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Figure reported a strong third quarter, with earnings of $0.36 per share beating the $0.29 analysts expected. Revenue reached $290 million, also coming in ahead of the $250 million forecast. The most important number for the company's growth was loan marketplace volume, which hit $5.8 billion, a 135 percent increase from last year.
This growth was helped by the acquisition of Kiavi, which added new types of loans to Figure's platform. CEO Michael Tannenbaum highlighted that 72 percent of volume now moves through Figure Connect, a tool that lets the company earn fees by connecting lenders and buyers without having to hold the loans on its own books. This shift toward a capital-light model is exactly what the company needs to do to keep margins high as it grows.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
On November 10, Figure entered into a new agreement with JPMorgan Chase for a $465 million senior secured revolving credit facility. This is essentially a large corporate credit card that the company can draw from as needed for working capital and general business needs through late 2029.
The agreement allows Figure to potentially expand this borrowing limit to as much as $750 million in the future. Securing this much liquidity from a major bank like JPMorgan is a sign of confidence in Figure's financial health and provides the cash cushion needed to continue scaling its loan marketplace.
Source: 8-K filing
Figure Technology Solutions will report its latest quarterly results on November 12. Analysts expect the company to earn about 28 cents per share on revenue of roughly 250 million dollars. This report will be an important check on whether the company is maintaining its momentum in home equity lending. For a long-term owner, the most important numbers will be the total volume of loans moving through its blockchain platform and whether its network of bank partners continues to grow.
Figure's small business lending ecosystem reached its first $100 million quarter, with monthly volume hitting $50 million for the first time. Just 16 months after launch, the platform's volume now rivals that of the top 25 traditional Small Business Administration lenders.
This growth is important because it shows Figure can successfully apply its blockchain technology to more than just home equity loans. By adding over 150 partners to this specific marketplace, the company is proving it can diversify its revenue and grow loan volumes without a massive increase in its own marketing costs.
Source: GlobeNewsWire
Goldman Sachs lowered its price target for the company to $41 from $48 on Wednesday. A price target is what an analyst thinks a stock will be worth in the future. Even with the lower target, the firm still sees the stock as worth significantly more than its current price of about $28. This move follows a period of heavy selling for the stock, which has dropped about 28 percent over the last month. While the lower target reflects that recent slide, the average target across all analysts remains higher at $50, suggesting most still see a path for the stock to recover.
Source: Goldman Sachs
Management has a habit of setting conservative targets and then blowing past them, as the business is currently growing much faster than even their own forecasts suggest.
| Expectation | |
|---|---|
| EPS | $0.33 |
| Revenue | $275M |
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