• Piper Sandler called Figma’s first quarter report “impressive,” and Morgan Stanley cheered revenue growth for the second consecutive quarter.
• First-quarter revenue surged 46% to $333.4 million, ahead of the $316 million consensus estimate polled by Fiscal AI.
• For the full year, the revenue forecast was increased to $1.42 billion and $1.43 billion, from $1.36 billion to $1.37 billion.

Figma (FIG) shares surged in pre-market trading after the Adobe rival posted a strong first-quarter earnings and raised its full-year outlook. Analysts have revised their price targets and said the earnings report helps ease concerns that AI competition could pressure near-term growth.

At the time of writing, FIG stock was up 10% in premarket trading on Friday and on track for its best one-day gains in a month.

Analyst Takeaway

Piper Sandler called the first quarter (Q1) report “impressive” and pointed out that the second quarter (Q2) revenue growth guidance midpoint of 40% year-over-year was a sizable nine points ahead of consensus, effectively pushing back on the view that AI competition will materially impact the growth rate in the near term, per The Fly.

The firm continues to believe Figma is one of the few app-layer names that can deliver strong upside to numbers. They maintained their ‘Overweight’ rating on FIG stock and trimmed price target by $5 to $30, now implying an upside potential of over 48%.

Morgan Stanley cheered the company’s second straight quarter of accelerating revenue growth, driven by seat expansion, paid customer conversion, and new credit monetization, TheFly reported. It also noted that first quarter (Q1) results "provide a strong case for Figma's positioning in AI."

However, the firm still believes competitive dynamics surrounding the company and near-term gross margin pressures may limit upside in the shares. The firm maintained its ‘Equal Weight’ stance and lowered price target by $6 to $38, now implying an upside potential of nearly 88%.

FIG Q1 Results At A Glance

For Q1, revenue surged 46% to $333.4 million, ahead of the $316 million consensus estimate polled by Fiscal AI. Adjusted net income per share came in at $0.10, comfortably beating the $0.06 per share expectation.

For the full year, the revenue forecast was increased to $1.42 billion and $1.43 billion, from $1.36 billion to $1.37 billion, ahead of the $1.37 billion estimate.

What Retail Thinks About FIG

On Stocktwits, retail sentiment about FIG turned ‘extremely bullish' from ‘bullish’ amid a more than fivefold increase in message volumes over the last 24 hours.

One user on the platform noted the current rally in shares and expects it to trade in green for the whole of next week.

Another user thinks the stock will hit $26 in Friday’s trading session.

FIG stock has lost roughly over 46% in value so far this year and over the past 12 months, underperforming the S&P 500.

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