Figure Technology Solutions Inc. (NASDAQ:FIGR) shares are trading slightly lower on Friday after the blockchain-native capital marketplace reported better-than-expected third-quarter results on Thursday.
On Friday, Needham analyst Kyle Peterson lowered his price target to $50 from $55 while reaffirming a Buy rating, citing broader valuation multiple compression across the digital lending sector.
Peterson remained bullish on Figure, highlighting robust loan origination growth, strong capital markets execution, contributions from the Kiavi acquisition, new funding partners and an expanded share buyback authorization.
Strong Q3 Performance and Kiavi Contribution
Needham highlighted that Figure beat Street expectations despite interest rate volatility.
Figure reported third-quarter loan marketplace volume of $5.8 billion, up 134.7% year over year, exceeding Needham's $5.12 billion estimate. The results included a $677 million contribution from Kiavi.
Adjusted net revenue reached $283.3 million, exceeding the firm's $252.8 million estimate and the consensus of $253.5 million.
Adjusted EBITDA came in at $163.6 million, well above the firm's $123.4 million projection and the $128.4 million consensus, supported by higher volumes and operating leverage.
GAAP earnings of 36 cents per share topped Needham's 23-cent estimate and the 27-cent consensus reported by MarketDash. Peterson attributed the earnings strength to the core business.
Needham Raises Estimates Amid Strong Fourth-Quarter Outlook
Figure expects fourth-quarter loan marketplace volume of $6.2 billion to $6.7 billion, implying approximately 138.4% year-over-year growth at the midpoint, according to Needham.
Needham estimates Kiavi will contribute approximately $1.4 billion to fourth-quarter volume, while Figure anticipates a gross take rate of 3.1% to 3.4%.
The firm raised its volume, revenue, EBITDA and EPS estimates to reflect the strong results and outlook, and sees potential for further upside.
Needham raised its 2026 earnings estimate to $1.17 per share from 95 cents and its 2027 forecast from $1.40 to $1.58.
Needham also increased its 2026 adjusted net revenue estimate to $967.9 million from $870.8 million and its 2027 projection to $1.38 billion from $1.23 billion.
Blockchain Advantage and Growth Opportunities
Needham highlighted Figure's proprietary blockchain infrastructure, focus on prime and super-prime borrowers and balance sheet-light funding model as competitive advantages.
The firm noted that Figure increased its share repurchase authorization to $400 million from $200 million and said it would begin executing a 10b5-1 buyback plan in the near future.
The analyst also sees longer-term growth opportunities from emerging products such as stablecoins, democratized prime and the crypto exchange.
Needham's revised $50 target is based on 25 times Figure's estimated 2028 GAAP earnings of $2 per share.
FIGR Price Action: Figure Technology Solutions shares were down 0.04% at $25.66 at last check Friday, according to market data.
