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.
A lean balance sheet and reliance on forward flow agreements support Pagaya amid market stress.
Shares of Pagaya Technologies (PGY - Free Report) have gained 56.8% over the past six months, outperforming the S&P 500 Index’s growth of 14.8%. Also, it has performed better than the broader industry, which declined 6.7% in six months’ time.
PGY’s robust performance has been driven by strong network volume growth, improved monetization, better operating leverage and solid credit discipline, supported by an improvement in capital structure. Moreover, PGY was able to move into profitability this year as it avoided overexposure to credit risk.
Pagaya has also fared better than its close competitors, LendingTree (TREE - Free Report) and Upstart Holdings (UPST - Free Report) . Shares of LendingTree have gained 39.2%, while Upstart has lost 15.1% in the same time frame.
Price Performance
Image Source: Zacks Investment Research
Does PGY stock have more upside left despite recent strength in share price? Let us find out.
What’s Supporting Pagaya’s Performance?
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 risks 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 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.
What’s Hurting PGY’s Growth?
Elevated Expenses: Pagaya has been witnessing a persistent increase in expenses over the past few years. Over the last three years (2021-2024), total costs and operating expenses increased at a compound annual growth rate of 26.2%. The uptrend continued in the first nine months of 2025. The rise has mainly been because of elevated production costs.
Since production costs are highly correlated to the company’s network volume, the metric is anticipated to keep increasing in the near term as the value of the company’s assets originated by its partners with the assistance of AI and with respect to single-family rental operations grow. Thus, rising expenses will hurt PGY’s bottom-line growth to an extent.
Expense Trend
Image Source: Zacks Investment Research
How to Approach PGY Stock Now?
While rising expenses will likely hurt Pagaya’s bottom-line growth to an extent in the near term, the company’s resilient business model and capital-efficient funding strategy make it stand 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.
Analysts seem to have a neutral stance toward the stock. Over the past 30 days, the Zacks Consensus Estimate for Pagaya’s 2025 and 2026 earnings has been unchanged at $2.65 and $3.40, respectively.
Earnings Estimate Revision Trend
Image Source: Zacks Investment Research
For investors seeking exposure to a high-growth, tech-enabled lender with solid fundamentals, PGY stock appears to be an attractive investment option now.
Image: Shutterstock
Pagaya Shares Gain 56.8% in 6 Months: How to Play the Stock?
Key Takeaways
Shares of Pagaya Technologies (PGY - Free Report) have gained 56.8% over the past six months, outperforming the S&P 500 Index’s growth of 14.8%. Also, it has performed better than the broader industry, which declined 6.7% in six months’ time.
PGY’s robust performance has been driven by strong network volume growth, improved monetization, better operating leverage and solid credit discipline, supported by an improvement in capital structure. Moreover, PGY was able to move into profitability this year as it avoided overexposure to credit risk.
Pagaya has also fared better than its close competitors, LendingTree (TREE - Free Report) and Upstart Holdings (UPST - Free Report) . Shares of LendingTree have gained 39.2%, while Upstart has lost 15.1% in the same time frame.
Price Performance
Image Source: Zacks Investment Research
Does PGY stock have more upside left despite recent strength in share price? Let us find out.
What’s Supporting Pagaya’s Performance?
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 risks 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 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.
What’s Hurting PGY’s Growth?
Elevated Expenses: Pagaya has been witnessing a persistent increase in expenses over the past few years. Over the last three years (2021-2024), total costs and operating expenses increased at a compound annual growth rate of 26.2%. The uptrend continued in the first nine months of 2025. The rise has mainly been because of elevated production costs.
Since production costs are highly correlated to the company’s network volume, the metric is anticipated to keep increasing in the near term as the value of the company’s assets originated by its partners with the assistance of AI and with respect to single-family rental operations grow. Thus, rising expenses will hurt PGY’s bottom-line growth to an extent.
Expense Trend
Image Source: Zacks Investment Research
How to Approach PGY Stock Now?
While rising expenses will likely hurt Pagaya’s bottom-line growth to an extent in the near term, the company’s resilient business model and capital-efficient funding strategy make it stand 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.
Analysts seem to have a neutral stance toward the stock. Over the past 30 days, the Zacks Consensus Estimate for Pagaya’s 2025 and 2026 earnings has been unchanged at $2.65 and $3.40, respectively.
Earnings Estimate Revision Trend
Image Source: Zacks Investment Research
For investors seeking exposure to a high-growth, tech-enabled lender with solid fundamentals, PGY stock appears to be an attractive investment option now.
At present, Pagaya carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.