stock-based compensation is causing continued net losses.It is unclear whether its valuation is at a level that can attract buyers.These 10 Stocks Could Mint the Next Wave of Millionaires ›NYSE: FIGFigmaMarket Cap$18BToday's Changeangle-down(4.09%) $1.47Current Price$37.41Price as of December 17, 2025 at 3:58 PM ETShares of the collaborative design software maker are down more than 75% from their 52-week high.Figma (FIG +4.09%), a maker of design software, has endured a brutal period following its initial public offering (IPO). Since peaking at an intraday high of almost $143 per share in August, the stock has dropped precipitously. Today, at around $34 per share, it has lost over three-fourths of its value from its high and is close to its July IPO price of $33 per share. However, investors may take comfort in the fact that it established a low almost one month ago and has traded in a range since that time. Knowing that, could December be a turning point for Figma, or should investors expect more pain? Image source: Getty Images.

Understanding Figma Figma's stock attracted its initial interest because it leads a niche in collaborative design tools. The company's software helps teams create user interfaces and user experiences for apps and websites. Not surprisingly, artificial intelligence (AI) has played a key role in its success. Thanks to its AI tools, users can more easily create layouts, graphics, and interactive prototypes in seconds and then refine them in its visual editor. And Figma offers a key competitive advantage over similar products through collaboration, allowing multiple users to work on a file simultaneously. This keeps all parties informed of changes, which increases efficiency and, in many cases, can foster higher levels of creativity.Advertisement So powerful is this tool that Adobe tried to buy Figma. After antitrust regulators in Europe pushed Adobe to abandon the prospective merger, Figma remains the market leader. Growth prospects Still, as previously mentioned, the challenge with Figma may be profiting from investing in the stock. It benefited from a great deal of hype initially, but amid a significant pullback, investors appear to have decided the original IPO price was appropriate for the stock. The struggle may stem from what are likely mixed feelings about its financials. In the first three quarters of 2025, its revenue of $752 million increased by 41% compared to the same period in 2024. Nonetheless, while that sounds impressive, Figma lost just over $1 billion in the first nine months of 2025, more than the net loss of $830 million in the same year-ago period. The silver lining in this is that its stock-based compensation, a noncash expense, was more than $1.1 billion, $976 million of which was in the third quarter. That means Figma is probably generating enough cash to cover operational costs, since its free cash flow for the first three quarters was $204 million. Still, while that expense may not cost the company cash, it potentially dilutes shareholders, which could still hurt the stock. ExpandNYSE: FIGFigmaToday's Change(4.09%) $1.47Current Price$37.41Key Data PointsMarket Cap$18BDay's Range$35.86 - $37.8052wk Range$32.83 - $142.92Volume208KAvg Vol9.3MGross Margin85.74% Furthermore, investors may struggle with what to make of Figma's valuation. As a money-losing company, it does not have a price-to-earnings ratio (P/E), but amid the falling stock price, its price-to-sales ratio (P/S) is 17. Although that is not an unusual level for a growth stock, investors should remember that the S&P 500's average P/S ratio is around 3.5. Hence, the question for investors is whether it has fallen far enough to stoke a recovery. Is a turning point near? Although December could become a turning point for Figma stock, no such evidence has yet appeared. In a sense, it's encouraging that the stock's value has plateaued near the IPO price. That could create the sense that investors can now buy Figma at a fair price. Moreover, a meaningful improvement in its product or financial situation could prompt investors to buy. However, no such catalyst has become apparent. And investors are also probably right to feel concerned about the company's huge stock-based compensation. Even though losses primarily involve noncash expenses, it creates the potential for meaningful stock price dilution. Ultimately, the power of Figma's software should continue to boost revenue and eventually the stock price. Nonetheless, at its current valuation, the company is likely in need of either a meaningful catalyst or at least a better handle on its stock-based compensation expenses before the shares recover.About the AuthorWill Healy is a contributing Motley Fool stock market analyst covering technology and consumer goods industries.

Before The Motley Fool, Will was a freelance writer covering stocks and personal finance for MSN Money, Yahoo! Finance, and Nasdaq. Earlier in his career, he was an expert in geographic information systems, applying spatial and IT skills to perform RF and demographic analysis in the telecom industry. He holds a bachelor’s degree in journalism from Texas A&M University and an MBA in finance and strategy from the University of Texas at Dallas.TMFWillHealyX@HealyWritingRead NextDec 11, 2025 •By Parkev Tatevosian, CFAShould Investors Buy Figma Stock Before 2026?Dec 2, 2025 •By Justin PopeIs This AI Stock the Best Bargain on the Market Right Now?Dec 1, 2025 •By Jeremy BowmanWhy Figma Stock Fell 28% in NovemberNov 28, 2025 •By Jeremy BowmanMy 2 Favorite Stocks to Buy NowNov 28, 2025 •By Harsh ChauhanWhere Will Figma Stock Be in 1 Year?Nov 26, 2025 •By Catie HoganIs Now the Time to Buy Figma Stock?