PGY Stock Forecast & Price Target

Pagaya Technologies Ltd demonstrates a positive financial outlook, highlighted by a sequential network volume growth of 8.3% to $2.8 billion, alongside a stable conversion rate of approximately 1%, indicating effective optimization for investor returns. The company reported a substantial 72% increase in EBITDA, reflecting strong unit economics with a FRLPC margin of 4.8%, up 60 basis points year-over-year, while total revenue and adjusted revenue both grew by 30% with operating costs increasing only 10%. Additionally, the company's improved conversion rate for applications to underwritten loans rose significantly to 23.9% in Q2 2025, up from 15.2% in the previous year, showcasing the effectiveness of its AI-driven credit decisioning enhancements.

Pagaya Technologies Ltd faces a negative outlook due to higher-than-expected losses on recent loan vintages, which have led to material writedowns on risk retention assets and could negatively impact future revenue, income, and cash flow. Additionally, the company's reliance on AI technology for credit performance presents risks, particularly in the current economic environment, where deteriorating credit conditions could result in significant funding pullbacks. Finally, the potential inability to retain existing partners or attract new ones raises concerns about the sustainability of Pagaya's growth and overall profitability.