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Benchmark analyst Mark Palmer assumed coverage of Pagaya Technologies (NASDAQ:PGY) with a Buy rating and $21 price target, as he sees an attractive entry point for investors after the AI-lending platform stock’s recent pullback.
Pagaya (PGY) stock climbed 1.0% in Monday premarket trading.
“Some investors zeroed in on a single negative data point in PGY’s report – the ~$58m in losses it incurred during the quarter due to the marking of older-vintage loans to fair value – and appear to have overlooked the company’s significant progress on multiple fronts, as well as the fact that it is now positioned to begin self-funding its growth and achieve GAAP net income profitability in 2025, in our view,” Palmer wrote in a note to clients.
He pointed out that Pagaya (PGY), which operates an AI-powered credit-decisioning engine, posted better-than-expected revenue and adjusted EBITDA as management boosted full-year 2024 guidance in both metrics.
“Meanwhile, the company during the quarter added impactful new partners on both the loan origination and funding sides of its network, received its first-ever AAA rating in its personal loan ABS program, and achieve an important milestone by achieving positive incremental cash flow on network volume,” the analyst added.
Palmer’s Buy rating on the stock clashed with the SA Quant rating of Sell and aligns with the average Wall Street rating of Buy.
