Figure Technology Solutions is forming its first chart pattern after the blockchain-based consumer loan provider went public less than a month ago. The first batch of analyst recommendations on the IBD Stock of the Day dropped Monday and were mostly bullish.
The company is part of the digitization and democratization of consumer finance. Figure uses blockchain digital ledgers to connect borrowers and lenders. This reduces the multiple layers of parties under the traditional system, the company said in its prospectus. With the blockchain, Figure says, transactions are faster and more efficient.
Reno, Nev.-based Figure started as a direct-to-consumer provider of home equity lines of credit (HELOCs), but soon expanded to provide its platform to other lenders. Today, it has roughly 170 partners, including many of the largest mortgage lenders. HELOCs are loans backed by the homeowners' equity in their property.
The company's website says it has made more than $18 billion in home-equity loans, making it the nation's largest such lender.
In its prospectus, Figure said it is growing profitably, posting net income of $29 million and adjusted EBITDA of $83 million for the six months ended June 30. In 2024, it had net income of $20 million and adjusted EBITDA of $101 million. IBD gives the stock a 73 EPS Rating.
The company's chief executive since July 2024 is Michael Tannenbaum, who came from financial services firm Brex, where he was chief operating officer. Tannenbaum also was an executive at SoFi Technologies, private equity firm Hellman & Friedman and worked in the investment banking division at JPMorgan Chase.
Figure was founded in 2018 by former SoFi executives Michael Cagney and his wife, June Ou. Cagney is the company's chairman, while Ou also serves on the board.
Figure Technology Stock IPO
Figure Technology Solutions went public Sept. 11 in an initial public offering at 25 a share. That was above the expected range of 20 to 22, according to IPO analysis firm Renaissance Capital. It originally planned to offer shares at 18 to 20 before revising terms just prior to the IPO. The final pricing gave Figure a fully diluted market value of $6.1 billion. Goldman Sachs, Jefferies and BofA Securities led the offering.
On Monday, nine analysts initiated coverage on the stock, including some of the banks that helmed the IPO.
Goldman Sachs, Keefe, Bruyette & Woods, Mizuho, Piper Sandler, Needham and Bernstein gave Figure Technology buy or overweight ratings. The three others initiated with hold or neutral recommendations. Price targets ranged from 40 to 54, according to Dow Jones Newswires.
Needham called Figure a leader in the digital lending blockchain, and its technology can be scaled and applied to other consumer credit products besides HELOCs, The Fly reported. Bernstein noted that Figure is a market leader in credit tokenization, with a 75% share of the tokenized (blockchain) private credit market.
Stock Analysis For Fintech IPO
Figure Technology is forming an IPO base that's 23% deep. That's a relatively moderate decline for new issues, which often are quite volatile. Historically, IPO bases provide the largest post-breakout gains compared with other common chart patterns, IBD research found.
The buy point is 46.20. Shares are trading about 70% above the IPO price of 25. The stock closed at 31.11 on its first day of trading, up 24%.
Figure stock has an IBD Composite Rating of 90. The stock doesn't yet have a 50-day moving average.
