PGY Stock Forecast & Price Target

Pagaya Technologies Ltd achieved a notable improvement in its conversion rate of applications to underwritten loans, reaching 23.9% in 2Q25, a significant increase from 15.2% in the same period of the previous year, which management attributes to enhancements in its AI-driven credit decisioning technology. The company reported a year-over-year revenue growth of 30% for 2Q25, signaling a robust performance in its primary market, the United States, while management has indicated that this growth strategy prioritizes credit performance over aggressive expansion. This deliberate approach to growth, alongside the advancements in their proprietary technology, positions Pagaya positively within the financial technology space, contributing to an optimistic outlook for its stock.

Pagaya Technologies Ltd.'s stock has experienced a sell-off due to negative sentiment stemming from deteriorating credit performance indicators highlighted in a sell-side report regarding Upstart, which identified rising delinquencies in its asset-backed securities. This issue is viewed as indicative of a broader macro trend affecting the credit landscape rather than being isolated to Upstart alone, which raises concerns about the overall health of the lending marketplace. Furthermore, the company's strategy of approving a higher number of borrowers amidst these credit headwinds adds to the cautious outlook on its financial stability and future performance.