PGY vs. OMF: Which Stock Wins the Consumer Credit Battle?

By Nikita Kataruka | January 30, 2026, 1:25 PM

Two key players in the consumer finance space that target the underserved credit segments, such as subprime and non-prime borrowers, are Pagaya Technologies Ltd. PGY and OneMain Holdings, Inc. OMF. However, both have different operating models and revenue streams.

Pagaya represents the next generation of consumer finance, built on an artificial-intelligence (AI)-powered, capital-light platform that partners with banks and lenders rather than holding large loan books itself. In contrast, OneMain is a traditional non-prime lender with a well-established nationwide footprint, originating and servicing unsecured and secured installment loans directly to consumers through physical branches and digital channels.

Though more exposed to macroeconomic cycles and subprime credit risk than Pagaya’s model, OneMain places a strong emphasis on shareholder returns via dividends and buybacks, and benefits from a long record of navigating credit cycles successfully.

Let us see if Pagaya’s AI-powered growth momentum can subdue OMF’s proven marketplace supremacy. While both face headwinds from shifting consumer spending patterns and market uncertainties, let us decipher which stock is better placed for long-term growth.

The Case for Pagaya

PGY has a capital-light, flexible operating model, which initially centered on personal lending, but the company has since broadened its reach into auto loans and point-of-sale financing. This expansion has spread risk across multiple asset classes, reducing dependence on any single loan segment and supporting performance through varying economic conditions. On the funding side, PGY has cultivated relationships with more than 135 institutional investors and relies on forward-flow agreements, under which partners commit capital for future loan purchases. These arrangements enhance funding predictability and provide a buffer against market volatility.

A key differentiator is PGY’s proprietary tech and product suite. Its pre-screen solution allows lenders to present pre-approved offers to existing customers without formal applications, helping partners boost credit access and deepen relationships with minimal marketing spend.

Pagaya operates with minimal on-balance-sheet exposure. Loans are typically acquired immediately by asset-backed securities (ABS) vehicles or via forward flow agreements, thanks to capital raised in advance. This approach limits credit and market risk, preserving flexibility during turbulent environments. By relying on forward flow agreements and strategic ABS issuance, Pagaya has maintained liquidity and minimized loan write-downs.

In 2025, Pagaya hit an inflection point with improving fundamentals and profitability. Despite macroeconomic headwinds and regulatory risks, the company posted three consecutive quarters of positive GAAP net income, a dramatic turnaround from substantial losses in the previous years. In the nine months ended Sept. 30, 2025, PGY’s net income was $47.1 million against a net loss of $163.5 million in the prior-year period. The company’s robust results were driven by strong network volume growth, improved monetization, better operating leverage and solid credit discipline, supported by an improvement in capital structure.

Moreover, driven by both portfolio seasoning and structural changes in funding and underwriting, PGY’s credit-related losses and impairments improved drastically from the 2024 reported levels. In the nine months ended Sept. 30, 2025, credit-related impairment losses on investments in loans and securities declined by more than $95 million on a year-over-year basis. Lower impairments reflect better-performing loan vintages, more stable delinquency and charge-off trends, and improved accuracy of PGY’s AI-driven underwriting models.

The Case for OneMain

OMF provides unsecured and secured personal installment loans, often used for debt consolidation, home improvements, medical expenses and other large personal needs, while operating through 1,300 locations across 47 states. It also offers optional credit and non-credit insurance products, such as life, disability and involuntary unemployment insurance.

Revenue growth has been a major strength for OneMain. The company’s revenues witnessed a five-year (2019-2024) compound annual growth rate (CAGR) of 3.6%, with momentum continuing in the first nine months of 2025. Its loan mix of Front Book and Back Book aims for revenue sustainability while maintaining an upside potential in a rapidly changing macroeconomic environment. OMF frequently securitizes portions of its loan book via OneMain Financial Issuance Trust to reduce funding costs and manage balance sheet exposure. Its 2024 acquisition of Foursight Capital LLC expanded its presence into the auto lending business.

As a subprime lender, OMF is more exposed to credit risk and macroeconomic cycles. However, the company employs rigorous underwriting and servicing, supported by centralized data analytics, and has a strong record of managing credit performance, even during downturns.

OMF focuses on sustainable shareholder returns through dividends and buybacks. Since initiating dividends in 2019, it has raised them eight times, with the latest increase of 1% announced in October 2025. The board of directors approved a $1-billion share repurchase program, which will remain in effect until Dec. 31, 2028 (replacing the prior authorization, which had $556.4 million remaining as of Sept. 30, 2025).

Thus, OMF’s efforts to grow credit cards and auto finance businesses, along with lower rates and a diversified product base, are expected to support top-line expansion.

PGY & OMF: Price Performance, Valuation & Other Comparisons

In the past year, shares of Pagaya have performed exceptionally well, given bullish investor sentiments. The stock has skyrocketed 117.1%, whereas OMF has gained 19%. Hence, in terms of investor sentiments, PGY has the edge.