Analyst Cuts Pagaya Target But Stays Bullish Amid Strong Growth Metrics
Financial services firm Keefe Bruyette took a slightly more cautious stance on Pagaya Technologies Ltd. (NASDAQ: PGY) this week, lowering its price target from $38 to $35. The move was part of a broader review of price targets across the consumer finance and payments sector. However, the firm reaffirmed its Outperform rating on the stock, signaling continued confidence in the company's long-term trajectory.
The revised target arrives as Pagaya demonstrates substantial operational momentum. For the third quarter of 2025, the company reported a 19% year-over-year increase in network volume, reaching $2.8 billion. Total revenue surged 36% to $350 million, driven by a 31% jump in personal loan volume. The company also noted significant expansion in its auto and point-of-sale financing segments, which have achieved annualized run-rates of $2.2 billion and $1.4 billion, respectively.
"The underlying growth story here remains intact," said a market analyst familiar with the sector. "A target adjustment in line with a sector-wide review is less concerning than a downgrade based on company-specific issues. Pagaya's B2B2C model appears to be gaining serious traction."
Indeed, Pagaya emphasized it has the highest number of new partners in its onboarding queue in company history. This pipeline includes up to eight new institutional partners across its core asset classes, some described as "mega billion-dollar" relationships. Management raised its full-year guidance, now expecting network volume between $10.5 billion and $10.75 billion and total revenue up to $1.325 billion. The company stated its current cash position is sufficient to fund operations well into 2028.
Pagaya, which operates in the U.S., Israel, and the Cayman Islands, uses proprietary AI and data science to facilitate lending decisions for financial institutions and asset investors.
Market Voices: A Split Reaction
Michael R., Portfolio Manager: "This is a classic case of not seeing the forest for the trees. The minor target cut is noise. The signal is the sustained high growth rate and the exploding partner pipeline. The raised guidance speaks volumes."
Sarah Chen, Fintech Analyst: "The model is proving its scalability. Moving into auto and POS lending diversifies their revenue and reduces dependency on any single credit product. The financial runway through 2028 provides a massive cushion to execute."
David K., Independent Investor: "Are we just ignoring the elephant in the room? This is a company in a highly cyclical, rate-sensitive business wrapped in an 'AI' label. A price target cut is a cut. The macro environment for consumer credit is tightening, and no amount of tech jargon changes that fundamental risk."
Lisa Gonzalez, Banking Sector Specialist: "Keefe Bruyette's maintained Outperform rating is the key takeaway. It suggests they view this as a valuation recalibration, not a deterioration in business quality. The Q3 metrics objectively show a company executing on its expansion plans."