Shareholders in Pagaya Technologies Ltd. (NASDAQ:PGY) had a terrible week, as shares crashed 27% to US$9.47 in the week since its latest quarterly results. It was a pretty bad result overall; while revenues were in line with expectations at US$257m, statutory losses exploded to US$0.93 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Pagaya Technologies after the latest results.
Taking into account the latest results, the consensus forecast from Pagaya Technologies' eight analysts is for revenues of US$1.16b in 2025. This reflects a notable 20% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Pagaya Technologies forecast to report a statutory profit of US$0.44 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.18b and earnings per share (EPS) of US$0.39 in 2025. Although the revenue estimates have not really changed, we can see there's been a nice gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The average the analysts price target fell 9.3% to US$20.75, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Pagaya Technologies analyst has a price target of US$36.00 per share, while the most pessimistic values it at US$11.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Pagaya Technologies' past performance and to peers in the same industry. We would highlight that Pagaya Technologies' revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2025 being well below the historical 37% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% per year. So it's pretty clear that, while Pagaya Technologies' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Pagaya Technologies' earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Pagaya Technologies' future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Pagaya Technologies analysts - going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for Pagaya Technologies (1 makes us a bit uncomfortable!) that you need to take into consideration.
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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.
