Pagaya Technologies (PGY): A Bull Case Theory

We came across a bullish thesis on Pagaya Technologies on MVC Investing’s Substack by M. V. Cunha. As of 14ᵗʰ July, Pagaya Technologies’s share was trading at $23.69. PGY’s forward P/E was 47.38 according to Yahoo Finance.

Pagaya Technologies operates a B2B2C fintech platform leveraging AI to underwrite consumer credit at scale. The company’s core business revolves around using proprietary AI models to assess credit applications, enable seamless loan origination through banking partners, and monetize the process via fee income tied to both underwriting and capital markets activities. Pagaya’s model is asset-light, fee-driven, and data-centric, positioning it as a ‘technology-first enabler’ in the lending ecosystem.

The company has built a differentiated, scalable, and capital-efficient model to serve the next generation of consumer credit. By combining AI decision-making with capital markets execution, Pagaya monetizes the full underwriting to funding lifecycle while avoiding the credit risk burden of a traditional lender. Pagaya’s business model is becoming both more profitable and more resilient as it matures, with a shift toward more capital-efficient structures and a greater reliance on embedded partnerships with banks and fintechs.

Pagaya’s Q1 2025 results represent a decisive inflection point, with the company emerging as a self-funded, highly efficient operating model with strong earnings momentum. The company’s financial performance, including a record $290M in revenue and $80M in adjusted EBITDA, underscores a powerful narrative of monetizing loan volume more efficiently, with FRLPC margins hitting all-time highs, operating leverage expanding, and GAAP profitability arriving ahead of schedule.

Previously, we covered a bullish thesis on Pagaya Technologies by Unconventional Value on February 12, 2025, which highlighted the company’s potential to transform the U.S. consumer credit markets using AI. The stock has appreciated by 109.46% since our coverage, as the thesis played out with the company originating over $26 billion in loans and capturing about 70% of the personal loan ABS market. M. V. Cunha shares a similar view, emphasizing Pagaya’s scalable and capital-efficient model, which has led to a record $290M in revenue and $80M in adjusted EBITDA in Q1 2025.

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Disclosure: None.