FIGR Loan Originations Head Toward New High, Target Price Raised to US$70

Overview

Bernstein believes Figure is heading toward its strongest quarter for consumer loan originations. Originations reached US$4.3 billion in 2Q 2026, with HELOC remaining the main source of growth, while new categories such as first-lien mortgages, auto loans, small business loans, RTL, and DSCR open up room for subsequent growth. As partners continue to join Figure Connect, the share of high-margin ecosystem and technology fee revenue is expected to increase and offset fee-rate pressure caused by changes in product mix.

Core views

The core thesis includes: first, loan origination growth significantly exceeded expectations, and July data indicate that growth momentum is continuing into the third quarter; second, Figure is shifting from proprietary originations to a partner-led marketplace platform model, with partner originations accounting for 78% of total volume in 1Q 2026 and Figure Connect accounting for 56% of total volume; third, the proposed Kiavi acquisition and partnerships with loanDepot, Credibly, Agora Data, and others are expected to expand coverage of first-lien mortgages, RTL, DSCR, auto loans, and small business loans; fourth, although the net fee rate is expected to decline from 4% in 2025 to 3.5% in 2028, higher Figure Connect penetration and increased high-margin platform fees can still drive EBITDA margin expansion; fifth, based on the upgraded operating forecasts, the target price is raised to US$70.

Analysis framework

The report updates 2026 to 2028 forecasts by combining quarterly and monthly loan origination data, product and channel mix, number of partners, market size, net fee rates, revenue mix, and EBITDA margins. Valuation uses 20x expected 2028 enterprise value to EBITDA and compares the company with traditional exchanges, fintech peers, and crypto asset peers. The current model has not yet consolidated the proposed Kiavi acquisition, nor does it include the related US$600 million financing.

Methodology notes

• Valuation methodsEV/EBITDA relative valuation method

  Calculate target value based on 20x expected 2028 EV/EBITDA

  The valuation benchmark rolls from the previous 25x expected 2027 EV/EBITDA to 20x expected 2028 EV/EBITDA. The report argues that, with its structural growth as a pure tokenization platform and profitable core lending business, Figure should enjoy a valuation premium over traditional exchanges and crypto asset peers.

• Operating forecastLoan volume–fee rate–margin driver model

  Forecast performance by loan product, origination channel, net fee rate, and platform revenue share

  The model separately forecasts scale changes in HELOC and first-lien mortgages, new loan categories, and Figure Connect, and evaluates the offsetting relationship between the decline in net fee rates caused by product mix and the increase in high-margin marketplace platform revenue.

• Growth analysisCompound annual growth rate analysis

  Measure growth in loan originations and adjusted EBITDA from 2025 to 2028

  Loan originations are expected to grow at a 42% CAGR and adjusted EBITDA at a 44% CAGR, supporting the medium-term growth and valuation assessment.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• FIGR.US

  U.S.-listed stock directly covered by the report

  Strengths

  Strong growth in loan originations; scalable partner model through Figure Connect; differentiated tokenized credit infrastructure; increasing share of high-margin ecosystem and technology revenue; partner network of more than 380 firms.

  Weaknesses

  The current business remains highly dependent on HELOC; new categories have historically contributed little; product mix migration toward larger, lower-fee first-lien loans may pressure net fee rates.

  Comparison

  The report assigns Figure a higher valuation than traditional exchanges, fintech companies, and crypto asset peers, on the grounds that it combines the structural growth of a pure tokenization platform with a profitable core lending business.

  Risks

  Changes in the interest-rate environment, slowdown in private credit, delays in expansion of new loan categories, partner onboarding falling short of expectations, execution and integration risks for the Kiavi transaction, and valuation multiple contraction.

Key data

• Consumer loan originations in 2Q 2026US$4.3 billionUp 132% year over year and 47% quarter over quarter, above management's guidance range of US$3.8 billion to US$4.1 billion.
• Loan originations in July 2026US$1.7 billionAbove US$1.3 billion, US$1.4 billion, and US$1.5 billion in April, May, and June.
• Expected loan originations in 2026US$16.3 billionRaised 27% from the prior forecast of about US$12.8 billion; HELOC is expected to contribute US$14.9 billion, accounting for 91%.
• Expected adjusted EBITDA in 2026US$466 millionUp 86% year over year and raised 22% from the prior forecast; expected EBITDA margin is 54%.
• Expected loan originations in 2027US$20.4 billionPrior forecast was US$16.5 billion; new loan categories are expected to account for 16%.
• Expected adjusted EBITDA in 2027US$640 millionEBITDA margin is expected to reach 60%.
• Expected loan originations in 2028About US$24.0 billionRaised 28% from the prior forecast of US$19.0 billion; new loan categories are expected to contribute US$4.8 billion, accounting for 20%.
• Expected net revenue in 2028About US$1.2 billionRaised 20% from the prior forecast, with a 35% CAGR from 2025 to 2028.
• Expected adjusted EBITDA in 2028US$753 millionRaised 20% from the prior forecast, with margin expected at 61% and a 44% CAGR from 2025 to 2028.
• Expected Figure Connect penetration70% in 2028Approximately 56% in 1Q 2026; ecosystem and technology fees are expected to contribute 36% of total revenue in 2028.
• Target priceUS$70Prior target price was US$67; based on the US$28.73 closing price, potential upside is 144%.

Impact & implications

If loan originations, partner onboarding, and Figure Connect penetration improve as expected, Figure's revenue mix will gradually shift toward higher-margin ecosystem and technology fees, supporting an EBITDA margin increase to 61% in 2028. The proposed Kiavi acquisition could also add about US$7.0 billion in annual first-lien loan volume and expand into an approximately US$200 billion annual RTL and DSCR market, but the related contribution has not yet been included in current forecasts; therefore, it represents both potential upside and uncertainty around transaction execution and integration.

Risks

• A rapid decline in interest rates could intensify mortgage refinancing competition and weaken HELOC demand.
• A slowdown in the private credit market could restrain adoption of Figure's tokenized credit marketplace.
• If non-HELOC loan categories are delayed in scaling, 2028 loan volume and revenue forecasts may fall short.
• As the share of first-lien mortgages and other large-ticket, low-fee products increases, net fee rates may decline faster than expected.
• The proposed Kiavi acquisition has not yet been included in the model, and there is uncertainty around transaction completion, financing, and integration.
• Partner onboarding, loan standardization, and cross-category scaling may progress more slowly than expected.
• The 20x expected 2028 EV/EBITDA multiple includes a peer premium; if growth or profitability falls short of expectations, valuation may come under pressure.

What to watch

• Whether the share of first-lien loans in second-quarter results continues to be higher than the 20% level in 1Q 2026.
• Changes in the HELOC share and whether net fee rates can remain stable.
• Initial origination volumes for Agora Data auto loans and Credibly small business loans.
• Onboarding progress for the 80 new partners and Figure Connect penetration.
• Kiavi transaction terms, completion timing, related US$600 million financing, and consolidation impact.
• Whether the share of high-margin Figure Connect ecosystem and technology fee revenue can continue to rise.
• Management's update on the medium-term EBITDA margin target of 60%.
• Commercialization progress for Adaptor, Figure Forge, Hastra, and pre-funding securitization products.