Pagaya Technologies Ltd (PGY) AI Stock Analysis

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Pagaya Technologies Ltd

(NASDAQ:PGY)

Rating:68Neutral

Price Target:

$34.00

▲(1.43% Upside)

Pagaya Technologies Ltd's overall stock score is driven by strong earnings call results and positive technical indicators, indicating potential for growth. However, the score is moderated by financial performance concerns, particularly high leverage and negative profitability, as well as valuation challenges with a negative P/E ratio. The company's ability to maintain momentum and improve financial stability will be key to future performance.

Positive Factors

Earnings

Pagaya Technologies’ strong operating momentum and bullish new guidance for upcoming quarters signal that the company’s breakout may be just beginning.

Financial Performance

The company's record adjusted EBITDA, accelerating network volume, and upgrades to its funding model showcase a Fintech platform firing on all cylinders.

Growth Potential

The company is expected to drive additional share price gains as it continues to grow across the personal, auto, and point-of-sale loan verticals, leveraging AI to credit underwriting at scale.

Negative Factors

Funding Concerns

PGY noted that its preannouncement was a means to proactively optimize its balance sheet and lower the cost of capital on its existing debt, and it neither needs nor plans to issue equity or equity-linked instruments in the foreseeable future.

Network Volume

The company pulled back on SFR volume, which was relatively immaterial to revenue and resulted in network volume being below expectations.

Pagaya Technologies Ltd (PGY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.57B

Dividend YieldN/A

Average Volume (3M)3.59M

Price to Earnings (P/E)―

Beta (1Y)2.41

Revenue Growth26.24%

EPS Growth-94.81%

CountryUS

Employees527

SectorTechnology

Sector Strength94

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)0.20

Shares Outstanding65,319,850

10 Day Avg. Volume4,476,145

30 Day Avg. Volume3,592,752

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.94

Enterprise Value/Revenue2.29

Enterprise Value/Gross Profit5.60

Enterprise Value/Ebitda21.85

Forecast

1Y Price Target

$37.90

Price Target Upside13.07% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering10

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 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 Key Performance Indicators (KPIs)

Any

Revenue From Fees

Revenue From Fees
Shows the income generated from service fees, highlighting the company's ability to monetize its platform and sustain its business model.

Chart InsightsPagaya Technologies is experiencing robust growth in revenue from fees, with a consistent upward trajectory over recent quarters. This aligns with the company's earnings call, which highlighted an 18% year-over-year revenue increase and a 26% rise in fee revenue less production costs. The strategic expansion in lending partnerships and a diversified funding structure are driving this momentum, while the achievement of positive GAAP net income underscores operational efficiency. Despite minor challenges in network volume, the company projects continued revenue growth and profitability improvements for 2025.

Data provided by:

Main Street Data

Pagaya Technologies Ltd Earnings Call Summary

Earnings Call Date:Aug 07, 2025

(Q2-2025)

% Change Since: 6.89%|

Next Earnings Date:Nov 06, 2025

Earnings Call Sentiment Positive

The earnings call showcased several record-breaking achievements in income and revenue, supported by successful funding initiatives and strong credit performance. However, challenges such as onboarding delays with bank partners and significant one-time costs impacting net income were noted. Despite these challenges, the overall outlook remains strong.

Q2-2025 Updates

Positive Updates

Record-Breaking GAAP Net Income

Pagaya reported its second consecutive quarter of positive GAAP net income at a record high of $17 million.

Record Revenue

Total revenues reached a record $326 million, with $126 million in revenues from fee less production costs and $86 million in adjusted EBITDA.

Diverse Funding and Growth

Pagaya added roughly $5 billion in forward flow capacity since the end of 2024, representing 25% of their overall funding mix.

Successful Corporate Bond Issuance

Pagaya successfully raised $500 million through its first corporate bond issuance, reducing the cost of debt from approximately 11% to approximately 9%.

Strong Credit Performance

Credit performance remains strong and stable with personal loan net losses trending 30% to 40% lower than peak levels.

New Partner Pipeline

Pagaya is in late-stage discussions with several banks and fintechs, with some already in the onboarding stage.

Negative Updates

Onboarding Delays with Banks

The onboarding process for new bank partners can take 6 to 9 months due to rigorous compliance and risk management processes.

Interest Expense

Interest expense was $23 million in the quarter, though expected to decrease following the recent unsecured note issuance.

One-Time Costs Impacting Net Income

For Q3 and full year 2025, GAAP net income guidance includes approximately $24 million in costs associated with the issuance of corporate bonds and early retirement of existing credit lines.

Company Guidance

In the Pagaya 2Q 2025 earnings call, the company reported a record GAAP net income of $17 million, marking their second consecutive quarter of profitability. Total revenue reached $326 million, with $126 million coming from fee less production costs and an adjusted EBITDA of $86 million. Pagaya raised its full-year financial outlook, citing strong growth, unit economics, and an increased partner pipeline. The company saw a significant diversification in its platform, with point-of-sale and auto lending originations rising to 30% from 9% a year ago. On the funding side, Pagaya expanded its forward flow capacity by $5 billion, representing 25% of their overall funding mix. They also issued a $500 million corporate bond, which reduced their cost of debt and enhanced cash flow. For the third quarter of 2025, Pagaya expects network volume between $2.75 billion and $2.95 billion, with total revenue ranging from $330 million to $350 million. Adjusted EBITDA is projected between $90 million and $100 million, and GAAP net income is anticipated to be between $10 million and $20 million. The full-year guidance was revised to network volumes of $10.5 billion to $11.5 billion, total revenue of $1.25 billion to $1.325 billion, and adjusted EBITDA between $345 million and $370 million, with GAAP net income ranging from $55 million to $75 million.

Pagaya Technologies Ltd Financial Statement Overview

Summary

Pagaya Technologies Ltd demonstrates strong revenue growth and effective cost management with a solid gross profit margin. However, profitability remains a concern due to continued net losses and high leverage, as reflected in its balance sheet. While cash flow generation has been positive, indicating potential for financial resilience, high debt levels present a risk. Improvement in operational efficiencies and reduction of leverage is needed to enhance financial stability.

Income Statement

Positive

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

Neutral

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

Positive

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.00B	772.81M	685.41M	445.87M	91.74M
Gross Profit	406.90M	263.87M	234.33M	213.54M	42.66M
EBITDA	67.89M	-24.40M	-270.08M	-33.72M	14.00M
Net Income	-401.41M	-128.44M	-292.77M	-69.52M	19.92M
Balance Sheet
Total Assets	1.29B	1.21B	1.05B	590.26M	204.27M
Cash, Cash Equivalents and Short-Term Investments	195.72M	188.97M	310.80M	200.94M	62.63M
Total Debt	680.81M	412.58M	212.26M	37.91M	2.47M
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	48.78M	-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

Technical Analysis Sentiment

Positive

Last Price33.52

Price Trends

50DMA

25.13

Positive

100DMA

18.77

Positive

200DMA

14.77

Positive

Market Momentum

MACD

2.03

Positive

RSI

63.07

Neutral

STOCH

42.59

Neutral

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 33.52 is above the 20-day moving average (MA) of 31.28, above the 50-day MA of 25.13, and above the 200-day MA of 14.77, indicating a bullish trend. The MACD of 2.03 indicates Positive momentum. The RSI at 63.07 is Neutral, neither overbought nor oversold. The STOCH value of 42.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PGY.

Pagaya Technologies Ltd Risk Analysis

Pagaya Technologies Ltd disclosed 2 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 (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IIIV	73 Outperform	$1.03B	6.44	4.11%	―	-29.93%	389400.00%
VRNT	69 Neutral	$1.19B	25.47	5.32%	―	-2.09%	76.96%
PGY	68 Neutral	$2.57B	―	-62.92%	―	26.24%	-94.81%
BASE	68 Neutral	$1.34B	―	-55.90%	―	12.76%	16.97%
YEXT	66 Neutral	$981.63M	―	-15.69%	―	8.38%	-278.88%
Sector *	57 Neutral	HK$14.47B	9.47	-0.60%	4.33%	7.09%	-37.88%
CGNT	53 Neutral	$628.18M	―	-4.06%	―	―	―

* Technology Sector Average

Performance Comparison

PGY

Pagaya Technologies Ltd

33.30

21.37

179.13%

VRNT

Verint Systems

19.49

-13.31

-40.58%

YEXT

Yext

8.09

3.13

63.10%

IIIV

I3 Verticals

31.36

9.80

45.45%

CGNT

Cognyte Software

8.77

1.38

18.67%

BASE

Couchbase

24.34

6.23

34.40%

Pagaya Technologies Ltd Corporate Events

Private Placements and FinancingBusiness Operations and StrategyFinancial Disclosures

Pagaya Technologies Reports Strong Q2 2025 Results

Positive

Aug 7, 2025

On August 7, 2025, Pagaya Technologies Ltd. reported its financial results for the second quarter and first half of 2025, showcasing a second consecutive quarter of positive GAAP net income and raising its full-year guidance. The company achieved record performance across key metrics, including a net income of $17 million, adjusted EBITDA of $86 million, and total revenue of $326 million. Pagaya also issued its first AAA-rated Auto ABS and Point-of-Sale ABS structures and successfully issued $500 million in senior unsecured notes. These results highlight Pagaya’s disciplined execution and strategic growth in its lending and funding network, positioning it as a unique player in bridging Wall Street and Main Street.