PGY Expects Double-Digit Top-Line Growth in 2025: What's Driving It?

Pagaya Technologies Ltd. PGY, a leading fintech innovator, raised its 2025 revenue outlook after a strong Q1 performance (revenues and other income jumped 18%). The company now expects total revenues and other income between $1.175 billion and $1.3 billion, up from its earlier $1.15–$1.275 billion estimation. This compares with $1.032 billion reported in 2024. 

The Zacks Consensus Estimate for 2025 and 2026 revenues of $1.23 billion and $1.42 billion implies growth of 19.9% and 15.7%, respectively.

PGY Sales Estimates
 

Further, the company anticipates second-quarter total revenues and other income to be in the range of $290-$310 million. The company’s growth strategy focuses on expanding products to boost partner customer value, enhancing monetization of existing partnerships and adding new enterprise lending partners, especially large U.S. banks and auto captives.

Pagaya’s core strength lies in its resilient and adaptable business model. The company is expanding beyond its original focus on personal loans, moving into auto lending and point-of-sale (POS) financing. This reduces exposure to cyclical risk in any single loan category, making the business more stable across economic cycles.

Additionally, Pagaya is diversifying its funding sources. It has built a robust network of more than 135 institutional funding partners to support the sale of its asset-backed securities (ABS). The company utilizes forward flow agreements to secure a predictable and stable capital source, helping mitigate liquidity risks, especially during periods of rising inflation and interest rates.

PGY’s competitive edge lies in its proprietary data and product suite, including its Pre-screen solution. This tool allows lenders to offer pre-approved loans to existing customers without formal applications, helping deepen relationships and expand credit access with minimal marketing cost.

Financial Outlook of Pagaya’s Competitors

Unlike PGY, LendingTree TREE lowered its 2025 total revenue outlook. The company now expects the metric to be between $955 million and $995 million compared with the prior target of $0.985-$1.03 billion. Further, the company projects adjusted EBITDA to be $116-$124 million.

Additionally, for the second quarter, LendingTree anticipates total revenues in the range of $241-$248 million and adjusted EBITDA between $29 million and $31 million.

LendingClub LC has guided for the second quarter of 2025. The company expects pre-provision net revenues to be in the $70-$80 million range. Additionally, LendingClub projects loan originations between $2.1 billion and $2.3 billion for the quarter.

Pagaya’s Price Performance, Valuation and Estimate Analysis

Investors are bullish on PGY stock, which has surged 102.9% this year. The company has fared better than its close competitors, LendingTree and LendingClub. So far this year, shares of LendingTree have declined 10.7%, while LendingClub has tumbled 30.7%.

YTD Price Performance
 

Pagaya stock is currently trading at a 12-month trailing price-to-book (P/B) of 3.23X, which is below the industry’s 3.47X. This shows the stock is trading at a discount.

Price-to-Book
 

Over the past two months, the Zacks Consensus Estimate for earnings for 2025 and 2026 has moved higher to $2.45 and $3.13, respectively. The consensus estimate for earnings indicates 195.2% and 28% growth for 2025 and 2026, respectively. 

PGY Earnings Estimates
 

Management projects net income (GAAP) to be in the range of $10-$45 million for 2025.

PGY currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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

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