From Yahoo Finance: 2025-06-13 19:30:00

Artificial intelligence is transforming industries, with Pagaya Technologies leading the way in the lending sector. Leveraging AI, the company has nearly doubled its stock price year-to-date and achieved profitability ahead of expectations. With a fee-based revenue model and a network effect from over 31 lending partners, Pagaya is a standout in the fintech space.

Pagaya’s innovative approach utilizes data modeling and AI to enhance lending decisions for financial institutions. By securitizing lending assets and working with institutional investors, the company secured $6 billion through 17 asset-backed securitizations in 2024. Their first-quarter 2025 results showed positive net income, demonstrating strong growth in fee revenue.

Transitioning from a cash-burning startup to a profitable market leader, Pagaya’s AI-powered business model offers competitive advantages. Despite this, the company’s valuation remains attractive, trading at just 7.6x forward earnings. Analysts rate PGY a Strong Buy, with a 12-month price target of $19.65, indicating an 8% upside potential.

Wall Street analysts are bullish on Pagaya, citing operational progress and profitability as key drivers. With a Buy rating and price target of $25 from Benchmark Co., the company’s strategic partnerships and achievements in net income profitability are recognized. Analysts see Pagaya as a key player in the POS lending space with significant growth potential.

Risks for Pagaya include regulatory scrutiny on AI in lending, macroeconomic conditions, and a highly leveraged balance sheet. The stock’s high volatility, with a beta of 2.37, may not be suitable for risk-averse investors. Despite these risks, Pagaya’s shift to profitability and growth catalysts make it a compelling investment in the AI and financial services transformation landscape.



Read more at Yahoo Finance: AI-Powered Lending Lifts Pagaya Technologies Stock (PGY) to Multiyear Highs