Pagaya Technologies Ltd. (PGY) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0001883085

P/B 3.60

P/E -8.14

P/S 1.27

Market Cap 1.58 Bn

ROIC (Qtr) 55.96

Div Yield % 0.00

Rev 1y % (Qtr) 36.13

Total Debt (Qtr) 802.42 Mn

Debt/Equity (Qtr) 1.83

About

Pagaya Technologies Ltd., commonly referred to as PGY, is a technology company that operates in the financial services industry. The company was incorporated in 2016 and is headquartered in New York City, with an additional office in Tel Aviv, Israel. Pagaya's main business activities involve using artificial intelligence-powered technology and data science to improve upon legacy underwriting practices in the United States. The company has built a network connecting financial institutions, their customers, and investors, which facilitates greater...

Pagaya Technologies Ltd., commonly referred to as PGY, is a technology company that operates in the financial services industry. The company was incorporated in 2016 and is headquartered in New York City, with an additional office in Tel Aviv, Israel. Pagaya's main business activities involve using artificial intelligence-powered technology and data science to improve upon legacy underwriting practices in the United States. The company has built a network connecting financial institutions, their customers, and investors, which facilitates greater access to financial products and services for consumers. Pagaya's business has expanded to include personal loans, auto loans, point-of-sale, and single-family rental (SFR) products.

Pagaya generates revenue through its various products and services, including personal loans, auto loans, point-of-sale, and SFR. The company's primary customers are financial institutions, investors, and consumers.

The personal loans segment is a key part of Pagaya's business. The company uses its AI-powered technology to underwrite personal loans, providing financial institutions with a more efficient and effective way to offer loans to their customers. Pagaya's personal loans segment is a significant source of revenue for the company. The company's personal loans segment offers a range of products, including credit cards, personal loans, and lines of credit, under the brand names of its partner financial institutions.

Pagaya's auto loans segment is another important part of its business. The company uses its AI-powered technology to underwrite auto loans, providing financial institutions with a more efficient and effective way to offer loans to their customers. Pagaya's auto loans segment is a significant source of revenue for the company. The company's auto loans segment offers a range of products, including new and used car loans, under the brand names of its partner financial institutions.

Pagaya's point-of-sale segment is a key part of its business. The company uses its AI-powered technology to provide point-of-sale financing solutions to merchants and consumers. Pagaya's point-of-sale segment is a significant source of revenue for the company. The company's point-of-sale segment offers a range of products, including credit card processing, payment processing, and point-of-sale financing, under the brand names of its partner financial institutions.

Pagaya's SFR segment is a key part of its business. The company uses its AI-powered technology to underwrite SFR loans, providing financial institutions with a more efficient and effective way to offer loans to their customers. Pagaya's SFR segment is a significant source of revenue for the company. The company's SFR segment offers a range of products, including single-family rental property loans, under the brand names of its partner financial institutions.

Pagaya is a leader in the fintech industry, with a strong competitive position in the markets it operates in. The company's AI-powered technology and data science capabilities provide it with a unique competitive advantage, allowing it to offer more efficient and effective financial products and services to its customers. Pagaya's key competitors in the fintech industry include companies such as LendingClub, Prosper, and Upstart.

Pagaya's customers are financial institutions, investors, and consumers. The company works with a range of financial institutions, including banks, credit unions, and other financial institutions, to offer its financial products and services. Pagaya also works with investors to provide them with access to its financial products and services.

Stock Price Chart

Analysis

Pros

Robust free cash flow of 176.09M exceeds capital expenditure of 14.79M by 11.90x, indicating strong organic growth funding capability.
Operating cash flow of 190.89M provides strong 7.35x coverage of tax liabilities 25.98M, showing excellent fiscal position.
Cash reserves of 264.77M provide comfortable 10.19x coverage of tax obligations 25.98M, showing strong fiscal management.
Robust R&D investment of 74.74M at 0.31x of SG&A 238.03M demonstrates strong commitment to innovation and future growth.
Operating cash flow of 190.89M provides strong 12.90x coverage of capital expenditure 14.79M, enabling organic growth.

Cons

Operating cash flow of 190.89M barely covers its investment activities of (245.50M), with a coverage ratio of -0.78, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of (245.50M) provide weak support for R&D spending of 74.74M, which is -3.28x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Cash reserves of 264.77M provide limited coverage of acquisition spending of (8.94M), which is -29.63x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
The company's operating cash flow of 190.89M shows concerning coverage of stock compensation expenses of 60.63M, with a 3.15 ratio indicating potential earnings quality issues.
Operating earnings of (187.02M) show weak coverage of depreciation charges of 31.23M, with a -5.99 ratio indicating high capital intensity and potential reinvestment needs.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	1.47	2.56
EV to Cash from Ops.	11.18	38.32
EV to Debt	2.66	-11.37
EV to EBIT	-11.41	-12.79
EV to EBITDA	8.63	7.72
EV to Free Cash Flow [EV/FCF]	12.11	24.22
EV to Market Cap	1.35	0.58
EV to Revenue	1.71	-35.00
Price to Book Value [P/B]	3.60	3.74
Price to Earnings [P/E]	-8.14	-18.61

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	-70.02	-0.30
Dividend Payout Ratio %	0.00	2.69
Dividend per Basic Share	0.00	0.10
FCF Dividend Payout Ratio %	0.00	1.67
Interest Coverage	0.00	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	19.59	-404.11
Cash and Equivalents Growth (1y) %	60.74	226.02
Dividend Growth (1y) %	0.00	-0.27
EBIAT Growth (1y) %	-7.27	31.15
EBITDA Growth (1y) %	242.24	49.02
EBIT Growth (1y) %	-13.44	25.85
EBT Growth (1y) %	-13.44	17.82
EPS Growth (1y) %	-8.30	70.69
FCF Growth (1y) %	761.05	295.45
Gross Profit Growth (1y) %	33.16	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.86	0.68
Cash Payout Ratio	0.00	0.02
Cash Ratio	0.00	1.21
Current Ratio	0.00	2.57
Debt to Equity Ratio	1.83	-0.93
Interest Cover Ratio	0.00	-13.15
Times Interest Earned	0.00	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	-12.50	-544.82
EBIT Margin %	-15.01	-197.78
EBT Margin %	-15.01	-602.74
Gross Margin %	42.40	52.06
Net Profit Margin %	-15.50	-605.52

Pagaya Technologies Ltd. (NASDAQ: PGY)