Shares of Figure Technology Solutions Inc (NASDAQ:FIGR) edged lower in early trading on Friday, after the company reported its second-quarter results.

Figure Technology Solutions reported triple-digit growth in loan marketplace volume and guided to similar growth in the third quarter, suggesting that the company’s ecosystem "is still in the early innings of a multi-year growth story," according to Needham.

The Figure Technology Solutions Analyst: Analyst Kyle Peterson reaffirmed a Buy rating and price target of $55.

The Figure Technology Solutions Thesis: While the company delivered another strong quarter, there is "even further upside" to the company’s full-year revenue and earnings outlook from the closing of the pending acquisition of Kiavi, Peterson said in the note.

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He highlighted the following from Figure Technology Solutions’ latest results:

  • Loan marketplace volume grew 131.8% year-on-year to $4.3 billion.
  • Strong marketplace volume growth drove adjusted net revenue to $218.4 million, topping consensus of $208.2 million.
  • Adjusted EBITDA came in at $119.4 million, beating consensus of $110.4 million due to volume growth and positive operating leverage.
  • GAAP earnings of 35 cents per share handsomely surpassed Street expectations of 24 cents per share.

The analyst noted that management’s third-quarter volume outlook was "impressive," pointing to consumer loan marketplace volume of $4.8 billion-$5.2 billion, which implies around 102.5% year-on-year growth at the midpoint.

"We believe this could be conservative as the company did $1.7 billion in volume and July is quickly scaling other asset classes such as auto and SMB loans," he further wrote.

With Figure Connect scaling faster than anticipated, there is upside to volume estimates, and investors should "look past the slight take rate compression, as it is largely being driven by the shift towards Figure Connect," Peterson stated.

He added that Figure Technology Solutions remains Needham’s "Top Pick" in the segment.

FIGR Stock Price Activity: Figure Technology shares were down 1.29% at $31.47 on Friday, according to Benzinga Pro data.

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