Figma Inc. (NYSE:FIG) shares continued their upward momentum on Wednesday, trading 2.4% higher at $27.78 in the afternoon session. The stock has gained 14.2% since Friday's close, as investors position ahead of the company's second-quarter earnings report, due after the market closes today. However, a significant overhang looms: a lock-up expiration set for Friday could release as many as 77.7 million shares into the market, potentially creating selling pressure.
Based on Wednesday's price, that block of shares is valued at approximately $2.16 billion, representing about 14.8% of Figma's outstanding shares as of the March quarter. This volume is 3.6 times the stock's 65-day average trading volume, which could exacerbate any selloff if shareholders choose to exit. While holders are not obligated to sell, the filing suggests that actual or anticipated sales could weigh on the share price.
Despite the looming unlock, the stock's recent rally has narrowed the gap to the average analyst price target of $30.44, leaving just 9.6% upside from current levels. The analyst community remains cautiously optimistic, with nine analysts rating the stock a Hold and six recommending Buy, resulting in a consensus Overweight rating. The median target stands at $30, with a high of $38 and a low of $22.
On the earnings front, the bar appears relatively modest. Figma's guidance for second-quarter revenue is set between $348 million and $350 million, while the preliminary consensus estimate sits at $351.5 million, a 0.7% increase over the midpoint. Adjusted earnings are projected at $0.04 per share. For the full year, the company expects revenue in the range of $1.422 billion to $1.428 billion, against a consensus of $1.44 billion, implying a 1.1% upside.
The company enters the report with strong operational momentum. First-quarter revenue surged 46% year-over-year to $333.4 million, while net dollar retention reached 139%, its highest level in over two years. Free-cash-flow margin stood at 27%, and paid customers grew 54% to nearly 690,000. Notably, clients with at least $100,000 in annual recurring revenue rose 48% to 1,525. CEO Dylan Field encapsulated the company's ethos: “When code is a commodity, design is the competitive edge.”
AI monetization is emerging as a key growth driver. In April, over 75% of organizational and enterprise users who exceeded their credit limits continued to use credits, with more than 95% remaining active. Additionally, Pro teams that purchased extra credits delivered average recurring revenue more than triple that of teams that did not. BofA Securities analyst Tal Liani views AI as “more likely a tailwind, not a headwind,” maintaining a Buy rating with a $30 price target, implying roughly 8% upside.
Valuation remains a point of debate. Figma trades at approximately 10.9 times annualized sales, a significant premium to peers such as Adobe (NASDAQ:ADBE) at 3.9x and monday.com (NASDAQ:MNDY) at 3.2x. This premium sets high expectations, and any disappointment in customer retention, AI-credit sales, or full-year guidance could offset a revenue beat.
The lock-up expiry adds a technical overhang. With shares becoming eligible for sale starting Friday, August 7, the second session after the earnings release, trading volume on that day will be a key indicator of whether the unlock translates into actual market supply. Additionally, first-quarter technical infrastructure and hosting costs rose by $33.7 million, driven by AI and increased platform activity, which could pressure margins if not offset by revenue growth.
Investors will be watching several metrics closely: revenue versus the $351.5 million consensus, retention versus the 139% benchmark, and any updates to the full-year guidance. The combination of cautious guidance and the lock-up expiration could heighten volatility in the near term.
