Is Figure Technology (FIGR) Still a Buy Despite Elevated Valuation? A Contrarian Analysis of Growth and Risk

The debate over Figure Technology Solutions (FIGR) has intensified in recent months, as the fintech innovator's stock has surged on the back of blockbuster earnings and a high-profile IPO. With a price-to-sales (P/S) ratio of 30.6x and a price-to-earnings (PE) ratio of 134.4x-far exceeding industry averages-FIGR's valuation has drawn both admiration and skepticism. For investors, the question looms: Is this blockchain-driven lender still a compelling buy, or has the market already priced in all its potential?

Valuation Metrics: A Double-Edged Sword

FIGR's financial performance in Q3 2025 was nothing short of extraordinary. Net revenue grew 55% year-over-year to $156 million, while net income skyrocketed 227% to $90 million, and adjusted EBITDA surged 75% to $86 million. These results, coupled with a 16.22% premarket rally following the earnings report, have fueled bullish sentiment. However, such momentum has pushed FIGR's valuation to stratospheric levels.

Data from Yahoo Finance indicates that FIGR's P/S ratio of 30.6x dwarfs the US Consumer Finance industry average of 1.4x and the peer group average of 2.1x. Similarly, its PE ratio of 134.4x is significantly higher than the industry's 9.7x and peer average of 16.7x. A discounted cash flow (DCF) analysis by SWS further underscores the disconnect, suggesting a fair value of just $9.35 per share-well below the current price according to Yahoo Finance. These metrics raise a critical question: Is FIGR's valuation a reflection of its disruptive potential, or is it a bubble waiting to burst?

Growth Potential: Blockchain as a Catalyst

Proponents argue that FIGR's valuation is justified by its transformative business model. The company's proprietary Provenance blockchain platform claims to reduce securitization costs by up to 85 basis points, streamlining financial workflows and cutting out intermediaries. This innovation has driven a 70% year-over-year increase in consumer loan marketplace volume to $2.5 billion, with Figure Connect contributing $1.1 billion in Q3 according to Q3 2025 results. Analysts project a 33% compound annual growth rate in revenue and a 133% CAGR in net income over the next three years, suggesting that the company's scalability could outpace traditional peers.

Moreover, FIGR's IPO in September 2025 raised $663 million in net proceeds, providing capital to expand its blockchain initiatives and maintain EBITDA margins above 60% according to market data. With a strategic focus on home equity lending and real-world asset finance, the company is positioning itself at the intersection of fintech and blockchain-a sector with immense long-term potential.

Contrarian Concerns: Risks in the High-Flying Narrative

Despite the optimism, several red flags warrant scrutiny. First, FIGR's valuation hinges on the assumption that its blockchain-driven model will continue to scale rapidly. However, regulatory uncertainty looms large. The SEC's ongoing scrutiny of blockchain-based financial products could disrupt FIGR's operations, particularly in home equity lending and securitization. A single regulatory misstep could derail investor confidence.

Second, macroeconomic headwinds pose a threat. While FIGR's Q3 results benefited from a surge in consumer loan demand, a potential recession or interest rate hike could curb borrowing activity. Analysts at Zacks note that the company's earnings estimates have risen by 0.7% in the past month, but this optimism may not hold if broader economic conditions deteriorate.

Finally, competition in the fintech and blockchain spaces is intensifying. Traditional lenders and tech giants are increasingly investing in decentralized finance (DeFi) solutions, which could erode FIGR's first-mover advantage. For now, the company's 55.4% EBITDA margin according to Q3 2025 results suggests strong operational efficiency, but maintaining this edge will require continuous innovation.

The Verdict: A High-Risk, High-Reward Proposition

For contrarian investors, FIGR presents a paradox. On one hand, its financial metrics and blockchain-driven growth story are compelling. On the other, its valuation appears disconnected from reality. The key to unlocking value lies in whether the company can sustain its current trajectory while navigating regulatory and macroeconomic risks.

Wall Street analysts remain divided, with a mean 12-month price target of $49.11 implying a 31.7% upside from the November 2025 closing price of $37.29 according to market analysis. However, the wide range of targets-from $40 to $56-reflects uncertainty. For those with a long-term horizon and a tolerance for volatility, FIGR could still be a buy. But for risk-averse investors, the elevated multiples and looming challenges suggest caution.

In the end, FIGR's story is one of innovation and ambition. Whether it becomes a market darling or a cautionary tale will depend on its ability to execute against its bold vision.