Bernstein Initiates Outperform on Figure, Projects 34% Upside for Blockchain Credit Pioneer

Executive Summary

Bernstein initiated an 'outperform' rating on Figure (FIGR), a leader in blockchain-based credit markets, projecting a $54 price target and 34% upside, signifying strong analyst confidence in the company's market dominance and growth trajectory within tokenized assets.

The Event in Detail

Bernstein initiated coverage on Figure (FIGR) with an 'outperform' rating and a price target of $54, suggesting a 34% upside from its recent trading levels around $41.10 and a 35% upside relative to the initiation. Bernstein analysts, including Gautam Chhugani, stated that Figure is positioned as a pioneer in blockchain-based credit markets. The company currently holds approximately 75% market share in the $17 billion tokenized private credit market. Figure's recent IPO priced shares at $25, initially valuing the company at $787.5 million, with a Nasdaq debut valuing it at approximately $5.3 billion. The initiation follows the merger of Figure Technology Solutions and Figure Markets, which solidified its market position.

Financial Mechanics and Business Strategy

Figure's business model is predicated on tokenizing loans, transitioning from a balance sheet lending approach to a fee-based marketplace model through its Figure Connect platform. Bernstein projects Figure's revenue to more than double from $341 million in 2024 to $754 million by 2027, representing a compound annual growth rate of approximately 30%. Over the same period, EBITDA is forecast to climb from $101 million to $427 million, with margins expanding from 30% to 57%. The company's platform, powered by the Provenance Blockchain, facilitates the origination and trading of tokenized home equity, mortgage, and other consumer loans. Figure Connect has over 175 origination partners and has facilitated over $16 billion in funded loans, establishing Figure as the largest non-bank originator of home equity lines of credit (HELOCs). Another key component is Democratized Prime, an on-chain lend-borrow marketplace directly connecting capital to tokenized collateral. Figure's securitization of $355 million in mortgage assets (FIGRE 2025-HE3) received a AAA rating from S&P Global Ratings, marking the first of its kind for blockchain finance. The company has also established a strategic joint venture with Sixth Street, committing over $2 billion in liquidity. Regulatory infrastructure includes more than 180 lending and servicing licenses, 48 money transmitter licenses, and SEC registration as a broker-dealer with authority to operate an alternative trading system. Figure leverages artificial intelligence (AI) and blockchain to reduce HELOC approval times to a median of 10 days from an industry average of 42 days, with applications completable in five minutes and funding available in as little as five days.

Market Implications

The addressable market for credit tokenization is estimated to exceed $2 trillion, indicating significant growth potential for Figure and the broader Web3 ecosystem. Bernstein analysts assert that "tokenised loans will redefine lending," akin to how stablecoins transformed payments, suggesting a fundamental shift in financial infrastructure. This analyst coverage validates the potential of blockchain to revolutionize traditional finance, accelerating institutional adoption and investment in tokenized credit markets. Figure's success in achieving a AAA rating for its blockchain-based securitization could encourage other financial institutions to explore similar tokenization strategies for real-world assets (RWAs). The company's dominant market share and projected financial growth position it as a model for firms seeking to integrate blockchain technology into established financial processes. The bullish sentiment surrounding Figure reflects a broader trend of increased investor confidence and venture capital investment in crypto-linked companies, with sector investment surging 70% to over $17 billion this year.

Expert Commentary

Gautam Chhugani and his team at Bernstein noted that "Figure is years ahead in execution and market share," positioning it to potentially become the "Nasdaq of blockchain-based lending." Mike Cagney, Co-Founder and Executive Chairman of Figure, has consistently articulated the belief since 2018 that blockchain would be a transformational force across capital markets. Bernstein's analysis highlights Figure's strengths, including an experienced management team, a wide distribution network with over 170 origination partners, and more than 15 private credit investors.

Broader Context

Figure's Nasdaq listing, supported by Wall Street giants like Goldman Sachs, Jefferies, and Bank of America, represents a milestone for blockchain-based finance entering the mainstream. The company's expansion into crypto-backed lending and digital asset trading, alongside investments from entities like Stanley Druckenmiller's Duquesne Family Office, underscores the growing institutional interest in the digital asset space. The success of Figure and other public listings like Circle, Gemini, and Bullish signify a general bullish sentiment surrounding crypto companies in the current year.