Figma Inc, a prominent player in cloud-based design and collaboration software, saw its stock price decrease in Tuesday morning trading sessions as concerns about international trade frictions resurfaced. Investors appeared to shift away from high-growth software equities following announcements concerning new tariffs imposed by the United States on several European nations.
President Donald Trump announced via social media that commencing February 1, multiple European countries including Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland would be subject to a 10% tariff on all goods exported to the United States. Alongside this, the President intensified discussions regarding the possibility of incorporating Greenland as a U.S. territory.
Although Figma operates predominantly in providing cloud-based software solutions rather than tangible goods, market participants appear apprehensive that such geopolitical developments could dampen information technology expenditures and increase regulatory risks affecting U.S.-based SaaS providers, especially those deeply embedded in European markets.
Figma has established a substantial clientele among product and user experience design teams across Northern Europe, the UK, and the DACH region (Germany, Austria, and Switzerland). Its flagship offerings, including a browser-utilized design platform and the FigJam whiteboarding tool, are heavily utilized by companies in consumer internet, financial technology, and industrial sectors. The firm's subscription model, which is seat-based, makes it particularly sensitive to organizational hiring freezes, postponed digital transformation initiatives, and budgetary constraints within European client organizations.
Any contraction in the European technology or manufacturing sectors may lead to diminished numbers of paid user seats, slower expansion within existing accounts, and extended enterprise sales cycles for Figma. All these factors collectively threaten to impair the company's top-line revenue growth.
Investors have shown heightened sensitivity to firms with rapid revenue expansion and continued reinvestment in research and development, such as Figma. The risk of global macroeconomic uncertainties leading to tightened expenditure on software solutions has pressured valuation multiples across the design and collaboration software sector. The tariff announcement exacerbated fears of a growing trade conflict with major European economies, which in turn has exerted downward pressure on Figma's share price during the trading session.
Technically, Figma's stock is trading well below its prominent moving averages, signaling bearish momentum in the near term. The company’s shares dropped approximately 5.8% on Tuesday, underperforming relative to the Technology sector decline of 2.3% and the broader S&P 500 index loss of 1.9%. While the stock has achieved a 31.32% return over the past 12 months, its current price level is significantly nearer to the 52-week low point rather than its annual high, indicating prevailing volatility.
Examining momentum indicators, the Relative Strength Index (RSI) is positioned at a neutral level, suggesting the stock is neither overbought nor oversold at present. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator lies below its signal line, pointing to bearish pressure. This combination of neutral RSI and bearish MACD reflects a state of mixed price momentum for Figma.
From a technical analysis perspective, key resistance for Figma’s stock price stands near $30.00 per share, while support is identified around the $25.00 level.
Looking ahead, investors are anticipating Figma's upcoming earnings release scheduled for March 3. The company is expected to report a loss per share of 4 cents, with analysts forecasting revenues near $293.12 million.
The current analyst consensus on Figma remains a Buy rating, with the average price target approximating $37.17. Nonetheless, recent brokerage actions have demonstrated some divergence: Morgan Stanley recently lowered its price target to $48.00 while maintaining an Equal-Weight rating; Stifel initiated coverage with a Hold rating at a $40.00 target; Wells Fargo upgraded its position to Overweight with a $52.00 target.
According to Benzinga Edge rankings, Figma exhibits weaknesses in momentum and valuation metrics, scoring 25 out of 100 for momentum—indicating underperformance relative to the market—and 20 out of 100 for value, signifying a premium valuation versus peers. The company's quality score is neutral at 50 out of 100, reflecting balance sheet stability without exceptional characteristics. Overall, these rankings suggest that while Figma maintains some financial solidity, the stock is experiencing challenges from investor sentiment and relative valuation standpoints.
At the time of reporting, shares of Figma had declined approximately 6.29% to $27.71, consistent with the pressures observed throughout the trading session.