Wall Street’s Confusion Over Fintech: Can Figure Survive the Blockchain Fiasco?

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Markets

What to know:

  • KBW, the ever-optimistic bunch, decided Figure deserves an “Outperform” rating, predicting that the tokenized credit market is going to be their playground, and that HELOCs are just the beginning. How bold!
  • Meanwhile, Bank of America has issued a rather tame “Neutral” rating. Their view? Execution risks, and the pesky reality that Figure still relies a bit too heavily on its non-blockchain HELOC business.
  • And yes, the price target gap of $7.50 is just an innocent little reflection of how much *could* go wrong in this grand experiment.

So, there we have it. Two investment banks, both throwing darts at the same fintech company, Figure (FIGR), which is currently trying to expand its blockchain-based lending empire. It’s a bit like watching two old duffers trying to figure out which way the wind is blowing at the local cricket match.

First up, we have Keefe, Bruyette & Woods (KBW), who have evidently developed a sudden fondness for the company. They’ve kicked off coverage with an “outperform” rating and a shiny new 12-month price target of $48.50. That’s a 17.5% jump from where it is today, just in case you’re wondering. KBW is all in on Figure’s domination of the tokenized credit markets, claiming the company has 73% of the private credit segment and 39% of all tokenized real-world assets. A bit of a stretch, but they’re betting on Figure being the future of lending. “The future is blockchain,” they declare, as though it were an undisputed fact.

Founded by Mike Cagney, the ex-SoFi CEO (because why not?), Figure has already gone public and is now basking in a 12% IPO bump. Their business model revolves around tokenizing HELOCs, basically putting home equity lines of credit on the blockchain. It’s all very futuristic and exciting, until you realize that most of their profits still come from that good ol’ non-blockchain HELOC business. But that’s fine! Who needs profit when you’ve got tokens, right?

KBW believes Figure’s tech stack is underappreciated, claiming it could eventually support more than just HELOCs. They’re talking first-lien mortgages and personal loans-who needs a traditional bank when you can have digital assets? It’s practically a revolution!

Meanwhile, Bernstein, the optimists of Wall Street, also rate Figure as an “outperform” with a higher $54 target. They’re positively swooning over the company’s potential to do for lending what stablecoins did for payments. If they’re right, we’ll all be buying mortgages and car loans with tokens by next Tuesday. Or, you know, maybe not.

The flipside

Enter Bank of America, who’s clearly taking a much more cautious stance on this whole tokenization thing. They’ve slapped a “neutral” rating on Figure, with a price target of $41, which, frankly, is a little on the dreary side. BofA’s main concern? Figure’s dependence on its HELOC business, which is decidedly not a blockchain native. So, they’re asking the all-important question: What happens when your business model is still a bit too… well, traditional?

BofA has big plans for Figure Connect, a shiny new marketplace that could connect lenders with capital providers. They’re betting that this could account for a whopping 75% of Figure’s total revenue growth between 2024 and 2027. But there are hurdles-competition, regulations, and the pesky little matter of onboarding large institutions. BofA suggests that while Figure might have cornered the tokenized market, scaling up could be a bit trickier than it looks.

So, what does this all mean? Well, folks, the price target gap between KBW’s $48.50 and BofA’s $41 illustrates the uncertainty surrounding Figure’s ability to turn its niche blockchain platform into a mainstream force in modern finance. It’s a high-stakes game, and if the wrong card is played, the whole house of tokens could come crashing down. Stay tuned!

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2025-10-07 01:47