Figma (FIG  ) stock has plunged and is now hovering near its all-time low, making it one of the worst-performing stocks on Wall Street. This marks a sharp reversal from last year, when the shares surged from $33 to $143 following the company's initial public offering (IPO). The stock has since fallen to $18, wiping out much of those gains and reducing its market capitalization from $59 billion to about $9 billion.

Figma Stock Has Fallen Amid Growth and Software Concerns

Figma has been in a strong downward trend in the past few months as investors have remained concerned about the software industry. The view among these investors is that its demand will drop as AI models improve.

This also explains why other software companies like Adobe (ADBE  ), Intuit (INTU  ), and ServiceNow (NOW  ) have slumped this year.

Figma has also slumped after the company reported a whopping $142 million net loss in the first quarter, driven by a jump in stock-based compensation.

Still, on the positive side, there are signs that the ongoing crash is unwarranted. For one, the expected churn has not materialized, and the company continues growing.

The most recent numbers showed that its revenue jumped by 46% in the first quarter to $334 million. At the same time, the number of paid subscribers rose by 54% to 690k, with some of its top customers being Alphabet (GOOG  ) (GOOGL  ), Lufthansa, Uber (UBER  ), and Airbnb (ABNB  ).

The company also provided strong forward guidance for the second quarter. It expects that its revenue will come in at $350 million, higher than the average estimate of $349 million. Figma and other top software companies tend to be highly conservative when making their guidance.

Analysts are Bullish On FIG Stock

Wall Street analysts tracking the company believe that Figma shares will ultimately rebound in the long term when the ongoing SaaSPocalypse fears fade.

For example, JPMorgan (JPM  ) analysts believe that the stock will jump to $42, up by 125% from the current level. Royal Bank of Canada and Piper Sandler analysts predict that the stock will jump to $30. The other bullish analysts are from companies like Goldman Sachs and Oppenheimer.

Most analysts who are bullish on the company note that the company has become essential in design and that it will be hard for it to be replaced. At the same time, there are signs that it has become a bargain as it ended the quarter with over $1.6 billion in cash and no debt.

A quick Rule-of-40 calculation shows that it is not all that overvalued. It has a forward annual revenue growth of 35% and an operating profit margin of 16%, giving it a multiple of 51%.

The company will also benefit from artificial intelligence, which will ultimately help it to slash costs in the long-term. All these catalysts will likely help it rebound once the SaaSpocalypse fears fade.