Last Update 24 Jul 26
Fair value Decreased 28%FIGR: Kiavi Deal And Higher Funding Costs Will Shape Future Earnings Profile
The analyst price target for Figure Technology Solutions has been revised lower, with the updated fair value estimate moving from $43.00 to $31.00, as analysts factor in a higher discount rate, a lower assumed profit margin, and a more moderate future P/E multiple despite slightly stronger modeled revenue growth.
Analyst Commentary
Recent Street research on Figure Technology Solutions points to a split view, with some bearish analysts trimming price targets and highlighting risks around growth, valuation, and execution, even as others remain more constructive on the outlook.
Across these reports, bearish analysts are reacting to updated forecasts around trading activity, product adoption, and industry competition, which feeds directly into their assumptions for future earnings power and the appropriate P/E multiple for Figure Technology Solutions.
Bearish Takeaways
- Bearish analysts cutting price targets into the US$30s and US$40s are signaling concern that prior expectations for earnings and valuation multiples may have been too optimistic, especially as they revisit assumptions around revenue mix and profitability.
- Commentary around Q2 earnings previews in exchange, trading, and real estate fintech points to rising competitive pressure from prediction markets and perpetual futures, which bearish analysts flag as a potential headwind to Figure Technology Solutions capturing a larger share of trading related revenue.
- Where revenue beats are acknowledged, bearish analysts still point to higher operating expenses as a risk, arguing that if costs remain elevated, it could limit margin improvement and justify more conservative fair value estimates for the stock.
- Some bearish views emphasize uncertainty around adoption of key products such as Connect by larger and mid sized banks, which they see as a constraint on long term growth and a reason to apply more moderate valuation multiples to Figure Technology Solutions.
For investors, these cautious signals frame the current debate around Figure Technology Solutions as a balance between near term growth opportunities and questions about how efficiently that growth translates into sustainable earnings and a justified P/E multiple.
What’s in the News for Figure Technology Solutions
- Figure Technology Solutions agreed to acquire Kiavi, an AI powered lending platform for residential real estate investors, in a US$717 million transaction that adds more than US$7b in annual origination volume to its credit marketplace platform. Source: company and news reports.
- To support the Kiavi acquisition and general corporate purposes, Figure Technology Solutions is raising US$600 million in aggregate principal amount of 8.5% senior notes due 2031 through a private offering to qualified institutional buyers and certain non U.S. investors. Closing is expected in mid July and is not contingent on the Kiavi deal completing. Source: company and news reports.
- Cross River Bank entered a forward flow agreement with Figure Technology Solutions, committing to purchase up to US$250 million in assets to support Figure’s Crypto Backed Loans and provide consumers with USD liquidity while they retain ownership of their digital assets. Source: Cross River Bank client announcement.
- Figure Technology Solutions expanded further into small and medium sized business lending through a partnership with Credibly, which plans to bring its SMB loans and revenue based financing products onto Figure’s Democratized Prime, Figure Connect, and Digital Asset Registry Technology platforms starting in the second quarter of 2026. Source: company client announcement.
Valuation Changes for Figure Technology Solutions
- Fair Value: revised lower from $43.00 to $31.00, a reduction of about 28% in the modeled fair value for Figure Technology Solutions.
- Discount Rate: raised slightly from 7.94% to 8.10%, indicating a modestly higher required return in the updated analysis.
- Revenue Growth: adjusted modestly higher from 38.65% to 40.76%, reflecting slightly stronger modeled top line expansion in the new forecast for Figure Technology Solutions.
- Net Profit Margin: reduced from 39.92% to 36.93%, pointing to a lower assumed level of profitability in future periods.
- Future P/E: brought down significantly from 34.82x to 20.11x, implying a more conservative valuation multiple in the revised model.
Catalysts
About Figure Technology Solutions
Figure Technology Solutions operates a blockchain based marketplace that connects consumer credit originators and capital providers through fee based, capital light platforms.
What are the underlying business or industry changes driving this perspective?
- The business depends heavily on continued adoption of blockchain rails for consumer credit and real world assets. Any slowdown in banks, credit unions and institutional buyers embracing on chain structures could limit ecosystem volume growth and fee revenue.
- The push to expand Democratized Prime as a core funding venue introduces execution and adoption risk. An inability to attract sufficient, stable capital relative to the billions of dollars of potential on chain assets could compress take rates and constrain earnings.
- The plan to extend the model beyond home equity into first lien, SMB, DSCR and other asset classes requires ongoing product build and partner onboarding. If these newer verticals scale slower than expected, overall revenue growth and margin expansion targets could be pressured.
- The strategy to tie YLDS and tokenized assets into multiple blockchains such as Sui and Solana increases technical and regulatory complexity. Any disruption or regulatory shift affecting stablecoins or DeFi funding could affect liquidity flows and Figure’s fee based revenue streams.
- The ambition to put equity on chain and build new capital markets infrastructure around blockchain native securities is unproven at scale. If buy side and issuer adoption of these products remains limited, the company may carry higher technology and compliance costs without a matching uplift in EBITDA margins.
Assumptions
How have these above catalysts been quantified?
- This narrative explores a more pessimistic perspective on Figure Technology Solutions compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts.
- The bearish analysts are assuming Figure Technology Solutions's revenue will grow by 40.8% annually over the next 3 years.
- The bearish analysts assume that profit margins will increase from 21.1% today to 36.9% in 3 years time.
- The bearish analysts expect earnings to reach $525.7 million (and earnings per share of $1.74) by about July 2029, up from $107.8 million today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as $660.8 million.
- In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 20.2x on those 2029 earnings, down from 60.0x today. This future PE is greater than the current PE for the US Consumer Finance industry at 8.4x.
- The bearish analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 8.1%, as per the Simply Wall St company report.
Risks
What could happen that would invalidate this narrative?
- Figure is already reporting strong profitability, with adjusted EBITDA of US$86 million, a 55.4% EBITDA margin and net income of nearly US$90 million in the quarter. If these margins stay resilient or improve as more volume moves to fee based, capital light marketplaces like Figure Connect and Democratized Prime, earnings could remain robust rather than contract, supporting revenue, net margins and overall earnings.
- The partner ecosystem is broad and expanding, with nearly 250 third parties, growth in first lien HELOCs, new SMB and DSCR products, and a growing pool of institutional buyers including a sovereign wealth fund. If this network effect continues to deepen it could support ecosystem volumes and fee income, lifting revenue and sustaining high EBITDA margins.
- Figure has already originated over US$18b of loans on Provenance and processed over US$60b of blockchain transactions, and its blockchain based model has been used to reduce securitization costs and standardize loan data. If blockchain adoption in real world assets and consumer credit continues to progress, the company could see durable demand for its rails, supporting revenue growth and long term earnings power.
- Management is emphasizing a capital light marketplace model, with volume on Figure Connect already close to half of consumer loan marketplace volume and Democratized Prime structured as a fee based exchange. If the business keeps shifting away from balance sheet exposure toward recurring marketplace fees, capital intensity could stay low and free up cash generation, supporting net margins and earnings.
- The company is extending its infrastructure into new areas such as YLDS stablecoin on Sui and Solana and a blockchain native equity share class, while also targeting a broad US$185b plus opportunity across consumer credit and beyond. If these initiatives gain traction over time they could create additional revenue streams on top of the existing consumer marketplace, supporting revenue diversification and long term earnings resilience.
Valuation
How have all the factors above been brought together to estimate a fair value?
- The assumed bearish price target for Figure Technology Solutions is $31.0, which represents up to two standard deviations below the consensus price target of $51.0. This valuation is based on what can be assumed as the expectations of Figure Technology Solutions's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
- However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $67.0, and the most bearish reporting a price target of just $31.0.
- In order for you to agree with the more bearish analyst cohort, you'd need to believe that by 2029, revenues will be $1.4 billion, earnings will come to $525.7 million, and it would be trading on a PE ratio of 20.2x, assuming you use a discount rate of 8.1%.
- Given the current share price of $29.24, the analyst price target of $31.0 is 5.7% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
Have other thoughts on Figure Technology Solutions?
Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.
Create NarrativeHow well do narratives help inform your perspective?
Comments
0 commentsDisclaimer
AnalystLowTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystLowTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystLowTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
