Following Figma's robust fourth-quarter earnings, prominent investment banks Stifel and Morgan Stanley have recalibrated their financial outlooks for the design software company. Despite reporting better-than-anticipated results and strong revenue guidance for the upcoming fiscal year, both firms have opted to lower their price targets. This decision reflects a nuanced perspective on Figma's future, balancing impressive growth metrics with potential concerns regarding profitability and operational efficiency.

On February 19, Stifel announced a revised price target for Figma, bringing it down from $40 to $30, while simultaneously reiterating its 'Hold' recommendation for the stock. This adjustment came directly after Figma released its fourth-quarter financial performance. According to Stifel's analysis, Figma's Q4 outcomes and its revenue projections for 2026 significantly surpassed market expectations, leading to an initial positive reaction in after-hours trading. However, the firm indicated a need for further clarity regarding the anticipated impact on profit margins and the specific timeline and magnitude of increased consumption once credit limits are implemented in March.

Concurrently, Morgan Stanley also adjusted its price target for Figma on the same day, moving it from $48 to $44, and sustained its 'Equal Weight' rating. An analyst from Morgan Stanley highlighted a remarkable 70% quarter-over-quarter surge in weekly active users for Figma's 'Make' tool. This surge played a crucial role in re-accelerating Figma's revenue growth to over 40% in the fourth quarter. Nevertheless, the analyst observed that substantial upward revisions in revenue forecasts were counteracted by downward pressure on free cash flow, primarily attributable to a projected reduction in operating margin.

Figma, Inc. (NYSE: FIG) is recognized as a premier collaborative design platform powered by artificial intelligence, empowering teams to conceptualize and develop digital products. Its comprehensive suite of tools includes Figma Design, FigJam, Dev Mode, Figma Slides, Figma Sites, Figma Buzz, Figma Draw, and Figma Make, all designed to streamline and enhance the design workflow.

These adjustments by leading financial institutions underscore a cautious yet appreciative view of Figma's market position. While the company demonstrates strong product adoption and revenue generation, analysts are closely monitoring how these operational successes will translate into sustainable long-term profitability and shareholder value amidst evolving market dynamics and internal cost structures.