Barchart.com contributor fingers small AI company with 79% upside

The stock of fintech company Pagaya Technologies is trading with 79% upside versus its last closing price, notes Barchart.com contributor Ruchi Gupta, citing analysts’ consensus forecasts. Pagaya has developed an AI platform that helps banks, retailers, and payment systems to make lending  decisions.

Details

The average target price for Pagaya Technologies stock is $27 per share, implying 79% upside.  It has a “moderate buy” consensus rating, based on eight analysts covering the company.

Benchmark analyst Mark Palmer recently initiated coverage of Pagaya, recommending buying the stock with a target price of $21 per share, recalls Gupta. Palmer highlighted the company’s “significant progress on multiple fronts” and sees it as poised to start self-funding its growth and achieve GAAP net income profitability by 2025.

Pagaya reported a record top line of $250 million in the second quarter of 2024. This marked 28% year-over-year growth and beat the company’s $235-245 million guidance for the period. The only negative aspect of the second-quarter financials, Palmer believes, was the net loss of approximately $75 million, up from $21 million in the previous quarter.

About Pagaya

Pagaya Technologies is an Israeli fintech company listed on the New York Stock Exchange with a market capitalization of $1.08 billion. It develops AI technology to assist companies to originate loans and other assets. For instance, banks use Pagaya-provided information to make better lending decisions compared to legacy underwriting systems, which often miss deserving applicants, the company says. 

Besides banks, Pagaya’s clients include other fast-growing fintech companies, auto loan providers, and real estate service providers. Among them are MasterCard and OneMain Financial, which issues loans and credit cards, the company notes.

Pagaya stock is off 9% so far this year and about 42% over the last 12 months. As of the close on Friday, August 30 (the Barchart.com article came out the next day), the price was $15.06 per share. According to MarketWatch, seven analysts cover the company, with six “buys” and one “hold.” The average target price is $28.60 per share, for upside of nearly 90%.