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PGY vs. TREE: Which Disruptive Lending Platform Has More Upside Ahead?
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Key Takeaways
Pagaya is expanding beyond personal loans into auto and point-of-sale financing to diversify exposure.
PGY's forward flow agreements and ABS model help it stay capital-light and manage market volatility.
TREE projects 2025 EBITDA of $116-$126M, but PGY expects stronger earnings and revenue growth ahead.
Pagaya Technologies Ltd. (PGY - Free Report) and LendingTree, Inc. (TREE - Free Report) are fintech firms focused on transforming the lending space. Pagaya uses artificial intelligence (AI)-powered machine learning to optimize credit underwriting and securitization, while LendingTree operates an online lending marketplace connecting borrowers with lenders.
So, can PGY’s AI-powered growth momentum subdue TREE’s proven marketplace supremacy? While both face headwinds from shifting consumer spending patterns and market uncertainties, let’s decipher which stock is better placed for long-term growth.
The Case for Pagaya
Pagaya’s strength lies in its adaptable business model and capital-efficient structure. While initially focusing on personal loans, the company has expanded into auto lending and point-of-sale financing, reducing exposure to any single loan type and improving resilience across economic cycles.
To diversify its funding, PGY has built a network of more than 135 institutional partners and utilizes forward flow agreements—pre-arranged deals where investors commit to buying future loans. These agreements offer funding stability, especially during market disruptions.
A key differentiator is Pagaya’s proprietary tech and product suite. Its Pre-screen solution allows lenders to present pre-approved offers to existing customers without formal applications, helping partners boost credit access and deepen relationships with minimal marketing spend.
Additionally, Pagaya operates with minimal on-balance-sheet exposure. Loans are typically acquired immediately by asset-backed securities (ABS) vehicles or via forward flow agreements, thanks to capital raised in advance. This approach limits credit and market risk, preserving flexibility during turbulent environments.
This model proved effective from 2021 to 2023 amid rising rates and tighter markets. By relying on forward flow agreements and strategic ABS issuance, Pagaya maintained liquidity and minimized loan write-downs. As of March 31, 2025, the company held $206.5 million in cash and short-term investments against $507.8 million in debt, supporting its capital-light growth trajectory.
The Case for LendingTree
LendingTree, an online marketplace that connects consumers with financial service providers for mortgages, loans, credit cards and insurance, is a key player in the growing digital lending space. The company’s operating strategy has been evolving, with a notable shift in focus toward boosting top line by diversifying into non-mortgage products, particularly in the Consumer segment.
Over the years, the company has expanded its services to include credit cards and widened its loan offerings by providing personal, auto, small business and student loans. LendingTree entered the branded credit market in 2023 with the launch of the WinCard, its first consumer credit product, in partnership with Upgrade. The company’s initiatives, including SPRING (previously MyLendingTree) and TreeQual, are bolstering its cross-selling opportunities.
Further, LendingTree is leveraging data and technology to augment user experience and monetization. The company’s strategic investment in EarnUp (in early 2022), a consumer-facing payments platform, demonstrates its commitment to building a more comprehensive, tech-enabled ecosystem for financial health management.
TREE intends to continue adding offerings for consumers, small businesses and network partners to its online marketplace to expand and diversify its revenue sources. This has led to a CAGR of 3.3% in non-mortgage revenue streams over the past three years.
TREE expects its 2025 adjusted EBITDA to be $116-$126 million, suggesting an increase of 11-21% from the 2024 level.
PGY & TREE: Price Performance, Valuation & Other Comparisons
This year, shares of Pagaya have performed extremely well given the bullish investor sentiments. The stock has soared 130.3%, while TREE has lost 4.6% so far this year. Hence, in terms of investor sentiments, PGY has the edge.
Image Source: Zacks Investment Research
From a valuation perspective, Pagaya is currently trading at a 12-month trailing price-to-book (P/B) of 3.66X, while the TREE stock is trading at a 12-month trailing P/B of 4.66X.
Image Source: Zacks Investment Research
So, PGY is inexpensive compared to LendingTree.
Pagaya’s return on equity (ROE) of 9.28% is below LendingTree’s 14.76%. This reflects that TREE is more efficiently using shareholder funds to generate profits.
Image Source: Zacks Investment Research
Pagaya & LendingTree’s Prospects
The Zacks Consensus Estimate for PGY’s 2025 and 2026 revenues implies year-over-year growth of 19.9% and 15.7%, respectively. The company expects total revenues and other income to be between $1.175 billion and $1.3 billion. Last year, the metric was $1.032 billion.
The consensus estimate for PGY earnings indicates a 195.2% and 28% jump for 2025 and 2026, respectively. Also, management projects net income (GAAP) to be in the range of $10-$45 million for 2025.
Image Source: Zacks Investment Research
On the contrary, the Zacks Consensus Estimate for TREE’s 2025 and 2026 revenues implies year-over-year growth of just 9.2% and 6.4%, respectively. For 2025, the company projects total revenues to be between $955 million and $995 million. In 2024, total revenues were $900.2 million.
Also, the consensus estimate for LendingTree’s earnings indicates 43.9% growth for 2025, while for 2026, earnings are expected to decline 3.5%.
Image Source: Zacks Investment Research
PGY or TREE: Which Stock Deserves a Spot in Your Portfolio?
Pagaya is scaling rapidly with its flexible, capital-light model, AI-powered lending solutions and a strong network of funding partners. Its significantly stronger revenue and earnings growth outlook compared with LendingTree enhances its appeal as a high-upside investment opportunity.
While TREE boasts a well-established marketplace model and superior ROE, its revenue and earnings growth are decelerating. Given PGY’s compelling growth trajectory and its more attractive valuation, it appears better positioned for long-term gains, despite TREE’s relative operational maturity and stability.
Image: Bigstock
PGY vs. TREE: Which Disruptive Lending Platform Has More Upside Ahead?
Key Takeaways
Pagaya Technologies Ltd. (PGY - Free Report) and LendingTree, Inc. (TREE - Free Report) are fintech firms focused on transforming the lending space. Pagaya uses artificial intelligence (AI)-powered machine learning to optimize credit underwriting and securitization, while LendingTree operates an online lending marketplace connecting borrowers with lenders.
So, can PGY’s AI-powered growth momentum subdue TREE’s proven marketplace supremacy? While both face headwinds from shifting consumer spending patterns and market uncertainties, let’s decipher which stock is better placed for long-term growth.
The Case for Pagaya
Pagaya’s strength lies in its adaptable business model and capital-efficient structure. While initially focusing on personal loans, the company has expanded into auto lending and point-of-sale financing, reducing exposure to any single loan type and improving resilience across economic cycles.
To diversify its funding, PGY has built a network of more than 135 institutional partners and utilizes forward flow agreements—pre-arranged deals where investors commit to buying future loans. These agreements offer funding stability, especially during market disruptions.
A key differentiator is Pagaya’s proprietary tech and product suite. Its Pre-screen solution allows lenders to present pre-approved offers to existing customers without formal applications, helping partners boost credit access and deepen relationships with minimal marketing spend.
Additionally, Pagaya operates with minimal on-balance-sheet exposure. Loans are typically acquired immediately by asset-backed securities (ABS) vehicles or via forward flow agreements, thanks to capital raised in advance. This approach limits credit and market risk, preserving flexibility during turbulent environments.
This model proved effective from 2021 to 2023 amid rising rates and tighter markets. By relying on forward flow agreements and strategic ABS issuance, Pagaya maintained liquidity and minimized loan write-downs. As of March 31, 2025, the company held $206.5 million in cash and short-term investments against $507.8 million in debt, supporting its capital-light growth trajectory.
The Case for LendingTree
LendingTree, an online marketplace that connects consumers with financial service providers for mortgages, loans, credit cards and insurance, is a key player in the growing digital lending space. The company’s operating strategy has been evolving, with a notable shift in focus toward boosting top line by diversifying into non-mortgage products, particularly in the Consumer segment.
Over the years, the company has expanded its services to include credit cards and widened its loan offerings by providing personal, auto, small business and student loans. LendingTree entered the branded credit market in 2023 with the launch of the WinCard, its first consumer credit product, in partnership with Upgrade. The company’s initiatives, including SPRING (previously MyLendingTree) and TreeQual, are bolstering its cross-selling opportunities.
Further, LendingTree is leveraging data and technology to augment user experience and monetization. The company’s strategic investment in EarnUp (in early 2022), a consumer-facing payments platform, demonstrates its commitment to building a more comprehensive, tech-enabled ecosystem for financial health management.
TREE intends to continue adding offerings for consumers, small businesses and network partners to its online marketplace to expand and diversify its revenue sources. This has led to a CAGR of 3.3% in non-mortgage revenue streams over the past three years.
TREE expects its 2025 adjusted EBITDA to be $116-$126 million, suggesting an increase of 11-21% from the 2024 level.
PGY & TREE: Price Performance, Valuation & Other Comparisons
This year, shares of Pagaya have performed extremely well given the bullish investor sentiments. The stock has soared 130.3%, while TREE has lost 4.6% so far this year. Hence, in terms of investor sentiments, PGY has the edge.
Image Source: Zacks Investment Research
From a valuation perspective, Pagaya is currently trading at a 12-month trailing price-to-book (P/B) of 3.66X, while the TREE stock is trading at a 12-month trailing P/B of 4.66X.
Image Source: Zacks Investment Research
So, PGY is inexpensive compared to LendingTree.
Pagaya’s return on equity (ROE) of 9.28% is below LendingTree’s 14.76%. This reflects that TREE is more efficiently using shareholder funds to generate profits.
Image Source: Zacks Investment Research
Pagaya & LendingTree’s Prospects
The Zacks Consensus Estimate for PGY’s 2025 and 2026 revenues implies year-over-year growth of 19.9% and 15.7%, respectively. The company expects total revenues and other income to be between $1.175 billion and $1.3 billion. Last year, the metric was $1.032 billion.
The consensus estimate for PGY earnings indicates a 195.2% and 28% jump for 2025 and 2026, respectively. Also, management projects net income (GAAP) to be in the range of $10-$45 million for 2025.
Image Source: Zacks Investment Research
On the contrary, the Zacks Consensus Estimate for TREE’s 2025 and 2026 revenues implies year-over-year growth of just 9.2% and 6.4%, respectively. For 2025, the company projects total revenues to be between $955 million and $995 million. In 2024, total revenues were $900.2 million.
Also, the consensus estimate for LendingTree’s earnings indicates 43.9% growth for 2025, while for 2026, earnings are expected to decline 3.5%.
Image Source: Zacks Investment Research
PGY or TREE: Which Stock Deserves a Spot in Your Portfolio?
Pagaya is scaling rapidly with its flexible, capital-light model, AI-powered lending solutions and a strong network of funding partners. Its significantly stronger revenue and earnings growth outlook compared with LendingTree enhances its appeal as a high-upside investment opportunity.
While TREE boasts a well-established marketplace model and superior ROE, its revenue and earnings growth are decelerating. Given PGY’s compelling growth trajectory and its more attractive valuation, it appears better positioned for long-term gains, despite TREE’s relative operational maturity and stability.
PGY currently sports a Zacks Rank #1(Strong Buy), whereas LendingTree carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.