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Forbes
3 days ago
- Business
- Forbes
How Figma Stock Doubles To $160
Interface design software company Figma (NYSE:FIG) has had a rocky ride over the last few weeks, despite a stellar debut on the public markets last month. While the stock soared by more than 3x its IPO price of $33 to close at $115.50 per share on its first trading day, the stock has since corrected to about $80 per share currently. Yes, the stock is already running hot, trading at about 37x estimated 2025 revenues and about 29x estimated FY'26 sales. But execution has been strong, and several tailwinds could still fuel upside - it combines several in-demand trends: software-as-a-service tools, collaborative product design, and a big push into generative artificial intelligence. In this article, we look at how the stock could roughly double to $160 per share. Revenue Growth The company's financial growth has been explosive. Revenues surged from under $100 million in 2021 to $749 million in 2024. In the March quarter, Figma posted $228.2 million in revenue, up 46% year-over-year, putting it on a $913 million annualized run rate. Consensus estimates call for about $1.1 billion in revenue for this fiscal year. If Figma can maintain about 35% annual growth over the next four years, sales could approach $3.7 billion by FY'29. There are a couple of factors that could support this high growth rates. Customers seem to be highly engaged with the company's offerings. Net Dollar Retention was 132%, indicating that existing customers are spending 32% more each year - a strong signal of product stickiness and expansion. Figma's pricing is seat-based, depending on the role - designer, developer, or viewer - and it benefits from a product-led growth strategy where adoption often begins with a single designer and then spreads organically across the organization. This approach minimizes customer acquisition costs and apparently shortens the sales cycle. Originally built for web and mobile interface design, Figma is now pushing into broader collaboration tools: presentations, no-code web development, and cross-functional workflows. This expansion could open up a much larger market beyond its design roots. Separately, here's a closer look at Key risks for Figma stock. How Profitability Accelerates Figma is also now generating profits, with net income over the last quarter standing at $44.9 million on $228 million in revenues, translating into a close to 20% net margins. Net margins could eventually keep trending higher, as sales grow, given the strong operating leverage SaaS companies have. If net margins can gradually grow to 30% by FY'29, profits could approach $1.1 billion by 2029. That's a big number, but it is achievable. For comparison, Adobe's net profit margins have stood at a little over 30% in recent quarters. Moreover, Figma has been running a pretty tight ship. It recently clocked gross margins of about 90% and has a strong subscription model, fueling expansion. The company also maintains a balanced cost structure, with R&D spend nearly equal to sales and marketing, suggesting a disciplined focus on product innovation over aggressive selling. This is in contrast with many other young software as a service providers who spend disproportionately on sales and marketing, rely on top-down, enterprise-focused sales strategies. This should make strong margin expansion a real possibility in the coming years. Talking Multiples Trading at over 37x estimated 2025 run-rate revenue, Figma's valuation is well above that of mature peers like Adobe, which trades at around 7.5x forward sales. However, as the company evolves and posts consistent annual profits, the price-to-earnings (P/E) multiple becomes a more useful yardstick. If sales rise to about $3.7 billion with profits of roughly $1.1 billion, the valuation math changes. For comparison, data warehousing software major Snowflake currently trades at about 175x FY'26 earnings and about 125x forward earnings, while posting revenue growth of under 25% annually. More niche work management platform, Asana trades at about 60x forward earnings despite posting single-digit revenue growth rates. Considering this, it's not a stretch to give Figma a 70x P/E multiple, which would translate into a market cap of about $77 billion, a little less than 2x the current $40 billion. Sure, stock-based compensation and fresh equity issuance will cause dilution, but the broader upside thesis still holds. Of course, several things need to fall into place. A key factor will be whether Figma can become indispensable across the workplace, not just for designers but also for software developers, marketers, product managers, and other teams. The company also needs to hold its ground against intensifying competition and improve margins at the same time. Microsoft (NASDAQ:MSFT) is bundling design tools into Office 365, Canva is rapidly broadening its suite, and AI-native tools from the likes of OpenAI could reshape workflows and reduce dependence on traditional design platforms. See Microsoft's revenue breakdown. What about the time horizon? Whether this scenario plays out over three or four years may not matter much, as long as Figma stays on its revenue expansion trajectory with margins trending higher, the stock could respond similarly in either case. While Figma stock has great potential, investing in individual stocks can be risky. As an alternative, the Trefis Reinforced Value (RV) Portfolio has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
Yahoo
5 days ago
- Business
- Yahoo
Azvalor Managers FI Makes Significant Moves with Barrick Mining Corp
Exploring the Strategic Portfolio Adjustments in Q2 2025 Azvalor Managers FI (Trades, Portfolio) recently submitted its report for the second quarter of 2025, revealing strategic investment decisions that reflect its commitment to identifying global opportunities. Azvalor Managers FI (Trades, Portfolio) is a tax-transferable UCITS fund that invests at least 75% of its assets in equities. The fund's portfolio spans companies of various sizes, regions, and sectors, all listed on public markets. By delegating investments to specialist managers, Azvalor Managers FI (Trades, Portfolio) seeks to uncover the best investment opportunities worldwide. Summary of New Buy Azvalor Managers FI (Trades, Portfolio) added a total of 43 stocks, with the most significant addition being Barrick Mining Corp (NYSE:B). The fund acquired 129,635 shares, which now account for 3.38% of the portfolio, with a total value of $2.699 million. The second-largest addition was Alibaba Group Holding Ltd (HKSE:09988), consisting of 81,145 shares, representing approximately 1.22% of the portfolio, with a total value of HK$976,000. The third-largest addition was Valterra Platinum Ltd (LSE:VALT), with 25,213 shares, accounting for 1.17% of the portfolio and a total value of 932,000. Key Position Increases Azvalor Managers FI (Trades, Portfolio) also increased stakes in a total of 93 stocks. The most notable increase was in Tencent Holdings Ltd (HKSE:00700), with an additional 28,919 shares, bringing the total to 32,051 shares. This adjustment represents a significant 923.34% increase in share count, a 1.99% impact on the current portfolio, with a total value of HK$1,766,000. The second-largest increase was in Pop Mart International Group Ltd (HKSE:09992), with an additional 33,176 shares, bringing the total to 44,343. This adjustment represents a significant 297.09% increase in share count, with a total value of HK$1,295,000. Summary of Sold Out Azvalor Managers FI (Trades, Portfolio) completely exited 32 holdings in the second quarter of 2025. Notably, the fund sold all 105,677 shares of Barrick Mining Corp (TSX:ABX), resulting in a -3.12% impact on the portfolio. Additionally, Azvalor Managers FI (Trades, Portfolio) liquidated all 58,022 shares of Enerflex Ltd (TSX:EFX), causing a -0.76% impact on the portfolio. Key Position Reduces Azvalor Managers FI (Trades, Portfolio) also reduced positions in 91 stocks. The most significant changes include a reduction in Algoma Steel Group Inc (NASDAQ:ASTL) by 55,145 shares, resulting in a -40.55% decrease in shares and a -0.73% impact on the portfolio. The stock traded at an average price of $5.58 during the quarter and has returned -28.18% over the past 3 months and -53.66% year-to-date. Additionally, the fund reduced NMI Holdings Inc (NASDAQ:NMIH) by 9,740 shares, resulting in a -45.17% reduction in shares and a -0.47% impact on the portfolio. The stock traded at an average price of $37.55 during the quarter and has returned 3.46% over the past 3 months and 7.51% year-to-date. Portfolio Overview As of the second quarter of 2025, Azvalor Managers FI (Trades, Portfolio)'s portfolio included 227 stocks. The top holdings included 3.38% in Barrick Mining Corp (NYSE:B), 2.21% in Tencent Holdings Ltd (HKSE:00700), 1.79% in M/I Homes Inc (NYSE:MHO), 1.71% in Iamgold Corp (NYSE:IAG), and 1.68% in Hudbay Minerals Inc (NYSE:HBM). The holdings are mainly concentrated in 10 of the 11 industries: Basic Materials, Energy, Consumer Cyclical, Industrials, Financial Services, Real Estate, Technology, Communication Services, Healthcare, and Consumer Defensive. This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein. This article first appeared on GuruFocus. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
05-08-2025
- Business
- Yahoo
UK taxpayers ‘subsidising' S&P 500, says LSEG boss
Tax breaks should be used to encourage domestic investment in public markets, the London Stock Exchange Group's (LSEG.L) chief executive has said. Westminster is seeking to reform pension rules to encourage large pools of capital to invest in domestic equities. Chancellor Rachel Reeves has sought to force pension funds to invest in UK companies, as a means to stimulate economic growth, in a contentious move toward mandation. 'We're not advocating for a mandate," David Schwimmer, CEO of the London Stock Exchange Group (LSEG.L), said in an interview with Yahoo Finance UK's Market Sunrise show. He explained that UK pension funds have historically decreased their allocations to UK-listed assets "dramatically", from over 40% to just 4% over the past 25 years. Schwimmer argued that pension funds should allocate a minimum percentage of their investments back into UK markets, particularly given the tax benefits they receive. "The issue is that the pension funds get £49bn a year in tax benefits from the government, from UK taxpayers," Schwimmer said. "If they are getting those tax benefits and then they're investing in US equities, you basically have the UK taxpayer subsidising the cost of capital in, I'll say, the S&P 500 (^GSPC), which doesn't make a ton of sense from a policy perspective." While Schwimmer did not advocate for a mandate, he suggested that "it's reasonable to have those tax benefits that the pension funds are currently getting be conditional on some kind of minimal threshold investment in the domestic background. I'll throw out 10% but I'll let the policy experts figure out what the right number is." Read more: What is the Pension Investment Review? Earlier this year, Reeves had suggested the introduction of a 'backstop' power that would compel pension funds to invest in British assets if necessary. Her proposals gained some traction, with 17 pension funds agreeing under the Mansion House Accord to allocate at least 5% of their assets to the UK by 2030. This commitment includes giving the government the power to enforce domestic investment in the event that voluntary contributions fall short. The reforms will form part of the Pension Schemes Bill, which is about to go before parliament. The new approach would mean over £50bn of additional investment in UK infrastructure, new homes and businesses, the Treasury said. London's IPO struggles amid New York allure The UK's declining IPO activity has been a persistent issue, with the number of listings at the London Stock Exchange falling to a 30-year low. But Schwimmer acknowledged that the broader global trend has seen a dip in listings, especially with the rise of private capital. "The number of listings on a global basis has declined. In New York, for example, the number of listings is down by 40% over the last 10 years or so," he added. The UK has been working to reform its listings regime to make the market more attractive. "If you go back a few years, there were some rules that were probably overly conservative and hadn't really moved along with how markets were operating around the world," Schwimmer said, referring to changes like the acceptance of dual-class share structures and the loosening of free float requirements for new listings. "All these different aspects have been viewed as very attractive and helpful, so we are now actually seeing a growing pipeline and an increasing number of companies looking to list here," he added. Read more: London IPO fundraising slumps in blow to UK Despite these efforts, Schwimmer admitted that the UK market still faces intense competition from other exchanges, particularly New York, which has seen a resurgence in listings in 2025. Schwimmer was quick to point out, however, that not all companies are suited for the US market. 'There are many companies where it does not make sense to list or go to New York," he said. "In the past 10 years, 20 companies or so have gone from the UK and listed in New York and raised over $100m. Of that 20, three of them have their stock trading up. Of the rest, I think eight of them have delisted, and the remainder are trading down like 70% or so." He also pointed out that many companies, particularly smaller ones, benefit from the personalised attention they receive in London in contrast to the more crowded US market. "They don't get the right attention from investors, from research analysts." For these companies, Schwimmer argued, "it makes much more sense to be listed and trading in the UK." Despite the challenges facing the UK market, Schwimmer remains confident in London's long-term position as a global financial hub. While the number of listings may be down, the capital's strength lies in its international appeal. "London is by far the leading stock exchange in Europe, and it is also the most international financial centre, attracting capital from the UK, US, EU, the Middle East and Asia," Schwimmer said. He acknowledged that New York's appeal cannot be dismissed but argued that for many companies, London is "absolutely" is better. 24-hour trading under discussion When asked about the potential for 24-hour trading at the London Stock Exchange, Schwimmer said that while nothing has been decided yet, LSEG is actively exploring the idea. "We are looking at whether we should be changing our hours. We haven't made any decisions, and anything that we would do would happen in consultation with the market, our users, and of course, we would work closely with the regulators," he said. "Nothing has been decided at this point, but it's something we are certainly thinking about." This would require navigating some challenges, including technological upgrades, regulatory considerations, and potential impacts on liquidity and dual-listed companies. While cryptocurrencies such as bitcoin (BTC-USD) already trade 24/7 and more investors are turning to platforms such as Robinhood (HOOD) to trade shares after hours, stocks listed on the London Stock Exchange remain confined to traditional UK trading hours, running from 8am to 4:30pm. Globally, other exchanges are also eyeing extended hours. In late 2023, the New York Stock Exchange proposed a shift, requesting US regulators to expand its trading window from the current 9:30am–4pm schedule to a new span of 1:30am–11:30pm. Read more: The 'cheapest' stocks on FTSE 100 as UK blue-chip index trades at record high However, such changes come with concerns. Critics, including some brokers, warn that extended hours could complicate the clearing process and require significant operational shifts. Additionally, open-ended fund managers, who calculate daily values at market close, could face challenges with pricing and liquidity in a round-the-clock trading environment. AI and the future of finance The London Stock Exchange Group has diversified over the years, with its data and analytics business now comprising the bulk of its revenues. The company's strategic pivot into financial data services, which involves providing access to market information for a wide range of clients, including banks, brokers, and asset managers, has positioned it as a key player in the financial data sector. This transformation was bolstered following LSEG's $27bn acquisition of Refinitiv, the financial data provider, in 2019. Schwimmer also discussed the growing role of AI at LSEG, highlighting that AI is already a major part of the company's operations. "AI is already playing a significant role in our business, both internally and externally," he said, adding that internally, AI is being used to increase efficiency, streamline operations, and improve data ingestion. The CEO highlighted a partnership with Microsoft (MSFT), which took a stake in LSEG a few years ago. "We've been collaborating with Microsoft to make our products interoperable with the Microsoft productivity suite, including tools like Excel and PowerPoint. This allows bankers and other financial users to use basically modelling, which, if you're in that space, is incredibly helpful and useful," Schwimmer explained. Revenues at LSEG rose 7.8% to £4.49bn in the first six months of the year, exceeding analysts' expectations. The company made just £205m from its equities division over the same period, or 4.6% of its overall revenues. LSEG also announced a £1bn share buyback. Read more: Did the Genius Act just kill the UK's crypto dreams? Defence companies post strong results as UK investors back the sector over AI Should you invest in gold?Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
01-08-2025
- Business
- Yahoo
IPO market heats up: These 4 names prepare to go public next
EquityZen head of market insight Brianne Lynch joins Market Domination with Josh Lipton to discuss the initial public offering (IPO) market in light of Figma's (FIG) recent public debut and whether companies need to have an artificial intelligence (AI) story to succeed. She also shares which private companies are likely to go public next. To watch more expert insights and analysis on the latest market action, check out more Market Domination. Which are the possible candidates in your opinion, that would be on your radar, who might be willing to test the public markets this year? Sure. So, you know, several of the names on our IPO outlook for the year have already gone public. But there are a few that we're still waiting on. One of the big ones being Klarna. This is a company that was planning to go public in the spring, tabled those plans given the volatility in the market post deliberation day. Uh but they're reportedly now looking at a September IPO. So that'll be, um, the next of several Fintech IPOs we've seen. You had Circle, um, Chime, eToro. So certainly, uh, Fintech is an area where we're seeing more activity and given Klarna's brand recognition, um, and you know, value in the market, that's one we have our eyes on. Right now if you're going to go public, Brian, do you have to have an AI story? Do you have to be able to just sprinkle some of that AI magic on your S-1? Yeah. I would say at a minimum you have to try. And Figma, you know, that's something that played into their story as well. They had so many case studies of their large enterprise clients saving, you know, lots of time and money because of the AI tools that they've built into their products. So, I think that's a table stake for any company that is looking to go public. And that might be the best option for public market investors at the time because you have to remember a lot of these pure play AI companies are still very young in their life cycle. They're less likely to be going public in the next few years. So yes, that's bringing more investors into the private markets to invest. Uh but to kind of capitalize on that interest, public companies or contenders to go public will also need to have that as part of their story. Do you think there there are certain kinds of private companies, Brian, that would be more likely to receive a warm welcome to the public markets in in this environment against this backdrop? Sure. I mean, we've seen a few examples of what has worked. You know, I talked about a little bit about the need for growth, the need for profitability, but when we look at the companies that may be coming next or even the IPOs we've seen in the first half of the year, it hasn't been just one sector or one industry. You've seen Fintech, um, you've seen crypto, which is obviously growing a lot and given, you know, the regulatory tailwinds, uh, we expect that to continue to be a hot market. Um, but then, you know, Netskope, another name on our outlook, that's a cybersecurity company. Um, StubHub, another one. That's an e-commerce player. So, it's definitely not a, you know, one sector narrative that's driving the market. It's more are you growing? Are you profitable? Do you have the brand name? Um, and do you have a a story that's exciting to investors, uh, especially, uh, given the lack of public companies relative to private companies now. Related Videos Berkshire Hathaway earnings: 'Perfect' stock to own when 'worried' Tesla must pay $240M+ for deadly 2019 car crash: What to know Fed Governor Adriana Kugler to resign Dow falls more than 500 points on jobs report, tariffs Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
TechCrunch
11-07-2025
- Business
- TechCrunch
Firefly Space files for an IPO
Firefly Space is taking its orbital ambitions to the public markets. The company, which notched a string of successes this year, including a historic commercial Moon landing, submitted its formal declaration to regulators Friday detailing its plans to IPO sometime this year. The S-1 document submitted to the U.S. Securities and Exchange provides a wide-ranging look into the company's finances and governance plans, though the number of shares to be offered and their price range has not been disclosed. This means the the final valuation is still to be determined. Firefly is heading into the Initial Public Offering with $176.9 million in cash and cash equivalents. And while it has incurred negative cash flows and losses from operations, Firefly projected that its cash is adequate to meet its liquidity needs for at least 12 months. The company does have a lot of debt: about $173.6 million, including a $136.1 million term loan with a 13.87% interest rate. The net proceeds from the IPO will be used in part to repay that outstanding borrowing, according to the S-1. Firefly reportedly scored $55.8 million in revenue as of March 31, up from just $8.3 million for the same period in 2024. The majority of that — around $50 million — is from 'spacecraft solutions,' or its Blue Ghost lander missions, and just $5 million from launch. But hardware is an expensive endeavor, and Firefly is still burning a lot of money: the cost of sales, or incurred expenses, was nearly as much as revenue: about $53 million as of March 31, leaving just $2.2 million in gross profit. The company operated at a net loss of $231.1 million for the 2024 fiscal year, up from $135.5 million in 2023. Its net losses at the end of the first quarter were $60.1 million. Yet the company tells prospective investors that it sees nothing but growth ahead, and there's a handful of huge developments in the pipeline that could prove that to be true. That includes a major partnership with defense giant Northrop Grumman for a new, reusable launch vehicle called Eclipse, a launch agreement for up to 25 launches with Lockheed Martin, and the impending commercial debut of Elytra, a spacecraft line designed for in-space transportation services. The company also cited strong customer demand, noting that as of March 31 it had about $1.1 billion worth of backlogged launch orders and spacecraft contracts. That's about double from the $560 million in backlogged orders it had from a year prior. That big boost came from three multi-launch agreements for Firefly's small Alpha rocket and an additional lunar delivery contract for its Blue Ghost lander. The regulatory document also states Firefly intends to be a 'controlled company' — essentially, that it will leverage Nasdaq rules to ensure that AE Industrial Partners, the private equity firm that bought a majority stake in Firefly in 2022, will retain significant governance control over the company even after it is listed on the public markets. The company intends to list on the Nasdaq Global Markets under the ticker symbol $FLY. The news comes after a relative quiet period of space company exits. There was a slew of space companies that went public via mergers with special purpose acquisition companies in 2021 and 2022, many of which have failed to perform. Techcrunch event Save up to $475 on your TechCrunch All Stage pass Build smarter. Scale faster. Connect deeper. Join visionaries from Precursor Ventures, NEA, Index Ventures, Underscore VC, and beyond for a day packed with strategies, workshops, and meaningful connections. Save $450 on your TechCrunch All Stage pass Build smarter. Scale faster. Connect deeper. Join visionaries from Precursor Ventures, NEA, Index Ventures, Underscore VC, and beyond for a day packed with strategies, workshops, and meaningful connections. Boston, MA | REGISTER NOW Firefly's IPO will likely provide some much-needed liquidity to the market. Its IPO comes just one month after Voyager Space, a space company building the private space station Starlab, filed its IPO paperwork last month.
