PGY's Network Volume Grows So Far in 2025: Will the Trend Continue?

Pagaya Technologies Ltd. PGY has recorded robust growth in network volume (which is the main driver of its top line) so far in 2025. In the nine months ended Sept. 30, 2025, year-over-year network volume growth was 10.5%.

With a resilient and adaptable business model, PGY has been actively expanding beyond its original focus on personal loans, moving into auto lending and point-of-sale financing for a long time now. This expansion across lending verticals has been the primary driver for network volume growth.

Moreover, despite certain macroeconomic headwinds and regulatory risks, Pagaya’s improving credit trends and funding diversification (more forward flow deals and ABS issuance, which give it flexibility and reduce dependence on any single funding source), have been supporting growth in network volume.

Increase in network volume drove network AI fees, which increased 26.7% year over year in the first nine months of this year, thereby driving growth in revenues from fees. Higher revenues from fees and a rise in interest income primarily supported PGY’s total revenues and other income, which increased 28.4% year over year in the nine months ended Sept. 30, 2025.

Supported by continued improvement in AI credit models, expansion of lending verticals, underwriting consistency, better monetization, along with a scalable ABS platform, Pagaya is expected to sustain its network volume growth in the near term. For full-year 2025, the company expects network volume of $10.5-$10.75 billion.

Comparing PGY’s Business Model With Peers

Like PGY, Upstart Holdings, Inc. UPST is an AI-based lending platform that aspires to become capital-light but often holds loans on its balance sheet temporarily. Its core business model involves finding financing for loans after its network of bank and institutional partners originates them.

Upstart partner banks can finance the loan by keeping it on their balance sheet. The bank can sell the whole loan on Upstart’s platform or use forward flow agreements from institutions that commit to buying a specific volume or type of loan originated on the Upstart platform in the future.

Upstart also uses securitization, wherein pools of loans are bundled together and sold as ABS to institutional investors. However, the firm frequently reverts to a balance-sheet-heavy model, especially in tight liquidity markets, making it more volatile and exposed to macro cycles.

Another close competitor of PGY is LendingTree TREE. But unlike PGY, LendingTree is a marketplace platform, not a lender. It matches consumers with financial product providers like mortgages, personal loans, credit cards and insurance.

LendingTree does not underwrite, originate or hold loans. Hence, its balance sheet is not credit-heavy. TREE’s balance sheet is detached from revenue generation. The company is primarily structured to support a fee-based digital marketplace, not balance sheet lending.

PGY’s Price Performance, Valuation & Estimate Analysis

Investors have been bullish on PGY stock, which has skyrocketed 132.8% so far this year against the industry’s 10.1% decline.

Pagaya stock is currently trading at a 12-month forward price-to-sales (P/S) of 1.13X, which is below the industry average of 2.92X over the last three years.

Over the past 60 days, the Zacks Consensus Estimate for PGY’s 2025 and 2026 earnings has moved higher to $3.10 and $3.41, respectively. The consensus estimate indicates 273.5% and 10% year-over-year growth for 2025 and 2026, respectively.

Currently, Pagaya carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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