Pagaya Technologies Ltd sees significant put option interest amid market decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 01 2024
0mins
Should l Buy PGY?
Source: Coinmarketcap
Pagaya Technologies Ltd's stock price has dropped by 8.51% as it crosses below the 5-day SMA, reflecting broader market weakness with the Nasdaq-100 down 1.96% and the S&P 500 down 1.20%.
The recent analysis of PGY's options contracts highlights the appeal of its $17.00 put option, which is currently bid at $4.30, offering a 10% discount to potential buyers. Additionally, the $25.00 call option shows a strong profit potential, indicating investor interest despite the stock's decline.
This situation presents a unique opportunity for income-focused investors, as the put option's yield potential and the call option's return expectations could attract attention in a challenging market environment.
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Analyst Views on PGY
Wall Street analysts forecast PGY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for PGY is 43.33 USD with a low forecast of 35.00 USD and a high forecast of 54.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Analyst Rating
6 Buy
0 Hold
0 Sell
Strong Buy
Current: 18.640
Low
35.00
Averages
43.33
High
54.00
Current: 18.640
Low
35.00
Averages
43.33
High
54.00
About PGY
Pagaya Technologies Ltd is an Israel-based company. It is primarily engaged in financial technology (FinTech) industry. The Company develops data science, machine learning and AI technology (Artificial Intelligence) analytics, enabling accurate, real-time customer credit assessments. Company's customers are lending companies that, by connecting to the AI Pagaya network, have the opportunity to discover and approve new customers that meet their credit criteria. Thanks to the Company's solutions, its customers gains a customer without undue risk. Pagaya Technologies Ltd delivers technology that provides loan assistance such as personal, car and credit card loans. The Company serves its clients all over the world.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Pagaya Technologies Expected to Report Strong Earnings
- Earnings Expectations: Wall Street anticipates Pagaya Technologies will report an earnings per share (EPS) of $0.34 on revenue of $349 million, indicating a strong growth trajectory in profitability.
- Outperformance Record: The company has exceeded earnings expectations in three out of the last four quarters, while revenue has surpassed estimates in all four quarters, demonstrating the effectiveness of its business model and robust market demand.
- Analyst Ratings: Freedom Capital initiated coverage on Pagaya with a price target of $30 and a ‘Buy’ rating, reflecting confidence in its AI-driven credit underwriting capabilities and unique two-sided ecosystem.
- Investor Sentiment: Retail sentiment on Stocktwits is trending bullish, with PGY stock being the third most popular ticker, indicating strong investor confidence in the company's future growth potential.
See More
Pagaya Technologies and Sound Point Strike $720M Loan Deal
- Loan Agreement Reached: Pagaya Technologies has struck a $720 million forward flow loan deal with Sound Point, which is expected to significantly enhance the company's liquidity, thereby supporting its expansion in the fintech sector.
- Mixed Earnings Report: Pagaya's Q4 earnings report showed mixed results, yet the company is poised for profitability growth in upcoming quarters, reflecting a potential reassessment of its market value.
- Investor Misunderstanding Addressed: The misunderstanding among investors regarding Pagaya has created a launchpad for repositioning, and with strategic adjustments, the company may attract more investor interest, driving a rebound in stock price.
- Future Outlook: Pagaya has initiated its outlook for FY26, indicating confidence in future growth, which is likely to draw more market participants and enhance its standing within the industry.
See More
Pagaya Technologies Q4 Earnings Beat Expectations
- Earnings Highlights: Pagaya's Q4 Non-GAAP EPS of $0.80 exceeded expectations by $0.03, indicating robust profitability, although revenue of $335 million, up 19.9% year-over-year, fell short of market expectations by $14.51 million.
- Adjusted EBITDA Growth: The company reported an adjusted EBITDA of $98 million, a 53% increase year-over-year, reflecting significant improvement in profitability driven by growth in FRLPC and enhanced operating leverage, despite missing the guidance range of $99 million to $109 million.
- Network Volume Performance: Pagaya's network volume reached $2.7 billion, a 3% year-over-year increase, with a 34% growth when excluding SFR, demonstrating continued market expansion, although it did not meet the expected range of $2.65 billion to $2.9 billion.
- Future Outlook: The company anticipates network volume for FY26 to be between $11.25 billion and $13 billion, with total revenue and other income expected between $1.4 billion and $1.575 billion, indicating cautious optimism for future growth, albeit below the market consensus of $1.52 billion.
See More
Pagaya Closes $800 Million ABS Transaction, Largest Since November 2024
- Record Transaction Size: Pagaya successfully closed an $800 million AAA-rated personal loan ABS transaction (PAID 2026-1), marking the largest securitization since November 2024 and reinforcing its leadership in the U.S. personal loan ABS market.
- Strong Investor Participation: The transaction attracted 32 unique investors, with the majority being repeat participants, highlighting the sustained demand for Pagaya's AI-enabled assets in the consumer credit ABS market, as the deal size was upsized by 33% from its initial $600 million target.
- Ongoing Market Demand: Since 2018, Pagaya has issued over $34.5 billion across 85 ABS transactions, engaging more than 150 institutional investors, demonstrating its robust financing capabilities across personal loans, auto, and POS programs.
- Strategic Execution Capability: Pagaya's Head of Capital Markets noted that this transaction reflects steady institutional demand for well-structured consumer credit ABS, with the company's programmatic issuance approach and network scale enabling consistent access to the securitization market across varying market conditions.
See More
PGY Options Contract Analysis and Investment Opportunities
- Put Option Appeal: The current bid for PGY's $17.00 put option is $4.30, and if an investor sells this contract, their effective purchase price drops to $12.70, providing an attractive 10% discount compared to the current price of $18.92, appealing to potential buyers of PGY.
- Yield Potential Analysis: Should the put option expire worthless, it would yield a 25.29% return on cash commitment, equating to an annualized yield of 18.50%, highlighting the YieldBoost potential that attracts income-focused investors.
- Call Option Return Expectations: The $25.00 call option for PGY has a current bid of $5.00, and if an investor buys shares at $18.92 and sells this contract, they could achieve a total return of 58.56% if the stock is called away by June 2027, indicating strong profit potential.
- Risk-Reward Trade-off: Given that the $25.00 strike price represents a 32% premium over the current stock price, with a 37% chance of the call option expiring worthless, investors could retain both their shares and the premium collected, enhancing investment flexibility.
See More
Pagaya Partners with Sound Point for $720M Loan Deal
- First Forward-Flow Deal: Pagaya has entered into an agreement with Sound Point Capital to purchase up to $720 million in point-of-sale loans, marking its first forward-flow deal for POS assets and enhancing the diversity of its funding channels.
- Strong Institutional Demand: This transaction highlights the robust demand from institutional investors for Pagaya's POS assets, indicating the company's potential and market recognition in expanding consumer credit opportunities.
- Strategic Capital Connection: Pagaya President Sanjiv Das stated that this partnership connects capital with the responsible expansion of consumer credit opportunities, underscoring the strategic significance of the company in meeting market demand.
- Slight Stock Increase: Following the announcement, Pagaya's shares edged up 0.4% in midday trading, reflecting a positive market reaction to the deal and an increase in investor confidence.
See More
Pagaya Technologies Expected to Report Strong Earnings
- Earnings Expectations: Wall Street anticipates Pagaya Technologies will report an earnings per share (EPS) of $0.34 on revenue of $349 million, indicating a strong growth trajectory in profitability.
- Outperformance Record: The company has exceeded earnings expectations in three out of the last four quarters, while revenue has surpassed estimates in all four quarters, demonstrating the effectiveness of its business model and robust market demand.
- Analyst Ratings: Freedom Capital initiated coverage on Pagaya with a price target of $30 and a ‘Buy’ rating, reflecting confidence in its AI-driven credit underwriting capabilities and unique two-sided ecosystem.
- Investor Sentiment: Retail sentiment on Stocktwits is trending bullish, with PGY stock being the third most popular ticker, indicating strong investor confidence in the company's future growth potential.
See More
Pagaya Technologies and Sound Point Strike $720M Loan Deal
- Loan Agreement Reached: Pagaya Technologies has struck a $720 million forward flow loan deal with Sound Point, which is expected to significantly enhance the company's liquidity, thereby supporting its expansion in the fintech sector.
- Mixed Earnings Report: Pagaya's Q4 earnings report showed mixed results, yet the company is poised for profitability growth in upcoming quarters, reflecting a potential reassessment of its market value.
- Investor Misunderstanding Addressed: The misunderstanding among investors regarding Pagaya has created a launchpad for repositioning, and with strategic adjustments, the company may attract more investor interest, driving a rebound in stock price.
- Future Outlook: Pagaya has initiated its outlook for FY26, indicating confidence in future growth, which is likely to draw more market participants and enhance its standing within the industry.
See More
Pagaya Technologies Q4 Earnings Beat Expectations
- Earnings Highlights: Pagaya's Q4 Non-GAAP EPS of $0.80 exceeded expectations by $0.03, indicating robust profitability, although revenue of $335 million, up 19.9% year-over-year, fell short of market expectations by $14.51 million.
- Adjusted EBITDA Growth: The company reported an adjusted EBITDA of $98 million, a 53% increase year-over-year, reflecting significant improvement in profitability driven by growth in FRLPC and enhanced operating leverage, despite missing the guidance range of $99 million to $109 million.
- Network Volume Performance: Pagaya's network volume reached $2.7 billion, a 3% year-over-year increase, with a 34% growth when excluding SFR, demonstrating continued market expansion, although it did not meet the expected range of $2.65 billion to $2.9 billion.
- Future Outlook: The company anticipates network volume for FY26 to be between $11.25 billion and $13 billion, with total revenue and other income expected between $1.4 billion and $1.575 billion, indicating cautious optimism for future growth, albeit below the market consensus of $1.52 billion.
See More
Pagaya Closes $800 Million ABS Transaction, Largest Since November 2024
- Record Transaction Size: Pagaya successfully closed an $800 million AAA-rated personal loan ABS transaction (PAID 2026-1), marking the largest securitization since November 2024 and reinforcing its leadership in the U.S. personal loan ABS market.
- Strong Investor Participation: The transaction attracted 32 unique investors, with the majority being repeat participants, highlighting the sustained demand for Pagaya's AI-enabled assets in the consumer credit ABS market, as the deal size was upsized by 33% from its initial $600 million target.
- Ongoing Market Demand: Since 2018, Pagaya has issued over $34.5 billion across 85 ABS transactions, engaging more than 150 institutional investors, demonstrating its robust financing capabilities across personal loans, auto, and POS programs.
- Strategic Execution Capability: Pagaya's Head of Capital Markets noted that this transaction reflects steady institutional demand for well-structured consumer credit ABS, with the company's programmatic issuance approach and network scale enabling consistent access to the securitization market across varying market conditions.
See More
PGY Options Contract Analysis and Investment Opportunities
- Put Option Appeal: The current bid for PGY's $17.00 put option is $4.30, and if an investor sells this contract, their effective purchase price drops to $12.70, providing an attractive 10% discount compared to the current price of $18.92, appealing to potential buyers of PGY.
- Yield Potential Analysis: Should the put option expire worthless, it would yield a 25.29% return on cash commitment, equating to an annualized yield of 18.50%, highlighting the YieldBoost potential that attracts income-focused investors.
- Call Option Return Expectations: The $25.00 call option for PGY has a current bid of $5.00, and if an investor buys shares at $18.92 and sells this contract, they could achieve a total return of 58.56% if the stock is called away by June 2027, indicating strong profit potential.
- Risk-Reward Trade-off: Given that the $25.00 strike price represents a 32% premium over the current stock price, with a 37% chance of the call option expiring worthless, investors could retain both their shares and the premium collected, enhancing investment flexibility.
See More
Pagaya Partners with Sound Point for $720M Loan Deal
- First Forward-Flow Deal: Pagaya has entered into an agreement with Sound Point Capital to purchase up to $720 million in point-of-sale loans, marking its first forward-flow deal for POS assets and enhancing the diversity of its funding channels.
- Strong Institutional Demand: This transaction highlights the robust demand from institutional investors for Pagaya's POS assets, indicating the company's potential and market recognition in expanding consumer credit opportunities.
- Strategic Capital Connection: Pagaya President Sanjiv Das stated that this partnership connects capital with the responsible expansion of consumer credit opportunities, underscoring the strategic significance of the company in meeting market demand.
- Slight Stock Increase: Following the announcement, Pagaya's shares edged up 0.4% in midday trading, reflecting a positive market reaction to the deal and an increase in investor confidence.
See More
