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.
Pagaya Skyrockets 225.3% YTD: Should You Still Buy the Stock?
Read MoreHide Full Article
Key Takeaways
Pagaya shares have soared 225.3% YTD, outpacing rivals LendingTree and Upstart.
PGY's profitability stems from strong network volume, credit discipline and capital efficiency.
Analysts raised PGY's 2025-2026 earnings and revenue estimates, signaling continued growth.
Pagaya Technologies Ltd. (PGY - Free Report) has performed remarkably well this year. So far in 2025, the stock has skyrocketed 225.3%. Its performance has also been better than its close competitors, LendingTree (TREE - Free Report) and Upstart Holdings (UPST - Free Report) . Shares of LendingTree have gained 53.8%, while Upstart has lost 15.9% in the same time frame.
YTD Price Performance
Image Source: Zacks Investment Research
This year, PGY, one of the most compelling fintech companies in today’s market, recorded two consecutive quarters of positive GAAP net income, representing a dramatic turnaround from the substantial losses experienced in the previous years.
The company’s robust results were driven by strong network volume growth, improved monetization, better operating leverage and solid credit discipline, supported by an improvement in capital structure. PGY was able to move into profitability as it avoided overexposure to credit risk and controlled expenses efficiently.
Given Pagaya’s solid performance, investors must be tempted to buy the stock. But, before making any investment decision, it is better to examine PGY’s fundamentals and growth prospects to understand whether the stock has any upside potential left.
Key Factors Supporting Pagaya
Diversified & Resilient Business Model: PGY’s core strength lies in its resilient and adaptable business model. The company has continuously been expanding beyond its original focus on personal loans, moving into auto lending and point-of-sale financing. This diversification reduces exposure to cyclical risk in any single loan category, making the business more stable across economic cycles.
Parallel to this, Pagaya has built a robust network of more than 135 institutional funding partners to support the sale of its asset-backed securities (ABS). The company leverages forward flow agreements — structured financing arrangements in which institutional investors commit to purchasing future loan originations from Pagaya’s banking partners. These agreements offer a critical alternative funding source if ABS markets face disruptions during periods of market stress.
PGY has a competitive edge in its proprietary data and product suite. One standout offering is its pre-screen solution, which enables banks and lenders to present pre-approved loan offers to existing customers without requiring a formal application.
By analyzing the lender’s customer base and identifying qualified borrowers proactively, the company helps financial institutions deepen customer relationships and expand credit access with minimal incremental marketing spend. This marks an evolution in its value proposition from driving market share gains for partners to enhancing their share of wallet with existing customers.
Lean Balance Sheet: Pagaya operates a capital-efficient model that largely avoids holding loans on its balance sheet, significantly reducing its exposure to credit risk and market volatility. This is made possible through the company’s robust network of institutional funding partners and a focus on issuing ABS.
The capital raised in advance is held in trust and deployed only when a lending partner originates a loan through Pagaya’s artificial intelligence (AI)-driven network. At that point, the loan is immediately acquired by a pre-committed funding source, either through an ABS vehicle or a forward flow agreement. As a result, most loans never reside on Pagaya’s balance sheet or only do so briefly before being transferred.
This off-balance-sheet model has proven particularly effective during periods of elevated interest rates and market stress, such as from 2021 through 2023. By minimizing credit exposure and avoiding significant loan write-downs, Pagaya has maintained its financial flexibility in turbulent environments.
PGY appears to rely heavily on forward flow agreements. These contracts provide a reliable and predictable source of capital, helping the company maintain liquidity even amid tightening credit markets and rising inflation.
Analyst Sentiments Bullish for Pagaya
Analysts seem optimistic regarding PGY’s earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for Pagaya’s 2025 and 2026 earnings has been revised upward to $2.65 and $3.40 per share, respectively. The estimated numbers indicate year-over-year growth rates of 219.3% and 28.3% for 2025 and 2026, respectively.
PGY Earnings Estimates
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for the company’s 2025 and 2026 revenues is pegged at $1.31 billion and $1.53 billion, implying year-over-year growth of 28.4% and 16.3%, respectively.
PGY’s Sales Estimates
Image Source: Zacks Investment Research
Pagaya’s Valuation Analysis
In terms of valuation, the PGY stock looks inexpensive compared with the industry at large. The stock is trading at a forward 12-month price/sales (P/S) ratio of 1.57X, below the industry average of 3.91X.
Price-to-Sales F12M
Image Source: Zacks Investment Research
While Pagaya is trading at a discount compared with Upstart, the stock appears to be trading at a premium compared with TREE. LendingTree has a P/S (F12M) ratio of 0.74X, while Upstart has a P/S ratio of 4.09X.
How to Approach Pagaya Stock Now?
Given its impressive year-to-date performance, resilient business model and capital-efficient funding strategy, Pagaya stands out in the fintech space. Its AI-driven platform, diversified revenue streams and reliance on forward flow agreements shield it from market volatility and credit risks.
With accelerating earnings and revenue estimates, along with bullish analyst sentiments, PGY is well-positioned for continued growth. Moreover, the stock trades at a discount relative to the industry at large, making its valuation attractive. For investors seeking exposure to a high-growth, tech-enabled lender with solid fundamentals, the PGY stock remains a compelling buy.
Image: Bigstock
Pagaya Skyrockets 225.3% YTD: Should You Still Buy the Stock?
Key Takeaways
Pagaya Technologies Ltd. (PGY - Free Report) has performed remarkably well this year. So far in 2025, the stock has skyrocketed 225.3%. Its performance has also been better than its close competitors, LendingTree (TREE - Free Report) and Upstart Holdings (UPST - Free Report) . Shares of LendingTree have gained 53.8%, while Upstart has lost 15.9% in the same time frame.
YTD Price Performance
Image Source: Zacks Investment Research
This year, PGY, one of the most compelling fintech companies in today’s market, recorded two consecutive quarters of positive GAAP net income, representing a dramatic turnaround from the substantial losses experienced in the previous years.
The company’s robust results were driven by strong network volume growth, improved monetization, better operating leverage and solid credit discipline, supported by an improvement in capital structure. PGY was able to move into profitability as it avoided overexposure to credit risk and controlled expenses efficiently.
Given Pagaya’s solid performance, investors must be tempted to buy the stock. But, before making any investment decision, it is better to examine PGY’s fundamentals and growth prospects to understand whether the stock has any upside potential left.
Key Factors Supporting Pagaya
Diversified & Resilient Business Model: PGY’s core strength lies in its resilient and adaptable business model. The company has continuously been expanding beyond its original focus on personal loans, moving into auto lending and point-of-sale financing. This diversification reduces exposure to cyclical risk in any single loan category, making the business more stable across economic cycles.
Parallel to this, Pagaya has built a robust network of more than 135 institutional funding partners to support the sale of its asset-backed securities (ABS). The company leverages forward flow agreements — structured financing arrangements in which institutional investors commit to purchasing future loan originations from Pagaya’s banking partners. These agreements offer a critical alternative funding source if ABS markets face disruptions during periods of market stress.
PGY has a competitive edge in its proprietary data and product suite. One standout offering is its pre-screen solution, which enables banks and lenders to present pre-approved loan offers to existing customers without requiring a formal application.
By analyzing the lender’s customer base and identifying qualified borrowers proactively, the company helps financial institutions deepen customer relationships and expand credit access with minimal incremental marketing spend. This marks an evolution in its value proposition from driving market share gains for partners to enhancing their share of wallet with existing customers.
Lean Balance Sheet: Pagaya operates a capital-efficient model that largely avoids holding loans on its balance sheet, significantly reducing its exposure to credit risk and market volatility. This is made possible through the company’s robust network of institutional funding partners and a focus on issuing ABS.
The capital raised in advance is held in trust and deployed only when a lending partner originates a loan through Pagaya’s artificial intelligence (AI)-driven network. At that point, the loan is immediately acquired by a pre-committed funding source, either through an ABS vehicle or a forward flow agreement. As a result, most loans never reside on Pagaya’s balance sheet or only do so briefly before being transferred.
This off-balance-sheet model has proven particularly effective during periods of elevated interest rates and market stress, such as from 2021 through 2023. By minimizing credit exposure and avoiding significant loan write-downs, Pagaya has maintained its financial flexibility in turbulent environments.
PGY appears to rely heavily on forward flow agreements. These contracts provide a reliable and predictable source of capital, helping the company maintain liquidity even amid tightening credit markets and rising inflation.
Analyst Sentiments Bullish for Pagaya
Analysts seem optimistic regarding PGY’s earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for Pagaya’s 2025 and 2026 earnings has been revised upward to $2.65 and $3.40 per share, respectively. The estimated numbers indicate year-over-year growth rates of 219.3% and 28.3% for 2025 and 2026, respectively.
PGY Earnings Estimates
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for the company’s 2025 and 2026 revenues is pegged at $1.31 billion and $1.53 billion, implying year-over-year growth of 28.4% and 16.3%, respectively.
PGY’s Sales Estimates
Image Source: Zacks Investment Research
Pagaya’s Valuation Analysis
In terms of valuation, the PGY stock looks inexpensive compared with the industry at large. The stock is trading at a forward 12-month price/sales (P/S) ratio of 1.57X, below the industry average of 3.91X.
Price-to-Sales F12M
Image Source: Zacks Investment Research
While Pagaya is trading at a discount compared with Upstart, the stock appears to be trading at a premium compared with TREE. LendingTree has a P/S (F12M) ratio of 0.74X, while Upstart has a P/S ratio of 4.09X.
How to Approach Pagaya Stock Now?
Given its impressive year-to-date performance, resilient business model and capital-efficient funding strategy, Pagaya stands out in the fintech space. Its AI-driven platform, diversified revenue streams and reliance on forward flow agreements shield it from market volatility and credit risks.
With accelerating earnings and revenue estimates, along with bullish analyst sentiments, PGY is well-positioned for continued growth. Moreover, the stock trades at a discount relative to the industry at large, making its valuation attractive. For investors seeking exposure to a high-growth, tech-enabled lender with solid fundamentals, the PGY stock remains a compelling buy.
At present, Pagaya sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.