Pagaya Technologies Ltd. (PGY): A Bull Case Theory 

We came across a bullish thesis on Pagaya Technologies Ltd. on MVC Investing’s Substack by M. V. Cunha. In this article, we will summarize the bulls’ thesis on PGY. Pagaya Technologies Ltd.’s share was trading at $21.07 as of January 28th. PGY’s forward P/E was 6.80 according to Yahoo Finance.

Pagaya Technologies Ltd., a product-focused technology company, deploys data science and proprietary artificial intelligence-powered technology for financial services and other service providers, their customers, and asset investors in the United States and internationally. PGY delivered a stellar Q3, reinforcing the investment thesis despite a 40% pullback from recent highs driven by factors unrelated to fundamentals.

The company posted record revenue of $350M (+36% YoY), adjusted EBITDA of $107M (+91% YoY, 30.6% margin), and GAAP net income of $23M, which would have been ~$33M adjusting for one-offs. Network volume reached $2.8B (+19% YoY) with continued diversification across POS and auto, now representing 32% of total volumes. FRLPC grew 39% YoY, with margins reaching 5%, while core operating expenses fell to 34% of FRLPC, highlighting operational leverage and efficiency gains. The company also reduced impairment losses and reiterated FY2025 guidance across revenue, EBITDA, and net income, reflecting confidence in sustained growth.

Operationally, Pagaya expanded its partner base with two new lending partners and now maintains 31 active partners, with the largest onboarding pipeline in history. Multi-product adoption is accelerating, with nearly half of network volume driven by newer offerings like Affiliate Optimizer and Prescreen, demonstrating strong cross-selling and compounding growth within partner ecosystems. Five partners now exceed $1B in cumulative network volume, with long-term agreements enhancing predictability and durability. Credit performance remained stable across all asset classes, with disciplined underwriting supporting consistent GAAP profitability.

The balance sheet strengthened through $500M in corporate debt issuance, a $400M RPM Auto ABS deal, and a $500M Auto Forward Flow agreement, boosting liquidity and lowering funding costs by ~400bps. Management highlighted the B2B2C model’s resilience, diversified funding mix, and selective expansion into new asset classes, with home improvement financing as a potential candidate. PGY’s superior execution, scale, and cycle-resilient model position it for continued profitable growth, while trading at just 6x 2025 EBITDA versus peers at 16x, offering a compelling risk/reward opportunity.

Previously, we covered a bullish thesis on Pagaya Technologies Ltd. (PGY) by Unconventional Value in February 2025, which highlighted the company’s AI-driven lending model, expansion into underserved credit markets, and network effects with banks and investors. PGY’s stock price has appreciated by approximately 86.29% since our coverage due to strong adoption of its technology and growing market recognition. M. V. Cunha shares a similar thesis but emphasizes recent record financial results, operational execution, and multi-product adoption driving sustainable growth.

Pagaya Technologies Ltd. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held PGY at the end of the third quarter which was 32 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.

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Disclosure: None.