Jim Cramer explains why he’s hesitant to recommend Figma after its IPO
On Tuesday, Jim Cramer from CNBC examined Figma, a design software company that will open to the public this week. Although Figma says he loves the basic job, he hesitates to recommend the stock immediately because he can be very expensive.
“The company has a lot to love about the figma, but it comes to a very expensive level,” he said. “And if the stock comes out of the door – I’ll tell you – it will be very expensive for me even when I think the company has an enormous product at a very reasonable price.”
Figma is one of the most valuable private technology companies. On Monday, the outfit increased the expected price range for the share in the first public offering and estimated the $ 30 to $ 32 per share instead of $ 25 to $ 28. The new range would value Figma between $ 17.6 billion to 18.8 billion dollars – this is under $ 20 billion Adobe In 2022, an agreement was presented to buy the outfit. A year later, the two companies scrapped the purchase of the regulators after a year later.
Cramer, Figma’s software “invisible as well as everywhere” by calling, stating that it is used by high -profile customers Netflix– Uber And Google. The profitability of the software designer was influenced by the increase in income and the ability to get more business from customers.
Looking at the power of the public offering market and the financial quality of Figma, Cramer argued that the company would be well welcomed by Wall Street.
However, he said there were concerns about the agreement as well as raw numbers. The public offering market has been hot for the last few months – Sunflower seed And Apartment internet group Enterprise software companies have recently seen weakness, especially people who make tools for other software developers. Adobe, a dominant player on the field, fell more than 41% of a high set at the beginning of last year.
According to Cramer, corporate software is suffering because the industry can be one of the first inches of new productive artificial intelligence technology. While Adobe says that it has a firm AI offers on its own, new AI companies come out with comparable products. Cramer, Figma is also his own AI technology, he said. However, CEO Dylan Field’s comments on Figma’s AI investments, said that profitability will take a hit for a long time. Inside filingField, “AI expenditure will potentially drag to our efficiency for several years.” He said.
“I know that these companies need to spend a reserve on AI.” He said. “But if the Figma’s surgical margin goes negatively, I don’t think Wall Street will be very forgiving.”
Figma refused to comment.
