Pagaya stock rallies as AI-backed fintech data company raises profitability outlook

The company reported a second-quarter loss of $31.3 million, or 4 cents a share, compared with a loss of $175.3 million, or 71 cents a share, in the year-ago period. Adjusting for stock-based compensation expenses and other items, Pagaya reported earnings of $886,000, or breakeven a share, compared with a loss of $18.6 million, or 7 cents a share, in the year-ago period.

The company also reported adjusted earnings before interest, taxes, depreciation and amortization of $17.5 million, while analysts surveyed by FactSet had forecast $5.6 million.

Total revenue rose 7.8% to $195.6 million from $181.5 million in the year-ago quarter, while revenue from fees rose 13.7% to $185.6 million from $163.3 million.

Analysts had forecast a loss of 3 cents a share, an adjusted bottom line of breakeven a share, and revenue of $188.9 million.

Pagaya forecast adjusted EBITDA of $10 million to $20 million on total revenue of $190 million to $200 million for the third quarter, and adjusted EBITDA of $40 million to $50 million for the year on revenue of $775 million to $825 million for the year.

Analysts had estimated adjusted EBITDA of $5.2 million on revenue of $207 million for the third quarter, and adjusted EBITDA of $16.7 million on revenue of $805.9 million for the year.

Of the six analysts who cover the stock, three have buy-grade ratings and three have hold ratings, with an average target price of $2.93.

On Tuesday, Benchmark analyst Michael Legg, who has a buy rating on Pagaya, hiked his price target on the stock to $6 from $2 ahead of the company’s earnings report, on the basis that that the company was building a leverageable platform that has a significant total addressable market.

“As the stock has rebounded off its low, we believe investors are re-rating the stock and believe the shares deserve a market multiple as the long-term opportunity becomes increasing apparent,” Legg wrote on Tuesday.