Two major Wall Street investment banks have expressed differing views on the newly publicly offered financial technology firm Figure (FIGR). Keefe, Bruyette & Woods (KBW) rated Figure as "outperform" with a 12-month price target of $48.50, indicating a potential upside of 17.5%. The bank highlighted Figure's early dominance in the tokenized credit markets. According to KBW's estimates, the firm holds 73% of the private credit segment and 39% of all tokenized real assets.
Founded by former SoFi CEO Mike Cagney, Figure went public in September and has increased by 12% since its IPO. The firm's core operation is to tokenize home equity loans known as Home Equity Line of Credit (HELOC) and offer an integrated platform that connects borrowers with investors. KBW noted that Figure is not fully leveraging its technological infrastructure and could support a broader range of credit asset classes, such as first mortgages. It also pointed out potential gains from products like Figure Exchange and tokenized intermediaries for third-party assets.
Bernstein, on the other hand, has a more optimistic outlook on Figure shares, assigning an "outperform" rating with a price target of $54. The firm emphasized that Figure is progressing in accelerating financing and increasing efficiency by tokenizing traditional assets. However, Bank of America (BofA) took a more cautious approach, giving Figure a "neutral" evaluation with a price target of $41. BofA highlighted the firm's excessive reliance on its HELOC business and risks related to implementation and regulation.
BofA believes that a new marketplace called Figure Connect could be the next growth driver for the firm, expecting it to account for 75% of total revenue growth between 2024 and 2027. While both banks acknowledged Figure's leadership in an overlooked consumer credit space, they differed in their views on how easily the firm could scale into a broader financial technology platform. BofA emphasized potential obstacles such as the onboarding of large institutions, competition from other technology providers, and possible regulatory changes like the Truth in Lending Act.
The price targets set by KBW and BofA - $48.50 versus $41 - reflect uncertainty about whether Figure's blockchain infrastructure can transition from a niche use to a more central role in modern finance.
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Figure, Wall Street, KBW, BofA, blockchain, financial technology, HELOC