We got here throughout a bullish thesis on Pagaya Applied sciences on MVC Investing’s Substack by M. V. Cunha. As of 14ᵗʰ July, Pagaya Applied sciences’s share was buying and selling at $23.69. PGY’s ahead P/E was 47.38 in line with Yahoo Finance.
A businessman holding a test approving a mortgage whereas standing in entrance of a financial institution’s foyer.
Pagaya Applied sciences operates a B2B2C fintech platform leveraging AI to underwrite client credit score at scale. The corporate’s core enterprise revolves round utilizing proprietary AI fashions to evaluate credit score functions, allow seamless mortgage origination by way of banking companions, and monetize the method by way of payment revenue tied to each underwriting and capital markets actions. Pagaya’s mannequin is asset-light, fee-driven, and data-centric, positioning it as a ‘technology-first enabler’ within the lending ecosystem.
The corporate has constructed a differentiated, scalable, and capital-efficient mannequin to serve the subsequent era of client credit score. By combining AI decision-making with capital markets execution, Pagaya monetizes the complete underwriting to funding lifecycle whereas avoiding the credit score danger burden of a conventional lender. Pagaya’s enterprise mannequin is changing into each extra worthwhile and extra resilient because it matures, with a shift towards extra capital-efficient buildings and a better reliance on embedded partnerships with banks and fintechs.
Pagaya’s Q1 2025 outcomes signify a decisive inflection level, with the corporate rising as a self-funded, extremely environment friendly working mannequin with robust earnings momentum. The corporate’s monetary efficiency, together with a file $290M in income and $80M in adjusted EBITDA, underscores a strong narrative of monetizing mortgage quantity extra effectively, with FRLPC margins hitting all-time highs, working leverage increasing, and GAAP profitability arriving forward of schedule.
Beforehand, we coated a bullish thesis on Pagaya Applied sciences by Unconventional Worth on February 12, 2025, which highlighted the corporate’s potential to remodel the U.S. client credit score markets utilizing AI. The inventory has appreciated by 109.46% since our protection, because the thesis performed out with the corporate originating over $26 billion in loans and capturing about 70% of the non-public mortgage ABS market. M. V. Cunha shares an analogous view, emphasizing Pagaya’s scalable and capital-efficient mannequin, which has led to a file $290M in income and $80M in adjusted EBITDA in Q1 2025.
Pagaya Applied sciences isn’t on our record of the 30 Most In style Shares Amongst Hedge Funds. As per our database, 21 hedge fund portfolios held PGY on the finish of first quarter which was 24 within the earlier quarter. Whereas we acknowledge the danger and potential of PGY as an funding, we consider sure AI shares supply better upside potential and carry much less draw back danger. In the event you’re searching for a particularly undervalued AI inventory that additionally stands to learn considerably from Trump-era tariffs and the onshoring development, see our free report on the finest short-term AI inventory.
