Figure, a blockchain-based fintech firm that recently made its public debut, is capturing attention on Wall Street as two major investment banks offer contrasting perspectives on its future. With its innovative approach to lending and capital markets, Figure aims to redefine the financial landscape, but its path forward is seen differently by Keefe, Bruyette & Woods (KBW) and Bank of America (BofA).
A Strong Start with Divergent Views
Since going public in September, Figure’s stock has risen by 12%, a testament to investor enthusiasm for its blockchain-based solutions. Founded by former SoFi CEO Mike Cagney, Figure is pioneering in tokenizing home equity lines of credit (HELOCs) and connecting borrowers with investors through a sophisticated platform. However, the company’s mixed reception from Wall Street giants underscores the complexities of navigating this burgeoning market.
KBW has expressed a bullish outlook, initiating coverage with an “outperform” rating and a 12-month price target of $48.50. The bank lauds Figure’s impressive hold on the tokenized credit markets, where it commands 73% of the private credit sector and 39% of all tokenized real-world assets. KBW believes that Figure’s technology is underutilized and ripe for expansion into new credit markets, such as first-lien mortgages and personal loans. Additionally, it highlights the potential of Figure’s ancillary products, including the Figure Exchange and a tokenization tool for third-party assets.
On the other hand, BofA presents a more tempered assessment, assigning a “neutral” rating with a $41 price target. While acknowledging Figure’s leadership in the credit market, BofA voices concerns over execution risks, regulatory challenges, and the company’s heavy reliance on its HELOC business, which is not fully integrated into the blockchain ecosystem. BofA is keeping a cautious eye on Figure Connect, a marketplace designed to link lenders with capital providers, which it believes could drive significant revenue growth in the coming years.
The Promise and Perils of Tokenization
Figure’s business model rests on the promise of tokenization, a process that transforms traditional assets into digital tokens on the blockchain, enhancing transparency and efficiency. KBW likens Figure’s impact on lending to the transformative effect stablecoins have had on payments. By tokenizing assets, Figure is poised to make credit markets faster and more efficient, a prospect that excites KBW and fellow broker Bernstein, which also rates Figure as an “outperform” with a $54 price target.
Yet, the road to widespread adoption is fraught with challenges. BofA highlights the potential hurdles Figure might face in onboarding large institutions and fending off competition from other tech providers. Moreover, the evolving regulatory landscape, particularly changes to the Truth in Lending Act, could pose significant obstacles. These factors contribute to BofA’s cautious stance and lower price target.
Navigating the Future of Fintech
As Figure seeks to expand its blockchain infrastructure beyond its current niche, the differing opinions of KBW and BofA reflect broader uncertainties in the fintech sector. The company’s ability to scale effectively and integrate new technologies will be crucial to its long-term success. While KBW is optimistic about Figure’s potential to diversify its offerings and capture new market segments, BofA remains wary of the execution risks and regulatory pressures that could impede growth.
The divergence in price targets — $48.50 from KBW and $41 from BofA — underscores the mixed sentiment surrounding Figure’s prospects. Investors must weigh the potential rewards of Figure’s pioneering approach against the inherent risks of venturing into uncharted territory.
A Path Forward
For Figure, the path forward involves not only capitalizing on its current strengths but also navigating the complexities of expanding its platform. As it continues to develop its blockchain-based solutions, the company will need to address the concerns raised by BofA while leveraging the opportunities identified by KBW.
With its innovative approach and strong market position, Figure is well-positioned to make significant strides in the fintech industry. However, its success will depend on its ability to adapt to changing market dynamics and regulatory environments. As the company moves forward, investors and analysts alike will be watching closely to see how Figure’s story unfolds in the rapidly evolving landscape of blockchain and finance.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
