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Pagaya Technologies Ltd (PGY)
NASDAQ:PGY
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Pagaya Technologies Ltd
(NASDAQ:PGY)
56Neutral
Positive Factors
Growth and Self-funding
The company achieved a milestone by being able to self-fund its growth, which was reached in the fourth quarter of 2024.
Revenue and Profitability
Shares of Pagaya Technologies (PGY) rallied by more than 23% after the company released a 4Q24 report that included total revenue and adjusted EBITDA that exceeded Street estimates and the higher ends of management’s guidance ranges.
Valuation and Growth Prospects
The company's valuation is believed to be undervalued compared to peers, especially considering its growth prospects and platform stabilization.
Negative Factors
Credit-related Adjustments
The company’s 4Q24 report included a credit-related fair value adjustment of $156m stemming from the 2021-2023 loans – a figure more than twice as large as the $70m adjustment reported in the prior quarter.
Macroeconomic Concerns
Investors’ anxiety about the macroeconomic situation and markets has been reflected in PGY’s share price, which has declined by 38%.
Pagaya Technologies Ltd (PGY) vs. S&P 500 (SPY)
Market Cap
$711.57M
Dividend YieldN/A
Average Volume (3M)1.79M
Price to Earnings (P/E)―
Beta (1Y)2.60
Revenue Growth29.99%
EPS Growth-154.23%
CountryUS
Employees553
SectorTechnology
Sector Strength45
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-5.50
Shares Outstanding62,646,027
10 Day Avg. Volume2,027,033
30 Day Avg. Volume1,786,683
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.83
Price to Cash Flow (P/CF)6.70
P/FCF Ratio6.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$20.57Price Target Upside117.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Pagaya Technologies Ltd Business Overview & Revenue Model
Company DescriptionPagaya Technologies Ltd. operates as a financial technology company in Israel, the United States, and the Cayman Islands. It develops and implements proprietary artificial intelligence technology and related software solutions to assist partners to originate loans and other assets. Its partners include high-growth financial technology companies, incumbent financial institutions, auto finance providers, and brokers. The company was founded in 2016 and is headquartered in Tel Aviv, Israel.
How the Company Makes MoneyPagaya Technologies Ltd primarily generates revenue through its technology platform, which is offered to institutional investors and financial institutions. The company earns money by charging fees for access to its AI-driven analytics and data solutions that help optimize investment portfolios and manage risk. Additionally, Pagaya may receive performance-based fees or a share of the profits generated from the investment strategies it helps to implement. Significant partnerships with large financial institutions and asset managers contribute to its earnings by expanding its client base and enhancing the scalability of its platform.
Pagaya Technologies Ltd Financial Statement Overview
Summary
Pagaya Technologies Ltd shows strong revenue growth, but faces challenges in profitability and debt management. The company needs to address high debt levels and improve its cost management to convert revenue growth into sustainable profit margins.Income Statement
Pagaya Technologies Ltd has shown significant revenue growth over the years, with a notable increase in total revenue from 2023 to 2024. However, the company is struggling with profitability, as indicated by negative net income and fluctuating EBIT and EBITDA margins. Despite the revenue growth, the company needs to focus on improving its cost management and profitability metrics.65
Positive
Balance Sheet
The company's balance sheet reveals a concerning debt-to-equity ratio, which has increased over the years. Although stockholders' equity has grown, the rising total debt poses a risk to financial stability. The equity ratio remains relatively low, indicating a higher reliance on debt financing.55
Neutral
Cash Flow
Pagaya Technologies Ltd has improved its operating cash flow, with positive free cash flow in the latest year. However, the cash flow from investing activities is significantly negative, which may indicate heavy investment in growth. The operating cash flow to net income ratio suggests challenges in converting profits into cash, necessitating better cash management.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.03B | 772.81M | 685.41M | 445.87M | 91.74M | Gross Profit |
| 434.60M | 263.87M | 234.33M | 213.54M | 42.66M | EBIT |
| 66.84M | -24.40M | -315.02M | -34.53M | 13.71M | EBITDA |
| 67.89M | -24.40M | -270.08M | -33.72M | 14.00M | Net Income Common Stockholders |
| -401.41M | -128.44M | -292.77M | -69.52M | 19.92M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 187.92M | 188.97M | 310.80M | 200.94M | 62.63M | Total Assets |
| 1.29B | 1.21B | 1.05B | 590.26M | 204.27M | Total Debt |
| 358.38M | 412.58M | 212.26M | 37.91M | 2.47M | Net Debt |
| 170.46M | 226.11M | -97.53M | -152.87M | -2.60M | Total Liabilities |
| 849.53M | 553.01M | 279.66M | 412.91M | 116.13M | Stockholders Equity |
| 326.49M | 559.72M | 553.52M | 1.29M | 3.20M |
| Cash Flow | Free Cash Flow | |||
| 66.52M | -10.61M | -62.41M | 43.19M | 3.16M | Operating Cash Flow |
| 66.52M | 9.58M | -40.00M | 49.81M | 4.26M | Investing Cash Flow |
| -498.64M | -412.69M | -265.42M | -140.74M | -122.76M | Financing Cash Flow |
| 436.69M | 289.10M | 437.92M | 289.62M | 119.50M |
Pagaya Technologies Ltd Technical Analysis
Negative
9.45
Price Trends
11.54
Negative
10.57
Negative
11.47
Negative
Market Momentum
-0.51
Positive
43.07
Neutral
51.86
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PGY, the sentiment is Negative. The current price of 9.45 is below the 20-day moving average (MA) of 10.35, below the 50-day MA of 11.54, and below the 200-day MA of 11.47, indicating a bearish trend. The MACD of -0.51 indicates Positive momentum. The RSI at 43.07 is Neutral, neither overbought nor oversold. The STOCH value of 51.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PGY.
Pagaya Technologies Ltd Risk Analysis
Pagaya Technologies Ltd disclosed 1 risk factors in its most recent earnings report. Pagaya Technologies Ltd reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Pagaya Technologies Ltd Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $841.10M | 5.32 | 1.23% | ― | -27.40% | 21780.54% | |
67 Neutral | $993.59M | 16.40 | 6.35% | ― | -0.13% | 263.78% | |
61 Neutral | $772.82M | ― | -18.61% | ― | 4.11% | -935.85% | |
58 Neutral | $10.03B | 10.00 | -6.85% | 3.09% | 7.49% | -11.58% | |
57 Neutral | $683.94M | ― | -6.09% | ― | ― | ― | |
56 Neutral | $711.57M | ― | -90.59% | ― | 29.99% | -154.23% | |
55 Neutral | $790.66M | ― | -57.86% | ― | 16.35% | 14.27% |
* Technology Sector Average
Performance Comparison
PGY
Pagaya Technologies Ltd
9.45
0.44
4.88%
VRNT
Verint Systems
15.99
-13.17
-45.16%
YEXT
Yext
6.11
0.59
10.69%
IIIV
I3 Verticals
25.15
2.63
11.68%
CGNT
Cognyte Software
9.50
2.86
43.07%
BASE
Couchbase
14.89
-8.16
-35.40%
Pagaya Technologies Ltd Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -19.78% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook with strong financial performance in 2024, record FRLPC, and adjusted EBITDA growth. The company is expanding its partnerships and improving funding mechanisms. However, significant fair value adjustments and high risk retention from past vintages impacted results. Despite these challenges, the guidance for GAAP profitability in 2025 suggests a positive trajectory.Highlights
Strong Financial Performance in 2024
Annual revenue exceeded $1 billion, up 27% year-over-year, with FRLPC of $407 million, up 54% year-over-year, and adjusted EBITDA of $210 million, up 156% year-over-year.
Record FRLPC and Adjusted EBITDA Growth
FRLPC as a percent of network volume reached a record 4.5%, and adjusted EBITDA grew 88% year-over-year, indicating strong monetization and operating leverage.
Significant Funding and Partner Expansion
Announced a forward flow agreement with Blue Owl Capital to purchase up to $2.4 billion in consumer loans. Completed onboarding of OneMain Financial, and expanded partnerships with Klarna and U.S. Bank’s Elavon.
Positive Outlook for 2025
Guidance for GAAP net income profitability by Q2 2025 with expected network volume growth and diversified funding sources.
Lowlights
Significant Fair Value Adjustments
Fair value adjustments resulted in a net loss, driven primarily by 2023 vintages marked down by $145 million due to challenging funding conditions.
High Risk Retention Impact
Net risk retention levers remain high, impacting the overall financial performance despite improvements in funding efficiency.
Company Guidance
During the Pagaya Technologies' earnings call for the fourth quarter and full year 2024, the company provided its financial guidance for the first quarter and full year of 2025, highlighting a robust performance and optimistic outlook. The company reported an annual revenue exceeding $1 billion for 2024, reflecting a 27% year-over-year increase. Key metrics included a fee revenue less production costs (FRLPC) of $407 million, up 54% year-over-year, and adjusted EBITDA of $210 million, marking a 156% increase year-over-year. Pagaya is targeting GAAP net income profitability by the second quarter of 2025, reflecting confidence in consistent growth and operational efficiency. The company anticipates network volume for 2025 to range between $10.25 billion and $11.75 billion, with total revenue projected between $1.15 billion and $1.275 billion, and adjusted EBITDA between $265 million and $315 million. The guidance underscores Pagaya's strategic efforts to enhance its financial structure, optimize funding mechanisms, and bolster its lending partner network, positioning the company for sustained profitability and growth in 2025.Pagaya Technologies Ltd Corporate Events
Private Placements and FinancingFinancial Disclosures
Pagaya Technologies Ltd Reports Strong 2024 Financial Results
Positive
Feb 13, 2025
On February 13, 2025, Pagaya Technologies Ltd announced its fourth quarter and full year 2024 financial results, marking a strong performance with all key metrics surpassing guidance. The company reported a record network volume of $2.6 billion in the fourth quarter and $9.7 billion for the full year, driven mainly by personal loans. Pagaya also raised $6 billion through asset-backed securitizations in 2024, maintaining its position as the leading personal loan ABS issuer in the US. The company anticipates achieving GAAP net income profitability in the second quarter of 2025, signaling a robust financial outlook for the upcoming year.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.