Goldman Sachs trims Figma target to $30 despite strong Q1 earnings
Figma reported a 46% jump in first-quarter revenue, beating street estimates and driving a 13% share price rise, but Goldman Sachs compressed its valuation multiple due to competitive pressures.
Goldman Sachs has lowered its 12-month price target for Figma (FIG) to $30 from $35, maintaining a Neutral rating following the design software company’s first-quarter 2026 earnings report. The revision comes despite Figma delivering revenue of $333.4 million, a 46% year-on-year increase that surpassed Wall Street expectations and triggered a 13% surge in the stock’s session price.
The analyst firm cited competitive threats from AI-native design tools as the primary driver for compressing its valuation multiple from 13x to 10x EV/sales. While the lower price target reflects a recalibration of peer multiples rather than a deterioration in fundamental view, Goldman Sachs acknowledged that the quarter was genuinely strong, with AI monetization emerging faster than anticipated.
Figma’s financial performance exceeded consensus across several key metrics. Revenue accelerated from 40% growth in the fourth quarter of 2025, while non-GAAP operating income reached $52.1 million with a 16% margin. The company also reported a net dollar retention rate of 139%, the highest level in over two years, alongside a 54% year-on-year increase in total paid customers to approximately 690,000.
Contrary to bearish narratives suggesting AI tools are eroding demand for collaborative design platforms, Figma’s data indicates AI engagement is driving user expansion. Approximately 60% of high-value paid customers used Figma Make weekly in the first quarter, up from 50% in the prior period. Furthermore, customers utilising the company’s Model Context Protocol server grew their full seats approximately 70% faster than those not using the integration.
In response to the robust results, Goldman Sachs raised its full-year 2026 revenue estimates by $55 million, now modelling $1.428 billion for the year. The firm noted that while gross margins missed estimates by 110 basis points due to early-stage AI inference costs, the gap between revenue growth and gross profit growth is expected to compress as monetisation scales through enforced credit limits.
