Figure Technology: A Conviction Buy in the Tokenization Infrastructure Play

Bernstein's top pick call frames Figure Technology as a pure-play bet on a capital allocation shift. The firm sees a powerful sector rotation underway, where institutional investors are moving toward tokenized credit infrastructure as a structural tailwind. This isn't a fleeting theme; it's a response to a volatile banking backdrop and a more assertive regulatory framework for crypto, both of which are amplifying demand for Figure's blockchain-based platform regulatory momentum and a volatile banking backdrop.

The core of Bernstein's rationale is the modernization of legacy systems. The firm argues that Figure is upgrading traditional banking ledgers to the blockchain, a move that gains urgency amid sector uncertainty Figure upgrades legacy banking ledgers to the blockchain ledger. This infrastructure play is evolving faster than expected, with growth extending beyond its core lending into new categories and a dynamic tokenized marketplace. For institutional strategists, this signals a company positioned at the intersection of technological disruption and a clear regulatory inflection point.

The revised financial trajectory underscores the conviction. Bernstein has lifted its 2027 net revenue forecast to about $945 million, representing a 21% increase over its prior estimate. This upward revision, coupled with a 33% hike to a $72 price target, reflects a reassessment of the company's growth runway and its ability to capture value in a new market. The stock's performance is the market's institutional verdict on this thesis. In the past 120 days, shares have surged 159.8%, a move that has pushed the current price near the 52-week high of $64.98. This kind of premium pricing and sustained flow are hallmarks of a stock that has captured the attention of allocators betting on this specific structural shift.

Financial Quality and Scalability: The Margin Expansion Story

Figure delivered a 70% year-over-year surge in consumer loan marketplace volume to $2.5 billion, with net income soaring 227% and Adjusted EBITDA margin expanding to 55%. This isn't just growth; it's the kind of margin expansion that signals a high-quality, capital-light infrastructure play. The 10-percentage-point improvement in the EBITDA margin year-over-year underscores the leverage inherent in its blockchain-native platform.

More telling than the headline numbers is the pace of adoption. Bernstein notes that tokenized marketplace volumes and lending activity are running well ahead of internal expectations. This suggests the company's technology stack is not only functional but is being adopted faster than its own projections, a positive signal for future revenue visibility. The rapid scaling of new product categories, which contributed over $80 million in volume last quarter, points to a platform that can quickly monetize new use cases.

For institutional allocators, this setup is compelling. The scalable technology and developing marketplace infrastructure position Figure to capture value across its entire ecosystem. As more assets migrate on-chain, the platform economics should continue to improve, driving further margin expansion. This trajectory is a hallmark of a quality factor: durable growth supported by a widening economic moat. The balance sheet, bolstered by net proceeds of $663 million from its IPO, provides the capital to fuel this expansion without immediate pressure on liquidity. The bottom line is that Figure is executing on a path where top-line growth directly translates into bottom-line strength, a rare and valuable combination in a high-growth sector.

Valuation Context and Peer Comparison

The current price reflects a premium for a high-growth, high-risk thesis. Figure trades at a trailing price-to-sales ratio of 32.3, a significant multiple that underscores its positioning as a pure-play growth story. This valuation is a world away from traditional banks, which typically trade at single-digit P/S multiples, and even from many established fintech peers. For institutional allocators, this premium is the market's explicit pricing of the tokenization infrastructure bet-a bet on Figure's ability to capture a dominant share of a nascent but structurally large market.

The Bernstein price target range of $30 to $59 implies a wide dispersion of outcomes, highlighting the binary nature of the investment. The firm's revised $72 target sits at the upper end of that range, but the lower bound suggests a scenario where the growth thesis faces material execution or regulatory friction. This volatility in forward expectations is mirrored in the stock's recent trading dynamics. The shares have exhibited 16.4% daily volatility and a turnover rate of 7.3%, indicating active institutional trading and liquidity. While this turnover provides a bid, it also signals a higher risk premium, as the stock's path is likely to be choppier than a more mature, stable business.

For portfolio construction, this setup demands a conviction buy approach. The valuation is not a signal to enter a broad market; it is a signal to overweight a specific structural tailwind. The high volatility and wide target range mean the stock is not a core holding for risk-averse investors. Instead, it is a satellite allocation for those willing to accept the premium and the attendant turbulence in exchange for exposure to a platform that is modernizing legacy finance at scale. The bottom line is that Figure's price is a function of its growth runway, not its current earnings, and the market is pricing in both its potential and its perils.

Portfolio Implications and Key Catalysts for 2026

For institutional portfolios, Figure represents a high-conviction, satellite allocation to a structural shift. The thesis hinges on the company capturing a meaningful share of the growing market for tokenized credit assets and blockchain-native funding channels. Bernstein's top pick call underscores this, framing Figure as a pure-play on the modernization of legacy banking infrastructure Figure upgrades legacy banking ledgers to the blockchain ledger. This is not a bet on a single product, but on a platform that is scaling faster than expected, with tokenized marketplace volumes and lending activity running ahead of internal projections tokenized marketplace volumes and lending activity are running well ahead of internal expectations.

The primary risk to this thesis is regulatory uncertainty. As blockchain technology moves from pilot to production scale, the legal consequences of tokenization structures are becoming more immediate and complex the legal consequences of how these technologies are structured, deployed, and governed have become more immediate and more complex. While 2026 starts with pro-innovation leadership at U.S. financial regulators-a key tailwind for institutional adoption 2026 starts with pro-innovation leadership in place at all the major U.S. financial regulators-the path is not without friction. Execution risk also remains, as the company must sustain its impressive financial trajectory while expanding into new lending categories and scaling its tokenized marketplace.

Key near-term catalysts will determine whether the growth premium is justified. First, investors must monitor quarterly revenue growth and, critically, the sustainability of the Adjusted EBITDA margin of 55%. This high-margin model is central to the scalability story; any deviation from this level would signal operational or competitive pressure. Second, watch for announcements of new lending categories and expansion of the tokenized marketplace, which are the engines for revenue optionality beyond core lending new loan categories and a rapidly scaling stablecoin yield product are expanding revenue optionality. Finally, track regulatory developments, as the pace of rulemaking and enforcement will directly impact the speed and cost of Figure's platform adoption.

The bottom line for portfolio construction is that Figure is a binary, high-volatility play. Its valuation demands flawless execution and a favorable regulatory arc. For allocators, the setup calls for a conviction buy with a clear exit discipline, using these quarterly metrics and regulatory signals as the primary inputs for monitoring the investment.