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Pagaya Technologies Ltd.

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Pagaya Technologies Ltd. $PGY - LongToday we have on the radar Pagaya Technologies Ltd. NASDAQ:PGY Pagaya Technologies Ltd. is a global financial technology company, headquartered in Tel Aviv, Israel, with operations spanning Israel, the United States, and international markets. Since its establishment in 2016, the company has been at the forefront of development and implementation of exclusive artificial intelligence technology and its corresponding software solutions. These advanced tools play a vital role in supporting partners, such as rapidly growing financial technology firms, traditional banks, financial institutions, auto finance providers, and providers of real estate services, in the initiation of loans and various assets. Artificial Intelligence is gearing up to be the next big disruptor, reaching far beyond image generators and chatGPT. We're likely at the initial phases of the AI wave, merely dipping our toes into what's on the horizon. This of course presenting an intriguing investment opportunity to explore potential growth stocks in this rapidly advancing industry. Nevertheless, we're not strictly adhering to a long term value-driven perspective, as we're not on ValueView. Instead, we're blending fundamentals, metrics, and technicals. Then formulate a short-term trading concept, that I personally will execute and would like to share here on TradingView, solely for recreational purposes. Although Pagaya has fallen short of earnings expectations for a while, there's a notable steadiness in revenue growth. The company is anticipated to break even around the last quarter of '24 and Q1 '25, with yearly earnings growth projected at +90%. Additionally, important metrics hint at the possibility that this stock could be set for a reasonable future discount, paving the way for potential price appreciation. Price currently trading at: Price/Sales 1.47 Price/Book 2.16 The stock isn't exactly on a super sale, but it's not breaking the bank either, especially when you think about its growth potential. So perhaps we could explore some technicals to identify promising entry points from here. But before we jump into the technicals, I'd like to point out some other positive aspects worth noting. So, the company has a total of 598.3 million outstanding shares, with 315.76 million available for public trading. Taking a glance at the short positions: Short % of Float: 1.03% Short % of Shares Outstanding: 0.49% These percentages suggest that a relatively small portion of the total available shares (both in terms of publicly traded shares and total outstanding shares) are currently being shorted. In other words, the data indicates that there isn't a significant amount of short interest in this stock. So, that's a positive. And another positive note. Insiders currently hold approximately 26% of the shares, with the CEO owning 8.1% of the shares. This significant insider ownership is a positive indicator for various reasons: - Getting everyone on the same page: When folks on the inside, like executives and employees, own a good chunk of the company, it means they're in sync with other shareholders. This usually means they're all about making choices that set the company up for long-term success. - Believing in the company's game: When insiders own a piece of the pie, it's like giving a thumbs-up to the company's future performance. Their willingness to throw in their own money signals that they see some solid potential for growth and profitability ahead. - In it for the long haul: When insiders have a hefty stake, they're likely thinking about the long-term. Their focus is on ensuring the company grows steadily and achieves success in the grand scheme of things, rather than chasing short-term gains - Building trust and stability: Having a lot of insiders in the ownership mix can create a feeling of stability and trust for investors. It hints that the big decision-makers are fully invested in the company's success and less likely to do anything that might hurt the value for shareholders. Taking a closer look at the metrics I mentioned, let's now shift our focus to the technicals and chart. From a Year-to-Date perspective, it's been quite in a range. Had a solid surge followed by a classic M-shaped descent. But here's the intriguing part: pay attention to the volume profile around the $1.20 range. It's a hotspot, no doubt. Initially, it dipped below that zone a few times, but post the major rally, it's been consistently bouncing off it. On top of that, it keeps forming these fresh higher lows. Now, adding to the mix the fact that short interest is on the low side, it's pointing towards a potential bottom, suggesting a potential upward trend is in the making. And let's not overlook the increase in regular volume - looks like the market is showing more interest in this stock. Now, here's another interesting nugget: in this range, a solid resistance level has formed around $1.57, and that's exactly where we find ourselves at the moment. The big question: will it make a break for it from here? Well, that's the suspense we're in for in the days and weeks to come. If it does, that could be a solid signal to go long. Oh, and here's a behind-the-scenes tidbit not seen on my chart but worth noting: the price managed to break the 200MA on the upside, adding another layer to the green light. Taking a glance purely from the recent peak to the current price action, there's a noteworthy observation: the price descended within this broadening channel. After a failed breakout in December '23, it took a sharp downturn. However, it not only rebounded off the bottom of that high volume zone but also bounced off the upper boundary of the downward broadening channel. The failed breakout created a new band within the broadening channel, from which it recently broke out again, accompanied by some decent volume. Now, it's testing the resistance at $1.57. If it clears that hurdle, things could get interesting from a trader's standpoint. It might suggest the formation of a W cycle, and a conservative target could be around $2.40 from here, with potential extended targets at $3 and $4. Now, is there any risk in the mix? Well, yeah, a bit. Some metrics aren't all that positive, but they might carry less weight when viewed from a trader's perspective. You can sketch all the lines, throw in indicators, and scrutinize metrics, but if the market has a different take, well, you might find yourself in a bit of a pickle. So, there's certainly a chance that the price could struggle to break resistance again, with the market still on the fence, possibly leading to a sell-off, maybe into another range or a falling wedge until the next earnings call. Also, keep an eye out for some noteworthy news this week that could sway the broader stock scene - we've got PMI's, JOLT job openings, and Non-Farm Payrolls on the docket. And Mr. J. Powell is set to testify before Congress this week. Toss in the geopolitical situation with Israel and Hamas, and you've got a few factors to mull over. But hey, war aside, let's just focus on the price setup and the upcoming data. It's gonna be a bit of a show to see if this current correction can make a snazzy bounce off that high volume zone. Ideally, we're talking about a higher high, maybe even a cheeky retest of that resistance zone. And if the breakout vibes aren't there, let's keep an eye on whether the price can chill in this wedge range until the next earnings call and maybe pull off a breakout from there. To summarize. Artificial Intelligence (AI) is positioned as a significant disruptor, presenting an attractive investment opportunity. Pagaya, despite missing earnings expectations, shows stability in revenue growth. Key metrics suggest potential value, but risks include market sentiment, geopolitical issues, and upcoming economic data. Please note that this analysis is for informational and recreational purposes only and should not be considered financial advice.
NASDAQ:PGYLong
by GoldvalleyCap
3
PGY maintains the overall trendPGY on the daily although heavily corrected does remain on trend. RSI is contracting and you know how I feel about that (big move coming). Volume is on an overall uptrend as well. PGY is very undervalued fundamentally in my opinion. I think the war has effected this Israeli stock pretty heavily. This offers a buying opportunity in my opinion. If you look at the last two major bounces from this line, the stock went absolutely parabolic, I think this happens again. I think 2$ by end of year at this point with mag 7s reaching all-time-highs etc.
NASDAQ:PGYLong
by Apollo_21mil
$PGY vs $UPST Are They Really Similar?Ever since its public market debut in 2022, investors have been constantly comparing Pagaya Technologies Ltd. (NASDAQ: PGY) and Upstart Holdings, Inc. (NASDAQ: UPST) since they are both AI-driven fintechs. However, there is no merit to this comparison due to both fintechs’ drastically different business models. Upstart works directly with consumers to provide them access to unsecured loans, while Pagaya works with banks to improve their lending capacities. With interest rates not expected to fall anytime soon, Pagaya’s business model appears to be more immune to macroeconomic headwinds than that of Upstart which is why investors could make gains by going long on PGY stock and short on UPST stock. PGY & UPST Fundamentals Business Model The core of this article is Pagaya’s and Upstart’s business models. While both companies are AI-driven fintechs, they operate in very different ways. Pagaya’s business model is a B2B2C model where its clients use its AI platform to go through their initially declined loan applications to find good loans among them. Then, Pagaya bundles these loans and sells them to institutional investors in the form of ABS or to private investors. This is a win-win-win situation for all parties involved. First, borrowers get the loans they need. Lenders add new customers, while taking no credit risk, as well as getting the majority of the upfront fees. Finally, ABS investors have their risk spread out across different sectors and different lenders while receiving a better return on the ABS since they pre-fund the loans Pagaya’s AI includes in the ABS. As such, Pagaya realizes revenue from 3 fees which are AI integration fees charged to its partners, execution fees which are loan markups before they are put into ABS structures in addition to other fees for packaging the ABS, as well as contract fees which are charged to the private capital Pagaya manages to purchase loans. In comparison, Upstart deals directly with consumers by acting as an intermediary between borrowers and lending partners. However, since these loans are considered as “second look”, Upstart’s partners don’t retain all of these loans on their balance sheet. Instead, Upstart bundles these loans and sells them as ABS, but still retains some of them on its balance sheet as according to its latest Q3 earnings report, it held loans worth nearly $1 billion. While this is similar to what Pagaya does to an extent, there is a major difference in how both companies operate. Pagaya’s ABS are pre-funded, meaning that in case its partners don’t want to hold these loans it wouldn’t be left holding them on its balance sheet. This isn’t the same with Upstart since if its partners don’t want to hold the originated loans it is left holding them before bundling them and selling them as ABS. This is risky for a company with a weak balance sheet like Upstart as in case there’s a low demand for its loans, it would be burdened with the credit risk of these loans, unlike Pagaya which carries almost zero balance sheet risk. Who Has The Better AI? When it comes to each company’s AI, the results paint a good picture of who has the better capabilities. Pagaya is currently the number one personal loan ABS issuer by issuance size in the US as it raised more than $18 billion in ABS transactions since 2018 and $12 billion since 2012. In fact, its last four ABS issuances were oversubscribed by an average of 2 times, meaning that demand for its ABS was more than the available units. Furthermore, it added 6 new investors to its network since August, 2 of which have more than $400 billion in assets under management. This is a great indicator of the quality of Pagaya’s AI decisions as investors are rushing to pre-fund the loans processed through its platform without knowing the nature of the loans that will be included in the ABS. Meanwhile, demand for Upstart’s ABS appears to be softening. In the 9 months ended September 30, the fintech reported that 53% of its loans were sold as ABS to institutional investors. This figure pales in comparison to 65% over the same period last year. Although Upstart bulls may attribute this to the worsening macroeconomic conditions, why are institutions still showing confidence in Pagaya’s ABS, knowing that they are pre-funded? Another factor to consider is each fintech’s partners. Upstart’s largest partner is New Jersey-based regional bank Cross River Bank. Meanwhile, Pagaya just onboarded a top 5 US bank in terms of assets into its network along with a top 4 OEM captive finance company by US vehicle sales. The fintech is also in discussions with 80% of the top 25 US banks and has more than 10 opportunities across banks and auto captives that are in the later stages of business case development and onboarding. The next factor in determining which AI is better is delinquencies. In the nine months ended September 30, Upstart’s charge-offs increased a staggering 53% YoY from $70.8 million to $108.1 million. At the same time, the fintech’s management shared in the Q3 earnings call that half of its auto loan book is taking on excess defaults and expects this to persist in Q4 as well. However, Pagaya was quick to react to the macro headwinds by developing newer AI models that improve pricing by focusing on reducing delinquency rates which translates to higher returns for every incremental unit of underwritten risk. For instance, the company introduced an updated credit model in Q3 in its personal loan product that could lead to up to a .5% increase in annualized asset return. Therefore, it is no wonder that Pagaya was able to attract the top 5 bank and the top 4 OEM captive finance company to its platform in Q3. As such, it becomes clear that Pagaya takes the lead in terms of its AI capabilities. Navigating Through Macro Headwinds Based on both fintechs’ business models and AI capabilities, it is safe to assume that Pagaya is built to thrive in the current macro environment, while Upstart would only be able to rebound if macro conditions improve. In fact, looking at each company’s latest earnings call is enough to see the difference between both of them. “Our ability to approve borrowers in this environment has remained the constraint on platform growth for most of the past quarter. On the funding side of our business, banks continue to manage balance sheets conservatively and seek to unwind existing asset positions in secondary markets. Our underwriting of primer higher income borrowers has become more conservative over this past quarter, as their loss rates accelerate and converge with the broader default trends across the borrower spectrum. This has been a headwind for our volumes and fee revenues over this past quarter versus our contemplated guidance.” UPST’s management in the Q3 earnings call. “Our business is also benefiting from two structural macro tailwinds. First, banks are tightening their lending standards, pulling back on new originations as they face tight liquidity conditions, and increasing regulation. Additionally, private credit is increasingly stepping in the excess capital to deploying traditional banking assets. Given Pagaya’s position in the ecosystem, we can offer an attractive solution to both lending institutions and asset managers. If these trends continue, all else being equal, we expect they will be supportive to our growth in the near term.” PGY’s management in the Q3 earnings call. The reason behind both tones is due to their vastly different business models unlike what many investors think. Since Upstart directly deals with borrowers, it has to maintain a marketing presence so that more borrowers would use its platform to receive their loans. Meanwhile, Pagaya doesn’t have to rely on marketing spend to increase its exposure. In fact, its marketing costs declined 56% YoY in the 9 months ended September 30th from $90.2 million to $40.1 million. Instead, Pagaya relies on its partners’ customer acquisition costs since if more borrowers apply for loans at its partners, more loans would be processed through its platform. So for Upstart to grow, it has to increase its marketing spend, while Pagaya wouldn’t have to do so. But even if Upstart ramps up its marketing efforts, its volume would still pale compared to Pagaya. In Q3, Upstart had an application volume of nearly $13 billion, and with a conversion rate of 9.5%, its transaction volume was $1.2 billion. On the other hand, Pagaya evaluated applications worth more than $182 billion in Q3, and its network volume was $2.1 billion at a very low conversion rate of less than 1%. The difference in volume is simply incomparable. If Pagaya’s conversion rate increases once the macro conditions improve, its network volume could grow substantially which is why it might be better positioned to capitalize on any macro improvements in 2024. Risks It goes without saying that there are risks for any investment. The risk facing the bearish thesis on UPST stock is that since it is heavily impacted by macro conditions, its outlook may improve if the Fed starts cutting interest rates earlier than expected. Analysts expect this to happen in the second half of 2024, but if the upcoming CPI print shows that inflation is approaching the Fed’s 2% target, it could be a sign that rate cuts may be sooner than expected. As for the bullish thesis on Pagaya, the main risk would be competition. Currently, there’s no platform similar to Pagaya. However, if large banks invest more funds into developing AI software, it could limit its revenue growth potential as it mainly depends on attracting major banks that process a huge number of transactions. Technical Analysis PGY stock is in a bearish trend as it is trading in a downward channel. Looking at the indicators, the stock is below the 200, 50, and 21 MAs which is a bearish sign. Meanwhile, the RSI is neutral at 40 and the MACD recently turned bullish. As for the fundamentals, PGY is benefiting from the current macro conditions as banks are tightening their lending requirements, meaning that more applications are processed through the company’s platform. With that in mind, the company will also benefit greatly from improved macro conditions as its conversion rate could increase from the current low levels of below 1% which would translate to more revenues. As such, bullish investors could find the range between $1 and $1.2 a good level to build a long position. PGY & UPST Forecast In summary, there is a misconception among investors that Pagaya and Upstart are competitors. As is, Upstart is mainly dependent on macro conditions as shown by its financial performance during this credit cycle. Meanwhile, Pagaya’s business model is more immune to macro conditions since it depends on its partners processing loans through its platform. Although both companies’ moat is their respective AI models, Pagaya’s is showing signs indicating that it is better performance-wise given the strong demand for its ABS compared to Upstart which shows that investors are more confident in Pagaya’s loans. Although improving macro conditions will benefit both companies, Pagaya has the potential to benefit more than Upstart due to its business model, which is why investors may find it profitable to go long on PGY stock and short on UPST stock.
NASDAQ:PGY
by Penny_Stocks_Today
1
PGY, watch out. Swing traders! price target reduced by JMP Securities from $2.75 to $2.25 in a report issued on Monday morning, Benzinga reports. JMP Securities currently has a market outperform rating on the stock. Other equities research analysts also recently issued research reports about the stock. Benchmark restated an overweight rating and issued a $6.00 price objective on shares of Pagaya Technologies in a research note on Friday, September 8th. Canaccord Genuity Group raised their price objective on shares of Pagaya Technologies from $3.00 to $3.50 and gave the stock a buy rating in a research note on Monday, August 14th. B. Riley started coverage on shares of Pagaya Technologies in a research note on Wednesday, July 26th. They issued a buy rating and a $4.00 price objective on the stock. Finally, Wedbush raised their price objective on shares of Pagaya Technologies from $1.50 to $3.00 and gave the stock a neutral rating in a research note on Friday, August 11th. Two research analysts have rated the stock with a hold rating and four have issued a buy rating to the company. According to MarketBeat, the company has an average rating of Moderate Buy and an average price target of $3.35.
NASDAQ:PGY
by Ahmed_official
Is PGY quietly building a financial empirePagaya's machine provides a robust fintech infrastructure: AI platform deployed to partners > Resulting in higher loan approval rate for partners > Pagaya then offers partners to buy loans off their balance sheet (eliminating risk for partners) > NASDAQ:PGY cherry-picks high-quality loans using its AI ability to filter high-quality borrowers > NASDAQ:PGY bundles loans into AA-rated ABS structures and sells them to investors through its investment funds > Earns fees for ABS sold - 3-4% margin target Providing a win-win-win situation for every part of the machine. With the current network volume of 2B$~ Pagaya has generated 378M$ in fee revenues year to date, minus production costs (FRLPC - revenue fees less production cost) translated to 123M$ year to date. Management has indicated their projection to become profitable already this year. Is NASDAQ:PGY building an empire under the radar as we speak?
NASDAQ:PGYLong
by fintechdude
PGY - Could there be more to this rocket?Friday was one heck of a day for PGY delivering upon a 100%+ move. Stocks that move like this in one day is always worth watching the next so this will absolutely be on my radar for Monday morning. The candles going into close and AH still keeps me interested especially as it still trades over VWAP & the 9EMA. I was looking for this to keep pushing to the $15 zone with all of the volume and momentum but it was not successful. With that said, I am looking for it to retest either a bounce off of VWAP or a bounce off of support if it breaks through VWAP. If it goes below the support then my trade plan will have to reset. Otherwise I am looking to capitalize on some gains on Monday. The consolidation above VWAP is reassuring for a opportunity to trade this one. (Not Financial Advice)
NASDAQ:PGY
by azheng2649
4