Figma enters its June 2 earnings report carrying one of the more striking short setups in the application software sector — a nearly 70-point rally over the past month colliding head-on with a short position that has nearly doubled over the same period.
Short interest now reads at roughly 30.8% of free float — up from around 18% in mid-April and from just 14% in early April. That is a significant build. In the week ending May 28 alone, shares short jumped nearly 20%. The ORTEX short score reflects the pressure, running at 72 — ranking in the 4th percentile of scored names, meaning almost every other covered stock has less short conviction behind it. Yet the borrow market has not tightened to match. Availability sits near 28%, up sharply from a stretch in early May when it had compressed to near zero. Cost to borrow is only 1%, a pedestrian rate for a stock this heavily shorted. The short thesis here is conviction-driven, not a squeeze setup.
Options traders are reading the opposite way. The put/call ratio has fallen to 0.54, more than one standard deviation below its 20-day average of 0.58 — a lean into calls that is notably unusual for a stock this close to a catalyst print. That positioning flip coincides with an aggressive price move: rose 8.7% on Friday alone, capping a 12% week and a 48% month. The last time the company reported — May 14 — the stock jumped 21% in a single session and held most of that over the following five days. Options buyers appear to be pricing in a repeat.
The fundamental debate is genuinely split. Bulls point to FY26 guidance that projects nearly 30% revenue growth, strong international expansion and a high customer-retention base. EPS momentum ranks in the 95th percentile on a 30-day basis — the company has been consistently surprising estimates. Bears counter that AI investment is compressing gross margins, competition from ADBE and others is intensifying, and the FY guide raise may be management getting ahead of a more complicated story. Morgan Stanley, JP Morgan and RBC all trimmed targets in mid-May following the last print, even as they maintained their ratings. Piper Sandler stayed Overweight with a $30 target. The mean street target sits at $36.88, well above the current $25.50 — but that gap reflects analysts who set targets before the stock de-rated this year, not a clear buy signal. Valuation is stretched: the trailing P/E reads 78x and EV/EBITDA is above 66x.
Institutional flow adds an awkward layer. FMR (Fidelity) and T. Rowe Price each added more than 10 million shares in Q1 — a substantial commitment from two of the Street's most-watched active managers. At the same time, the CTO sold $8.2 million of stock on May 19, and the CFO sold in early May, both at prices well below the current level. The ownership picture is therefore a study in divergence: long-only institutions building, insiders trimming.
The June 2 print will test whether the May 14 beat was a durable re-rating or a one-quarter fluke — and whether short sellers who have nearly doubled their position over six weeks have the right read on margin trajectory going into the second half.
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