Is PGY a good stock to buy? We came across a bullish thesis on Pagaya Technologies Ltd. on Stay Invested’s Substack by Denis Gorbunov. In this article, we will summarize the bulls’ thesis on PGY. Pagaya Technologies Ltd.’s share was trading at $15.64 as of June 1st. PGY’s trailing and forward P/E were 13.96 and 5.27 respectively according to Yahoo Finance.
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Pagaya Technologies (PGY) is a financial technology company operating a second-look AI lending platform that enhances bank underwriting decisions and has developed a large-scale data moat across consumer credit markets. Its algorithm evaluates borrower profiles across multiple variables including cash flow, repayment behavior, credit scores, and alternative data, but its key advantage stems from processing more than $3.5 trillion in loan applications, creating a compounding data advantage that strengthens underwriting accuracy over time.
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The business model is capital-light because Pagaya does not hold most of the loans it recommends, instead facilitating origination for partner banks and monetizing through securitization and servicing fees. It is required to retain up to 5% of originated loans for risk alignment, meaning credit deterioration can impact earnings, which has been reflected in recent stock volatility following a sharp 75% decline from its peak.
However, recent performance suggests improving fundamentals, with revenue growing around 20% year over year and four consecutive quarters of GAAP profitability demonstrating increased operating stability. Credit impairments peaked at $229 million in 2024 but declined to roughly $120 million in 2025, with 2026 guidance of $100–150 million indicating improving underwriting quality and tighter risk selection from its AI models.
The company is also reducing exposure to higher-risk single-family rental assets, while its core personal loan, auto, and point-of-sale verticals continue to expand, with network volumes up 34% year over year excluding that segment. Strong investor demand is evident through $1.4 billion funding and $1.65 billion securitizations, signaling improving sentiment and upside potential.
Previously, we covered a bullish thesis on Pagaya Technologies Ltd. (PGY) by Unconventional Value in February 2025, which highlighted AI-driven lending expansion, network effects, and underserved credit markets. PGY’s stock price has appreciated by approximately 38.28% since our coverage. Denis Gorbunov shares a similar view but emphasizes improving fundamentals, declining impairments, and stronger capital efficiency and improving outlook visibility.
Pagaya Technologies Ltd. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held PGY at the end of the first quarter which was 41 in the previous quarter. While we acknowledge the risk and potential of PGY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PGY and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
