howdy,
This isn't financial advice, and I'm a moron so invest at your own risk. I'm sure there is information that I missed so do some due diligence and do some of your own research. To be completely honest, I've gotten burned on the calls I've been HODL'ing for a few weeks.
$PGY reported earnings on Monday, November 10, before market open. As with all financial tech companies the past few weeks have been incredibly brutal. This company is down over 50% from ATH's reached in mid-September, while showing robust growth QoQ. We've seen a recent revival in the past couple days, but not sure how long that will last.
* Q3 Revenue at 350m, up 35% YoY
* Network volume topping record at 2.8B, up 15% YoY
* $23M Net Income, up from $67M Loss last year
PGY is a financial tech company that uses an AI model to asses credit risk and allows various financial institutions to use their AI model to determine credit risk for the consumers purchasing loans. Taken from [some dude's Substack](https://mvcinvesting.substack.com/p/pagaya-technologies-pgy-investment), "Pagaya operates at the intersection of lenders, borrowers, and investors. It embeds its AI underwriting technology within the platforms of over 30 financial institutions — including US Bank, SoFi, Ally Financial, and Klarna — to assess consumer loan applications."
* **Bullish Sentiment Sans Earning**
* Growth is the name of the game with this company with 3 sequential quarters of profit, and 30% QoQ growth in revenue
* Recently filled a gap of about $23.8 when the price shot up upon reports of reporting their Q2 preliminary results ahead of the estimated earnings date
* Undervalued with a P/S ration of about 2, depending on how you calculate it (Market cap of less than 2 billion with revenue over 1 billion annually (which may even be higher come Q3 reporting), which is expected to increase during Q3 reporting)
* AI AI AI AI AI AI AI AI AI AI AI AI (what bubble)
* Growing margin
* Q1 margin hit a record of about 4.8% - meaning they generate revenue of $4.8 million on a $100 million loan from their network. As their model becomes more fleshed out and larger, this margin can increase, or the margin will increase while their expenses could theoretically decrease
* **Bearish**
* Large balance sheet, about $900 million in liabilities vs. 1.4 billion in total assets, [sourced from Yahoo](https://finance.yahoo.com/quote/PGY/balance-sheet/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAF-Qba6JL1dH0BvWWMeSK9Hb4wXYe7LX2oVCFdloe_OEVGxSRK2pRUP1gtnMgHkq9rhuKhlHm08JTlIBHvUJJkEit5zwEhso2gEA3inAmohRMoejNkxE6dVWZpW_UBvJIjN3xmvbL_-_SKOBccJq-59rF1pRpRnui8-Rm3y_J-qm).
* These numbers aren't inherently bad, i.e., it isn't bad for a company to have this much in liabilities; however, for a fintech company it poses the question as to whether or not they're adequately able to sell these liabilities and whether the consumers who are paying these loans may default on them providing outsized risk to PGY. Granted, if PGY is creating these loans and they default on them-perhaps the AI model needs some work
* Low industry sentiment
* If the economy is slowing down and jobs aren't being created, [and there are always more cockroaches as Mr. Diamond says](https://www.cnn.com/2025/10/16/business/jamie-dimon-us-economy-cockroaches), then the consumer credit will be taking a hit. Less jobs means less people taking out lines of credit to purchase new cars (a sector PGY has been killing lately) PGY will have less customers. However, this isn't an argument I am necessarily buying but that a lot of MMs and hedge funds are taking into consideration. *See $UPST & $SOFI*
Obligatory short interest comment, it's about 24% which I expect to have grown since they've been piling into a stock that has just been getting hammered and hammered. **I don't think** there will be a short squeeze, but there could definitely be a small amount that cover. Whether or not you want to play earnings I think this is a great long term opportunity and they have their shit figured out. Revenue increases, profit margin has been increasing, they're just getting their feet wet and are bound to partner with more large firms soon.
I think overall it is a speculative time to invest in *anything*; however, I think this company is insanely undervalued - $1.8B MCap at about $1.5B in annual revenue. Would be stupid not to buy.
**Position:**
Position(s) attached, I have about 500 shares long, and a variety of calls that I'm down on but holding on to because I'm a moron.
warm regards,