Figure Technology Solutions (NASDAQ:FIGR) shares fell about 17% on Tuesday after Bank of America downgraded the fintech firm, saying the stock’s strong post-IPO rally has left much of its future growth already priced in.
The brokerage cut its rating on Figure Technology to “underperform” from “neutral” and trimmed its price objective to $42 from $43.
In a note, Bank of America said Figure’s valuation has become stretched after the stock surged 109% in the five months since its September initial public offering, even as comparable companies and cryptocurrencies have underperformed.
“Growth opportunities appear more than fully baked in the cake,” the analysts wrote, noting that Figure now trades at about 35 times estimated 2028 earnings, compared with 19 times for Coinbase Global, which they see as a key comparable.
Bank of America highlighted that Figure’s shares have outperformed Coinbase by roughly 150 percentage points since the IPO, while short interest in Figure remains low at around 2%. The analysts also pointed to insider selling activity in the fourth quarter of 2025 as another factor behind the downgrade.
While the brokerage acknowledged Figure’s strong execution since going public, it expressed concerns about the scalability of the company’s loan origination system, particularly among large banks. Bank of America said major lenders may be reluctant to adopt Figure’s platform because it focuses on a relatively narrow set of loan products and because many banks prefer to keep loans on their own balance sheets.
The analysts also cautioned that Figure’s exposure to crypto-related offerings means it is not fully insulated from broader headwinds affecting digital asset markets, even though its core growth strategy is centered on using blockchain technology to disrupt the home equity line of credit market.
Bank of America raised its estimate for fourth-quarter 2025 earnings per share to $0.20 from $0.16, citing recent disclosures showing $2.7 billion in consumer loan marketplace volume. However, it lowered longer-term earnings forecasts for 2026 through 2028 due to higher expected operating expenses.
“Recent performance and near-term momentum are encouraging,” the analysts wrote, adding that the stock could still react positively to earnings when Figure reports results on February 26. “That said, we believe the good news is already reflected in the valuation and prefer to wait for a more attractive entry point.”