2024-02-11 20:04:45 ET
Summary
- Pagaya is a hidden gem with tremendous upside potential.
- I believe its risks of cyclicality, credit, and financial sector risks are already reflected in its low price of $1.10.
- It has an excellent de-risking AI business model at scale for lenders and investors.
- The decision to list on a US exchange and move its headquarters to New York should meaningfully help its valuation.
- It has improved its margins with a $100Mn adjusted EBITDA run rate.
An excellent business model
Pagaya Technologies ( PGY ) is a decent story with possible asymmetrical returns given the extremely low valuation of $1.11 and a market cap of just $855Mn. Pagaya is a Fintech, pick and shovels, AI play providing a platform/software service to commercial lenders like Visa, banks, and even Fintech competitor SoFi Technologies ( SOFI ).
Let’s take a deeper dive into Pagaya's business model. Unlike Upstart, ( UPST ) and SoFi Technologies, Pagaya doesn’t keep any loans on its books, except a small percentage of securitizations made by them for mandatory risk retention compliance....
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Market Is Giving Up Too Easily On Pagaya Technologies, It Has Potential