With the business potentially at an important milestone, we thought we'd take a closer look at Pagaya Technologies Ltd.'s (NASDAQ:PGY) future prospects. Pagaya Technologies Ltd., a product-focused technology company, deploys data science and proprietary artificial intelligence-powered technology for financial institutions and investors in the United States, Israel, the Cayman Islands, and internationally. With the latest financial year loss of US$128m and a trailing-twelve-month loss of US$89m, the US$837m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Pagaya Technologies' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts' expectations for the company.

Consensus from 7 of the American Software analysts is that Pagaya Technologies is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$27m in 2025. So, the company is predicted to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 127%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Pagaya Technologies' growth isn't the focus of this broad overview, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Pagaya Technologies is its relatively high level of debt. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in Pagaya Technologies' case is 71%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Pagaya Technologies, so if you are interested in understanding the company at a deeper level, take a look at Pagaya Technologies' company page on Simply Wall St. We've also put together a list of key factors you should further examine:

1. Valuation: What is Pagaya Technologies worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Pagaya Technologies is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Pagaya Technologies's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.