We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
PGY vs. TREE: Which Fintech Lender Has a Clearer Path to Profits?
Read MoreHide Full Article
Key Takeaways
Pagaya posted two straight quarters of GAAP profit and raised the 2025 revenue guidance.
LendingTree's Q2 adjusted EBITDA rose 35% and it lifted the 2025 revenue outlook.
The PGY stock has skyrocketed 344.6% YTD, outpacing TREE's 88.8% surge, while trading at a lower P/B ratio.
Pagaya Technologies Ltd. (PGY - Free Report) and LendingTree, Inc. (TREE - Free Report) are two financial technology firms operating in the lending space. While Pagaya’s primary focus is leveraging artificial intelligence (AI) and machine learning to optimize credit underwriting and diversify funding sources, LendingTree operates a more traditional online lending marketplace to monetize borrower-lender connections.
How does PGY’s AI-powered growth momentum compete with TREE’s proven marketplace supremacy? Let us dive deep and closely compare the fundamentals of the two stocks to determine which is a better investment now.
The Case for Pagaya
With an adaptable business model and capital-efficient structure, PGY, which initially focused on personal loans, has expanded into auto lending and point-of-sale financing over time. This helped the company reduce exposure to any single loan type and improve 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 in which investors commit to buying future loans. These agreements offer funding stability, especially during market disruptions.
After a challenging period in the last couple of years, Pagaya has hit an inflection point in 2025 with improving fundamentals and profitability. The company recorded its second consecutive quarter of positive GAAP net income in the three months ended June 2025. Given the solid results, PGY revised its revenue guidance higher. It expects 2025 total revenues and other income between $1.25 billion and $1.325 billion, up from the previously mentioned $1.175-$1.3 billion.
A key differentiator for Pagaya is its 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 risks, 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.
The Case for LendingTree
TREE is a key player in the growing digital lending space. It is an online marketplace that connects consumers with financial service providers for mortgages, loans, credit cards and insurance. The company’s operating strategy has been evolving, with a notable shift in focus toward boosting the top line by diversifying into non-mortgage products, particularly in the consumer segment.
Over the years, TREE 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 has been 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. Over the past three years, the company’s non-mortgage revenue streams have witnessed a compound annual growth rate of 3.3%.
In second-quarter 2025, LendingTree’s adjusted EBITDA increased 35% year over year, fueled by strong revenue growth across all three business segments. For 2025, adjusted EBITDA is projected to be $119-$126 million, up from the prior stated $116-$124 million. Total revenues are expected between $1 billion and $1.05 billion, up from the previously mentioned $955-$995 million.
PGY & TREE: Price Performance, Valuation & Other Comparisons
So far this year, shares of Pagaya have skyrocketed 344.6%, whereas the TREE stock has surged 88.8%. 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 6.72X, which is below TREE’s current trailing 12-month P/B of 8.44X.
Image Source: Zacks Investment Research
Thus, currently, the PGY stock is inexpensive compared with LendingTree.
Pagaya’s return on equity (ROE) of 31.69% is below LendingTree’s 52.33%. This reflects that TREE is more efficiently using shareholder funds to generate profits compared with PGY.
Image Source: Zacks Investment Research
Pagaya & LendingTree’s Earnings & Sales Prospects
The Zacks Consensus Estimate for PGY’s 2025 and 2026 revenues is pegged at $1.31 billion and $1.53 billion, respectively. The estimates imply year-over-year growth rates of 28.4% and 16.3%.
The consensus estimates for PGY’s earnings for 2025 and 2026 indicate year-over-year growth of 219.3% and 29.3%, respectively.
Image Source: Zacks Investment Research
On the contrary, the Zacks Consensus Estimate for TREE’s 2025 and 2026 revenues is pegged at $1.03 billion and $1.10 billion, implying year-over-year growth rates of 14.9% and 6.8%, respectively.
Also, the consensus estimates for LendingTree’s earnings indicate 37% year-over-year growth for 2025 and 7.5% year-over-year growth for 2026.
Image Source: Zacks Investment Research
PGY or TREE: Which is a Better Investment Option Now?
PGY is now a profitable fintech leader with fast-growing revenues, an impressive year-to-date performance, a resilient business model, a capital-efficient funding strategy and strong institutional support. Its AI-driven platform, diversified revenue streams and reliance on forward flow agreements shield it from market volatility and credit risks.
On the other hand, TREE boasts a well-established marketplace model and an ROE that is superior to PGY. Its focus on non-mortgage product offerings will continue to support revenue growth. Also, its cost-control efforts are expected to aid profitability.
While LendingTree has relative operational maturity and stability, PGY has a significantly stronger revenue and earnings growth outlook, along with a better valuation.
Image: Bigstock
PGY vs. TREE: Which Fintech Lender Has a Clearer Path to Profits?
Key Takeaways
Pagaya Technologies Ltd. (PGY - Free Report) and LendingTree, Inc. (TREE - Free Report) are two financial technology firms operating in the lending space. While Pagaya’s primary focus is leveraging artificial intelligence (AI) and machine learning to optimize credit underwriting and diversify funding sources, LendingTree operates a more traditional online lending marketplace to monetize borrower-lender connections.
How does PGY’s AI-powered growth momentum compete with TREE’s proven marketplace supremacy? Let us dive deep and closely compare the fundamentals of the two stocks to determine which is a better investment now.
The Case for Pagaya
With an adaptable business model and capital-efficient structure, PGY, which initially focused on personal loans, has expanded into auto lending and point-of-sale financing over time. This helped the company reduce exposure to any single loan type and improve 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 in which investors commit to buying future loans. These agreements offer funding stability, especially during market disruptions.
After a challenging period in the last couple of years, Pagaya has hit an inflection point in 2025 with improving fundamentals and profitability. The company recorded its second consecutive quarter of positive GAAP net income in the three months ended June 2025. Given the solid results, PGY revised its revenue guidance higher. It expects 2025 total revenues and other income between $1.25 billion and $1.325 billion, up from the previously mentioned $1.175-$1.3 billion.
A key differentiator for Pagaya is its 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 risks, 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.
The Case for LendingTree
TREE is a key player in the growing digital lending space. It is an online marketplace that connects consumers with financial service providers for mortgages, loans, credit cards and insurance. The company’s operating strategy has been evolving, with a notable shift in focus toward boosting the top line by diversifying into non-mortgage products, particularly in the consumer segment.
Over the years, TREE 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 has been 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. Over the past three years, the company’s non-mortgage revenue streams have witnessed a compound annual growth rate of 3.3%.
In second-quarter 2025, LendingTree’s adjusted EBITDA increased 35% year over year, fueled by strong revenue growth across all three business segments. For 2025, adjusted EBITDA is projected to be $119-$126 million, up from the prior stated $116-$124 million. Total revenues are expected between $1 billion and $1.05 billion, up from the previously mentioned $955-$995 million.
PGY & TREE: Price Performance, Valuation & Other Comparisons
So far this year, shares of Pagaya have skyrocketed 344.6%, whereas the TREE stock has surged 88.8%. 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 6.72X, which is below TREE’s current trailing 12-month P/B of 8.44X.
Image Source: Zacks Investment Research
Thus, currently, the PGY stock is inexpensive compared with LendingTree.
Pagaya’s return on equity (ROE) of 31.69% is below LendingTree’s 52.33%. This reflects that TREE is more efficiently using shareholder funds to generate profits compared with PGY.
Image Source: Zacks Investment Research
Pagaya & LendingTree’s Earnings & Sales Prospects
The Zacks Consensus Estimate for PGY’s 2025 and 2026 revenues is pegged at $1.31 billion and $1.53 billion, respectively. The estimates imply year-over-year growth rates of 28.4% and 16.3%.
The consensus estimates for PGY’s earnings for 2025 and 2026 indicate year-over-year growth of 219.3% and 29.3%, respectively.
Image Source: Zacks Investment Research
On the contrary, the Zacks Consensus Estimate for TREE’s 2025 and 2026 revenues is pegged at $1.03 billion and $1.10 billion, implying year-over-year growth rates of 14.9% and 6.8%, respectively.
Also, the consensus estimates for LendingTree’s earnings indicate 37% year-over-year growth for 2025 and 7.5% year-over-year growth for 2026.
Image Source: Zacks Investment Research
PGY or TREE: Which is a Better Investment Option Now?
PGY is now a profitable fintech leader with fast-growing revenues, an impressive year-to-date performance, a resilient business model, a capital-efficient funding strategy and strong institutional support. Its AI-driven platform, diversified revenue streams and reliance on forward flow agreements shield it from market volatility and credit risks.
On the other hand, TREE boasts a well-established marketplace model and an ROE that is superior to PGY. Its focus on non-mortgage product offerings will continue to support revenue growth. Also, its cost-control efforts are expected to aid profitability.
While LendingTree has relative operational maturity and stability, PGY has a significantly stronger revenue and earnings growth outlook, along with a better valuation.
Currently, PGY carries a Zacks Rank #2 (Buy) and LendingTree sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.