Home loan-focused fintech Figure Technology Solutions (FIGR +3.80%) felt like an investment that was safe as houses, as the saying goes, in the trading week shortened by Friday's market holiday. Investors were particularly cheered by a bullish analyst note that supported the stock's buy case.
Sure enough, it rose by over 21% across those four business days, according to data compiled by S&P Global Market Intelligence.
On Tuesday, Needham prognosticator Kyle Peterson reiterated his buy recommendation on Figure stock and his $55-per-share price target. That is a robust 62% above the stock's most recent closing level.
Image source: Getty Images.
According to reports, Peterson believes the stock was oversold following the lock-up expiration — the first date at which stockholders of a company that recently launched an IPO can sell their "locked up" shares.
This occurred in mid-March, and the analyst wrote that it was a drag on the fintech's price despite positive developments in its business (such as the acquisition it announced last month of a peer company, Kiavi). Peterson added that Figure continues to build out a differentiated marketplace for credit. This should expand its reach and positively affect the fundamentals if managed effectively.
Figure certainly has an intriguing business strategy centered on using blockchain and artificial intelligence (AI) solutions to automate mortgage and home equity line of credit (HELOC) services.
Operating on the Provenance blockchain cuts out the middleman — like clearing houses and title registries — for such products. The company's AI models, meanwhile, bring significant, next-generation computing power to bear on credit analysis.
The devotion to such technology represents an evolution of a typically very traditional business. And having that kind of edge makes Figure a company with good potential that's well worth keeping an eye on.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
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One of the company's bulls issued a glowing update on its prospects.
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