Is FIGR Valuation Too High After Blockchain Lending Surge and Rate Cut Hype?

Why Stock is Making Waves Right Now

Figure Technology Solutions (FIGR) has seen its shares climb to new peaks. This surge comes from excitement over its projects and hopes for more Federal Reserve rate cuts. In the past week, the stock jumped 32.78%. Over 30 days, it rose 46.11%, and in 90 days, it gained 37.47%. This shows building investor interest in this fintech player.

If you follow high-growth tech and crypto stocks, is one to watch. But with shares now above analyst targets and near all-time highs, a big question remains: Does the current price fully price in the story and benefits, or is there more upside?

What Does Figure Technology Solutions Do?

Figure is a financial tech company focused on blockchain-based solutions in the US. It offers platforms for lending, trading, and investing using blockchain tech. Key highlights include:

• The RWA Consortium, which tokenizes real-world assets for better liquidity.
• A new stablecoin launch on Solana, aiming to make crypto lending faster and cheaper.
• Provenance Blockchain, their own network for secure, efficient financial transactions.

These moves position Figure at the crossroads of traditional finance and crypto, tapping into the growing real-world asset (RWA) trend.

Metrics: Premium or Justified?

At a last close of $58.08, trades at a price-to-sales (P/S) ratio of 32.5x. This is high compared to peers. The US consumer finance industry average is just 1.6x, and peers average 2.3x. That’s over 20 times the industry norm!

P/S ratio measures market value against revenue. A high multiple like this signals investors expect explosive sales growth. For a blockchain-focused lender, this premium reflects bets on future expansion in crypto lending and RWAs, not just current profits.

This table shows at the premium end. But is it overvalued?

DCF Model Says Looks Expensive

Discounted cash flow (DCF) models estimate fair value based on future cash flows. For , the fair value comes in at about $14.97, far below the current $58.08 price. This gap suggests the market has priced in a lot of optimism around and lower rates.

Lower rates from the Fed could boost lending demand, as borrowing gets cheaper. Figure’s blockchain edge could capture more market share here. Yet, if rate cuts slow or execution falters, this premium could unwind fast.

The Bull Case for

Optimists point to:

• High growth potential: Blockchain lending cuts costs and speeds up processes. Solana’s fast network gives an edge over slower chains.
• Adequate balance sheet: Enough cash to fund expansion without heavy dilution.
• RWA boom: Tokenizing assets like home equity could unlock billions in value. Figure leads here.
• Rate cut tailwinds: Easier money means more lending volume across fintech.

If Figure nails its rollout, revenue could skyrocket, justifying the high P/S.

Risks to Watch in

Not all smooth sailing. Key risks include:

• Execution hurdles: New blockchain products face tech glitches or regulatory snags.
• Rate cut delays: If inflation sticks, Fed might pause, hurting fintech stocks.
• Competition: Players like Upstart or SoFi also chase lending growth, but without blockchain focus.
• Market volatility: Crypto ties mean swings with Bitcoin or Solana prices.

Current enthusiasm might have pushed the stock ahead of fundamentals.

How Does Stack Up Against Peers?

Compare to similar names:

• Upstart (UPST): AI lending, P/S around 5x, but slower growth lately.
• LendingClub (LC): Traditional online lender, P/S 0.8x, steady but low growth.
• Block (SQ): Crypto payments, P/S 2x, broader but less focused on lending.

‘s 32.5x stands out, betting big on blockchain disruption.

Final Thoughts on After and Buzz

screams premium today. P/S at 32.5x and DCF gap signal overvaluation versus peers. Yet, for risk-tolerant investors eyeing crypto’s future, the story and rate cut hopes offer upside if milestones hit.

Dig into your own research. Track earnings, blockchain adoption, and Fed moves. In volatile fintech, timing matters as much as the thesis.

Ready to explore more? Check high-growth crypto stocks blending AI, blockchain, and finance.