Pagaya Technologies Ltd (PGY) AI Stock Analysis

• Market Cap: $1.68B
• Dividend Yield: N/A
• Average Volume (3M): 2.24M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.42
• Revenue Growth: 25.84%
• EPS Growth: -248.65%
• Country: US
• Employees: 527
• Sector: Technology
• Sector Strength: 87
• Industry: Software - Infrastructure
• EPS (TTM): 0.10
• Shares Outstanding: 63,055,283
• 10 Day Avg. Volume: 2,784,089
• 30 Day Avg. Volume: 2,243,630
• PEG Ratio: -0.02
• Price to Book (P/B): 1.03
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -9.12
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 0.48
• Enterprise Value/Gross Profit: 4.32
• Enterprise Value/Ebitda: 6.56
• 1Y Price Target: $21.61
• Price Target Upside: -2.57% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 65 Neutral
• Price Target: $23.00 ▲(3.70%Upside)

Pagaya Technologies' stock score is positively influenced by strong earnings call results and technical momentum, indicating a favorable near-term outlook. However, financial performance is limited by high leverage and negative profitability, and valuation remains challenging due to negative P/E. Improving operational efficiencies and reducing debt could enhance the financial stability and valuation of the company.

Positive Factors

Earnings

PGY marked a significant milestone in 1Q25 with its first-ever quarter of positive GAAP net income as a public company, reaching that point earlier than expected.

Partnerships

The platform continues to win new partners, including an indirect win with Walmart’s OnePay for Buy Now, Pay Later, and is now positioned to expand their post-screening solution to help partners in their pre-screening efforts.

Negative Factors

Market Sentiment

Investors’ anxiety about the macroeconomic situation and markets has been reflected in PGY’s share price, which has declined by 38% over a month.

Operational Performance

The company’s network volume was below management’s guidance range due to lower volume from its lower-margin single-family rental (SFR) business.

Pagaya Technologies Ltd Business Overview & Revenue Model

Company Description

Pagaya Technologies Ltd (PGY) is a financial technology company that leverages artificial intelligence and machine learning to offer innovative solutions in the asset management and lending sectors. The company provides a platform that enhances credit and liquidity accessibility, optimizing the financial ecosystem for banks, fintechs, and institutional investors. Pagaya's core services include developing proprietary AI-driven models that analyze large datasets to improve decision-making processes in credit markets.

How the Company Makes Money

Pagaya Technologies Ltd generates revenue primarily through partnerships with financial institutions, where it applies its AI-driven models to enhance credit assessment and underwriting processes. The company earns fees from these institutions by improving their lending efficiencies and expanding their credit offerings, leading to increased loan origination volumes. Additionally, Pagaya manages investment portfolios for institutional investors, earning management fees based on the assets under management (AUM). Significant partnerships with banks and fintech companies contribute substantially to its earnings, as these collaborations allow Pagaya to scale its solutions across various financial products and markets.

Pagaya Technologies Ltd Financial Statement Overview

Summary

Pagaya Technologies shows strong revenue growth and effective cost management with a solid gross profit margin. However, continued net losses and high leverage are concerns, despite positive cash flow generation indicating potential resilience.

Income Statement

The company has shown consistent revenue growth, with a revenue growth rate of 4.5% in TTM (Trailing-Twelve-Months) compared to the previous year. Despite this, the company is still struggling with profitability, as evidenced by a negative net profit margin of -35.4% and negative net income. Gross profit margin is relatively healthy at 41.0%, suggesting effective cost management in production. However, EBIT and EBITDA margins are low at 10.2% and 10.5%, respectively, indicating challenges in covering operational expenses and achieving profitability.

Balance Sheet

The company has a high debt-to-equity ratio of 2.02, which indicates significant leverage and potential financial risk. The return on equity is negative at -110.9%, due to losses, which suggests issues in generating returns for shareholders. The equity ratio of 26.2% is moderate, indicating a balanced level of equity financing compared to total assets. Overall, the balance sheet reflects a leveraged position with potential risk due to high debt levels.

Cash Flow

Free cash flow has shown impressive growth at 37.1% in the TTM period, indicating improvements in cash generation. The operating cash flow to net income ratio is negative, reflecting the company's ongoing net losses, but operating cash flow has been positive, which is a favorable sign. Free cash flow to net income ratio is also negative, given the negative net income, yet the positive free cash flow suggests effective capital management. Overall, cash flow health shows positive trends despite net income challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.05B	1.00B	772.81M	685.41M	445.87M	91.74M
Gross Profit	430.40M	406.90M	263.87M	234.33M	213.54M	42.66M
EBITDA	110.28M	67.89M	-24.40M	-270.08M	-33.72M	14.00M
Net Income	-372.29M	-401.41M	-128.44M	-292.77M	-69.52M	19.92M
Balance Sheet
Total Assets	1.28B	1.29B	1.21B	1.05B	590.26M	204.27M
Cash, Cash Equivalents and Short-Term Investments	206.46M	195.72M	188.97M	310.80M	200.94M	62.63M
Total Debt	678.74M	680.81M	412.58M	212.26M	37.91M	2.47M
Total Liabilities	837.56M	849.53M	553.01M	279.66M	412.91M	116.13M
Stockholders Equity	335.49M	326.49M	559.72M	553.52M	1.29M	3.20M
Cash Flow
Free Cash Flow	66.87M	48.78M	-10.61M	-62.41M	43.19M	3.16M
Operating Cash Flow	83.24M	66.52M	9.58M	-40.00M	49.81M	4.26M
Investing Cash Flow	-297.41M	-498.64M	-412.69M	-265.42M	-140.74M	-122.76M
Financing Cash Flow	134.17M	436.69M	289.10M	437.92M	289.62M	119.50M

Pagaya Technologies Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 22.18
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PGY, the sentiment is Positive. The current price of 22.18 is above the 20-day moving average (MA) of 19.28, above the 50-day MA of 16.08, and above the 200-day MA of 12.10, indicating a bullish trend. The MACD of 1.68 indicates Negative momentum. The RSI at 72.43 is Negative, neither overbought nor oversold. The STOCH value of 82.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PGY.

Pagaya Technologies Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VRNT	74 Outperform	$1.29B	27.60	5.32%	―	-2.09%	76.96%
IIIV	73 Outperform	$963.29M	6.23	0.63%	―	-35.88%	4611.09%
YEXT	71 Outperform	$1.01B	―	-15.69%	―	8.38%	-278.88%
BASE	68 Neutral	$1.34B	―	-55.90%	―	12.76%	16.97%
PGY	65 Neutral	$1.68B	―	-77.37%	―	25.84%	-248.65%
CGNT	51 Neutral	$654.08M	―	-4.06%	―	―	―
Sector *	50 Neutral	AU$1.49B	1.75	-28.24%	3.26%	16.24%	-7.89%

Pagaya Technologies Ltd Corporate Events

Pagaya Technologies Reports Q1 2025 Profitability Turnaround

On May 7, 2025, Pagaya Technologies Ltd. reported its financial results for the first quarter ending March 31, 2025, highlighting a significant turnaround to GAAP profitability earlier than anticipated. The company achieved a net income of $8 million, a record adjusted EBITDA of $80 million, and total revenue of $290 million, marking substantial year-over-year growth. Pagaya also raised its full-year guidance for total revenue, GAAP net income, and adjusted EBITDA, indicating strong operational leverage and growing partner adoption. The company expanded its funding network with three new investors, raising $1.4 billion across three transactions in Q1, and expects continued growth in the second quarter and full year 2025.