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Key Takeaways PGY leads OneMain in 2026 revenue and earnings growth estimates, ROE and six-month stock performance.Pagaya's AI-driven lending network, expanding partnerships and auto financing growth support its outlook.OneMain offers a lower valuation and stronger 2027 earnings growth outlook but faces debt and credit risks. The consumer lending industry continues to evolve amid changing borrowing trends, credit conditions and the growing adoption of technology-driven lending solutions. OneMain Holdings (OMF - Free Report) and Pagaya Technologies (PGY - Free Report) are two companies positioned to capitalize on opportunities in this market. While OneMain focuses on providing personal loans and auto financing to non-prime consumers, Pagaya leverages artificial intelligence (AI) to enhance credit underwriting and expand lending opportunities through its financial institution partners.

OneMain’s diversified lending portfolio, established customer base and expanding auto finance operations support its growth prospects. Meanwhile, Pagaya’s AI-powered lending network, growing partnerships and expanding presence in personal and auto loans offer opportunities to increase network volume and strengthen its revenue base.

Although both companies have growth opportunities, differences in their operating models, credit risk exposure and funding strategies could influence their long-term performance. Against this backdrop, let us compare OMF and PGY’s fundamentals, growth prospects, earnings estimate revisions and valuations to determine which stock presents a more compelling investment opportunity.

The Case for PGYPagaya has been strengthening its position in AI-driven consumer lending through its expanding presence in personal loans, auto finance and point-of-sale (POS) financing. Its capital-efficient business model, growing lending partnerships and technology-driven underwriting capabilities support network expansion. In the first half of 2026, network volume reached $6.2 billion, driven largely by auto and POS lending growth. With access to more than 40% of the U.S. dealer market, Pagaya is well-positioned to capitalize on opportunities in auto financing.

Pagaya’s diversified funding ecosystem remains a key competitive advantage. In the second quarter of 2026, it raised $3.7 billion across six asset-backed securitization (ABS) transactions and expanded its institutional investor base to 174. The company also secured its first forward flow agreement with Neuberger Specialty Finance for up to $700 million in auto loans. Further strengthening its funding capabilities, Pagaya closed its 100th ABS transaction, a $650-million auto loan securitization, on Oct. 12, bringing lifetime ABS issuance above $44 billion and 2026 issuance above $10 billion.

PGY’s proprietary AI technology and multi-product expansion provide additional growth opportunities. Its pre-screening capabilities, Affiliate Optimizer engine and Experian Activate solution help lending partners expand credit access and improve customer engagement. In the second quarter, Affiliate Optimizer contributed more than $1 billion in network volume, while application volume increased 29% year over year. The company also onboarded seven new partners over six months across personal loans, auto and POS, supporting deeper market penetration and revenue diversification.

Improving operating leverage and disciplined expense management are supporting Pagaya’s profitability. In the first half of 2026, total revenues and other income increased to $705 million from $616.4 million a year earlier, while total costs and operating expenses rose modestly to $519.2 million from $512.2 million. Management expects 2026 GAAP net income of $155-$180 million and adjusted EBITDA of $460-$490 million, reflecting confidence in continued business scalability and margin expansion.

Pagaya expects 2026 network volume of $12.5-$13.25 billion, supported by higher penetration among existing partners, auto lending momentum and new product initiatives. However, dependence on institutional funding, lending partner activity and consumer credit conditions remains a risk. Sustained network growth, disciplined costs and continued funding access will be crucial to translating its expanding lending ecosystem into durable earnings growth.

The Case for OMFOneMain provides secured and unsecured personal installment loans for debt consolidation, home improvements, medical expenses and other personal needs. With approximately 1,300 locations across 47 states, the company maintains an extensive distribution network. It also offers optional credit and non-credit insurance products, including life, disability and involuntary unemployment insurance, supporting revenue diversification.

Revenue growth remains a key strength for OneMain. The company saw a revenue compound annual growth rate (CAGR) of 4.9% between 2020 and 2025, with the momentum continuing in the first half of 2026, supported by higher interest income, improved loan yields and other revenue streams. Its focus on product innovation and expansion into auto finance and credit cards is expected to drive growth.

OneMain maintains a diversified funding structure, supported by secured revolving credit facilities, credit card funding lines and asset-backed securitizations. As of June 30, 2026, the company had $23.1 billion in total debt and $567 million in cash and cash equivalents. Its long-term corporate debt ratings of BB from S&P, Ba2 from Moody’s and BB+ from Kroll reflect its below-investment-grade credit profile. Nevertheless, access to multiple funding channels provides financial flexibility and supports lending operations.

Despite its exposure to subprime borrowers and economic uncertainties, OneMain emphasizes disciplined underwriting, centralized data analytics and proactive loan servicing to manage credit risks. Its Front Book and Back Book loan mix helps balance portfolio returns and credit performance across economic cycles. Continued investments in risk management, coupled with diversification into auto finance and credit cards, are expected to strengthen business resilience.

OneMain remains committed to enhancing shareholder value through dividends and share repurchases. Since initiating dividends in 2019, the company has increased its payout eight times, with the latest hike of approximately 1% announced in October 2025. Its board also authorized a $1-billion share repurchase program through Dec. 31, 2028, with $826.7 million remaining available as of June 30, 2026. Despite its substantial debt burden, steady revenue growth, diversified funding sources and disciplined capital management are expected to support shareholder distributions.

PGY & OMF: Price Performance, Valuation & Other ComparisonsIn the past six months, shares of Pagaya have gained 14.3%, outperforming the S&P 500 Index’s 10.5% growth. In the same time frame, the OMF stock has lost 5.2%.

Hence, in terms of investor sentiment, PGY has the edge.

6-Month Price Performance
Image Source: Zacks Investment Research

From a valuation perspective, Pagaya is currently trading at a trailing 12-month price-to-book (P/B) of 2.16X, while the OMF stock is trading at a trailing 12-month P/B of 1.86X. So, in terms of valuation, PGY is expensive compared with OneMain.

P/B TTM
Image Source: Zacks Investment Research

Pagaya’s return on equity (ROE) of 58.14% is above OneMain’s 23.49%. This reflects that PGY is more efficient in using shareholder funds to generate profits.

ROE
Image Source: Zacks Investment Research

Pagaya & OneMain’s Earnings & Sales ProspectsThe Zacks Consensus Estimate for PGY’s 2026 and 2027 revenues indicates year-over-year growth of 11.8% and 14.2%, respectively.

The consensus estimate for PGY’s earnings indicates 11.2% and 12.2% year-over-year growth for 2026 and 2027, respectively.

PGY’s Earnings Growth Estimate
Image Source: Zacks Investment Research

On the contrary, the Zacks Consensus Estimate for OMF’s 2026 and 2027 revenues implies year-over-year increases of 6% and 7.5%, respectively.

Also, the consensus estimate for OneMain’s earnings indicates 1.1% growth for 2026 and a 25.1% rise for 2027.

OMF’s Earnings Growth Estimate
Image Source: Zacks Investment Research

PGY or OMF: Which Stock Offers Better Upside Potential?Pagaya’s AI-driven lending platform, expanding partner network and capital-efficient business model position it well for long-term growth. Its stronger revenue and earnings growth projections for 2026, superior ROE and favorable share price performance give it an edge over OneMain. However, its relatively expensive valuation, dependence on institutional funding and exposure to changing credit conditions remain concerning.

Meanwhile, OneMain benefits from its established lending operations, diversified funding sources and consistent shareholder returns. Its relatively attractive valuation and stronger earnings growth outlook for 2027 are encouraging, although elevated debt levels and exposure to non-prime borrowers pose risks.

Despite their growth opportunities, both PGY and OMF currently carry a Zacks Rank #4 (Sell), indicating a cautious near-term outlook. Hence, investors may prefer to stay on the sidelines for now and await more favorable earnings estimate revisions and an improvement in their Zacks Ranks before considering either stock.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Pagaya raised $3.7B across six ABS deals in Q2'26 and added 11 institutional investors.PGY secured major auto, personal-loan and receivables facilities to broaden funding flexibility.Pagaya's 2026 ABS issuance topped $9B, showing securitization remains central to its funding model. Pagaya Technologies (PGY - Free Report) is steadily broadening its funding base, which could make its capital model more resilient. In second-quarter 2026, it raised $3.7 billion across six asset-backed securities (ABS) transactions and added 11 new institutional investors, taking the total to 174. At the same time, the company is expanding committed-capital structures outside traditional securitization markets, improving funding flexibility and visibility.

Recent transactions reinforce this shift. Pagaya secured up to $700 million in auto funding from Neuberger Specialty Finance, a nearly $700-million Variable Funding Note facility with ATLAS SP Partners and a $460-million revolving personal-loan facility expected to support about $850 million in capital deployment. It also expanded its ALPF receivables facility to $100 million. Together, these arrangements broaden funding flexibility and reduce reliance on the timing of public securitizations.

That flexibility could become increasingly important as Pagaya scales across personal loans, auto and point-of-sale financing. Its auto business reached an annualized network-volume run rate of $4.8 billion in the second quarter, while total quarterly network volume was $3.5 billion. Management has indicated that a growing portion of funding now comes through non-prefunded structures, including forward-flow and revolving arrangements. A broader mix of committed funding sources could help Pagaya better match different asset classes with different pools of institutional capital and reduce execution risk during periods when securitization spreads widen or investor demand weakens.

However, the company is not moving away from ABS in any meaningful sense yet. A few days ago, Pagaya completed a $600-million AAA-rated personal-loan securitization, lifting 2026 ABS issuance to more than $9 billion, including more than $6 billion tied to personal loans. The transaction drew 47 investors, including three new participants, underscoring continued demand for Pagaya-backed assets. Importantly, some of the newer funding structures are designed to bridge loans into eventual securitizations, meaning they can support the ABS model rather than substitute for it.

Hence, Pagaya appears to be building a more diversified funding architecture rather than replacing securitization. Forward-flow agreements, revolving facilities and warehouse-style structures should improve capital availability and reduce funding concentration risk, which is constructive for growth and execution. Still, record ABS issuance shows that securitization remains a core funding engine.

Comparing Pagaya’s Business Model With PeersLike PGY, Upstart Holdings, Inc. (UPST - Free Report) is an artificial intelligence (AI)-based lending platform that aspires to become capital-light but often holds loans on its balance sheet temporarily. The company’s core business model involves finding financing for loans after its network of bank and institutional partners originates them.

Upstart partner banks can finance the loan by keeping it on their balance sheet. The bank can sell the whole loan on Upstart’s platform or use forward flow agreements from institutions that commit to buying a specific volume or type of loan originated on the Upstart platform in the future.

Upstart also uses securitization, wherein pools of loans are bundled together and sold as ABS to institutional investors. However, the firm frequently reverts to a balance-sheet-heavy model, especially in tight liquidity markets, making it more volatile and exposed to macro cycles.

Another close competitor of PGY is LendingTree (TREE - Free Report) . But unlike PGY, LendingTree is a marketplace platform, not a lender. It matches consumers with financial product providers like mortgages, personal loans, credit cards and insurance.

LendingTree does not underwrite, originate or hold loans. Hence, its balance sheet is not credit-heavy. TREE’s balance sheet is detached from revenue generation. The company is primarily structured to support a fee-based digital marketplace, not balance sheet lending.

PGY’s Price Performance, Valuation & Estimate AnalysisOver the past six months, Pagaya shares have gained 51.9%, outperforming the industry’s growth.

Image Source: Zacks Investment Research

The stock is currently trading at a 12-month forward price-to-sales of 0.94X, which is below the industry average of 2.70X.

Image Source: Zacks Investment Research

Over the past seven days, the Zacks Consensus Estimate for PGY’s 2026 and 2027 earnings has been unchanged at $3.68 and $4.13, respectively. The consensus estimate indicates 11.2% and 12.2% year-over-year growth for 2026 and 2027, respectively.

Image Source: Zacks Investment Research

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Latest deal brings Pagaya’s year-to-date ABS issuance to over $9 billion NEW YORK--(BUSINESS WIRE)--Pagaya Technologies Ltd. (NASDAQ: PGY) (“Pagaya”), a global technology company delivering AI-driven product solutions for the financial ecosystem, today announced the closing of a $600 million AAA-rated personal loan ABS transaction (PAID 2026-6).

“We achieved tighter pricing on this transaction relative to recent deals, which reflects strong investor confidence in Pagaya's credit performance and underwriting platform," said Sahil Chandiramani, Head of Capital Markets at Pagaya. “As we evolve our funding model, we're balancing programmatic syndicated issuance with new products, including private revolving structures and warehouse lines. A diversified funding strategy gives us more flexibility and reduces reliance on any single channel—allowing us to scale efficiently in all market environments."

Forty-seven unique investors participated, including three new investors to Pagaya’s broader ABS platform. The deal brings Pagaya’s year-to-date personal loan ABS issuance to over $6 billion and Pagaya’s total issuance this year to over $9 billion, both marking records for the company.

About Pagaya Technologies

Pagaya (NASDAQ: PGY) is a global technology company making life-changing financial products and services available to more people nationwide, as it reshapes the financial services ecosystem. By using machine learning, a vast data network and an AI-driven approach, Pagaya provides consumer credit and other products for its partners, their customers, and investors. Its proprietary API and capital solutions integrate into its network of partners to deliver seamless user experiences and greater access to the mainstream economy. For more information, visit pagaya.com.

More News From Pagaya Technologies Ltd.

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Small-cap companies are accustomed to living in the shadow of mega-cap tech firms, but there are signs that the market backdrop could be changing for some of these companies. Investors have been looking beyond the Magnificent Seven for growth opportunities, and smaller companies with improving fundamentals, unique business models, or other noteworthy catalysts may finally have an opportunity to win investor attention.

As interest rates have recently risen, it may be a chance for contrarian investors to buy in before economic conditions continue to improve for small companies seeking financing. At the same time, the distinction between valuations of large- and small-caps remains atypically wide, which means that there may be chances to rotate into smaller names if the risk environment improves. Of course, small-caps still come with their share of risks, including volatility, operational concerns, cash flow, and more. But with all this in mind, the three companies below may stand out for their fundamentals and unique catalysts that could indicate growth going forward.

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An Oncology Biotech Poised for a Commercial BreakthroughAscentage Pharma Group International Stock Forecast Today12-Month Stock Price Forecast:
$46.43
213.92% Upside

Buy
Based on 10 Analyst Ratings

Current Price$14.79High Forecast$51.00Average Forecast$46.43Low Forecast$40.00Ascentage Pharma Group International Stock Forecast Details

Ascentage Pharma Group International NASDAQ: AAPG is moving from a clinical-stage biotech company into a more established commercial oncology business thanks to its primary commercial product, olverembatinib, used to treat certain types of leukemia. The company has also expanded its pipeline and has hematology and oncology candidates in various ongoing clinical trials.

For the first half of 2026, revenue climbed by more than 29% year over year (YOY) to $44.5 million, fueled by $41.6 million in product sales. The company's reach is global, and its business has been particularly strong in China. At the same time, it maintained more than $279 million in cash and equivalents as of the midpoint of the year, providing a runway through the end of 2027.

Ascentage carries many of the typical risks and opportunities associated with growth-stage biotech firms. It is still unprofitable and spends cash quickly, as R&D costs increased by nearly a third YOY in H1 2026, and the company anticipates significant capital needs to facilitate commercialization going forward. Its success also hinges on key trial results and approvals for its pipeline.

Nonetheless, the fact that commercial revenue is scaling and the company has strong drug prospects going forward has earned it a unanimous Buy rating from 10 analysts, along with a price target of $46.43.

Multiple Promising Drug Candidates and Strong Financials for MazeMaze Therapeutics Stock Forecast Today12-Month Stock Price Forecast:
$63.40
144.03% Upside

Buy
Based on 13 Analyst Ratings

Current Price$25.98High Forecast$110.00Average Forecast$63.40Low Forecast$46.00Maze Therapeutics Stock Forecast Details

Another biotech company with upcoming clinical milestones that could drive growth, Maze Therapeutics NASDAQ: MAZE, focuses on genetically driven diseases. Its primary drug candidate is MZE829, which targets APOL1-mediated kidney disease (AMKD), a condition affecting more than 1 million people in the United States alone. Maze reported positive topline data for a Phase 2 trial of MZE829 in March 2026, a critical step toward approval and eventual commercialization.

The company stands out for having additional drug candidate opportunities. Additional Phase 2 studies for other drugs in development are expected in the coming quarters. While the results of these pending trials are unclear, the fact that the company has a more diversified pipeline than some of its competitors helps it stand out.

Maze also distinguishes itself by its financial position: the company had about $528 million in cash and equivalents as of its most recent earnings report, thanks to a successful capital raise. This should provide it sufficient runway to extend operations into 2029 while limiting near-term financing risks. The combination of more stable financials and promising drugs in development has led analysts to overwhelmingly rate MAZE shares a Buy. As with AAPG above, Wall Street expects MAZE shares to more than double.

Pagaya's Volumes and Profitability Could Win Over SkepticsPagaya Technologies Stock Forecast Today12-Month Stock Price Forecast:
$31.25
67.70% Upside

Buy
Based on 12 Analyst Ratings

Current Price$18.63High Forecast$36.00Average Forecast$31.25Low Forecast$25.00Pagaya Technologies Stock Forecast Details

Fintech firm Pagaya Technologies Ltd. NASDAQ: PGY has successfully integrated AI and data analytics to help lenders make credit decisions. The company enjoyed strong revenue growth of about 19% YOY for the latest quarter, combined with GAAP net income that surged by more than 180% over the same period.

The company is performing well on multiple fronts: partners have sent more volume, revenues from fees less production costs are soaring, and expenses have remained stable. With it earning up to about 5% in net fees per loan issued, Pagaya can afford to be asset-light to aid in its profitability. On top of that, an increase in volume has helped to put to rest the lingering concern that Pagaya may not have enough investors willing to take on loans.

To be sure, Pagaya remains a riskier play than some other fintech names owing to its size, the risks to the funding market overall, the potential for a macro slowdown, and more. However, Wall Street analysts are heavily bullish on PGY shares and have assigned a fairly lofty consensus price target of $31.25 per share.

Should You Invest $1,000 in Ascentage Pharma Group International Right Now?Before you consider Ascentage Pharma Group International, you'll want to hear this.

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Key Takeaways Pagaya trades at a 0.89X forward P/S, below the industry average and key competitors.PGY raised $3.7B across six ABS deals in 2Q26 and added 11 investors, bringing its total to 174.Pagaya's 1H26 revenues rose to $705M, while core operating expenses declined 6% y/y. The Pagaya Technologies (PGY - Free Report) stock is currently undervalued in terms of its price/sales (P/S) ratio when compared with peers. While making investment decisions, investors mostly look at a company’s valuation. Specifically, value investors try to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts compared with fair value.

Such investors sometimes prefer to look at a company’s P/S ratio because this metric considers sales, something that is far harder to manipulate with accounting tricks than earnings. In the case of PGY, which is one of the most compelling fintech companies in today’s market, the stock is currently trading at a forward 12-month P/S ratio of 0.89X, below the industry average of 2.59X.

Also, as you can see in the chart below, PGY’s current P/S ratio is significantly lower than its high over the past three years, which suggests some level of undervalued trading compared with historical norms.

P/S (F12M)
Image Source: Zacks Investment Research

Pagaya’s valuation also compares favorably to its close competitors, Upstart Holdings (UPST - Free Report) and Virtu Financial, Inc. (VIRT - Free Report) . Upstart is currently trading at a forward 12-month P/S ratio of 1.29X, while Virtu Financial has a P/S (F12M) of 3.22X.

Thus, Pagaya seems like an attractive investment option now if we consider its P/S ratio. Its low valuation reflects that it is currently trading at a discount and, hence, has the potential for significant gains when the market recognizes its true worth.

However, before making any investment decision, it is better to have a look at the company’s fundamentals and growth prospects.

Key Positives of PagayaDiversified Funding Base: A diversified funding base is a key positive for Pagaya. The company continues to broaden its funding base, supporting an upfront model that raises cash before loans are originated. In second-quarter 2026, Pagaya raised $3.7 billion in funding across six asset-backed securities (ABS) transactions, its largest quarterly funding volume to date.

It also added 11 new investors, bringing the total to 174. Further strengthening its funding diversity, Pagaya has entered its first forward flow agreement with Neuberger Specialty Finance for the purchase of up to $700 million of auto loans sourced through its lending network.

Funding channels are becoming more flexible, with 40% of funding now coming through non-prefunded ABS products alongside forward flow and revolving structures. The company has expanded its ALPF receivables facility to $100 million from $65 million. This broader funding base improves execution visibility as network volume scales across personal loans, auto and point of sale (POS).

Multi-Product Expansion: Multi-product expansion is expected to deepen Pagaya’s partner economics. New products are widening partner use cases and raising revenues per application. In first-half 2026, revenues from fees increased as partner adoption broadened. The company's product-led playbook is being applied across personal loans, auto and POS, supported by pre-built integrations that can shorten partner onboarding.

In personal loans, the Affiliate Optimizer engine contributed more than $1 billion of network volume in the second quarter. Experian Activate has been adopted by key partners, with additional partners targeted in the second half of 2026, including regional banks.

In auto, Pagaya is using dynamic offer optimization to structure down payment, annual percentage rate, loan-to-value and term in real time at the dealer point of sale. Seven new partners were onboarded over the last six months across personal loans, auto and POS, supporting broader penetration beyond the company's flagship product.

Improving Operating Leverage: Improving operating leverage and cost efficiency has been driving Pagaya’s earnings growth of late. Across 2025, monetization and efficiency strengthened. The company’s revenue growth outpaced expense growth, allowing margins to improve and turning prior losses into positive net income.

In 2025, adjusted EBITDA rose sharply, showing that the platform scaled efficiently as utilization increased. The company’s profitability streak continued in 2026, with spending in check. In the first half of this year, total revenues increased to $705 million from $616.4 million in the year-ago period, while operating expenses rose only slightly to $519.2 million from $512.2 million. Core operating expenses declined 6% year over year and were 31% of fee revenue less production costs, a record low.

Management noted that core OpEx has been broadly flat for about 18 months, even as revenues and profits scaled. Management expects 2026 GAAP net income of $155-$180 million and adjusted EBITDA of $460-$490 million, reflecting confidence in further scale without a major expense ramp.

Analyzing PGY’s Price PerformancePagaya has performed remarkably well this year. Over the past six months, the PGY stock has gained 49.1%, outperforming the industry’s 4.6% rally. The company’s performance has also been better than that of Upstart and Virtu Financial.

Upstart shares have lost 9.8% and the VIRT stock has appreciated 22.2% in the past six months.

6-Month Price Performance
Image Source: Zacks Investment Research

Analyst Sentiments on Pagaya StockAnalysts do not seem too optimistic regarding PGY’s earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for Pagaya’s 2026 and 2027 earnings has been unchanged at $3.72 and $4.13, respectively.

Earnings Estimate Revision
Image Source: Zacks Investment Research

How to Approach the PGY Stock?Pagaya’s discounted valuation, expanding funding base, multi-product growth and improving operating leverage provide a solid foundation for long-term upside. The company is scaling revenues without a comparable increase in expenses, while greater use of forward-flow and other diversified funding structures should improve funding flexibility as network volume grows.

However, the current valuation discount alone may not be enough to support a more bullish stance. Funding costs and tighter ABS economics are pressuring revenue generated per unit of network volume, with fee revenue less production costs as a percentage of network volume declining year over year in the first half of 2026.

At the same time, earnings estimates for 2026 and 2027 have been unchanged over the past month, indicating a lack of near-term upward revisions that could provide another catalyst for the shares.

Therefore, Pagaya’s improving profitability, scalable platform and attractive valuation support retaining the stock, but margin pressures and muted earnings-estimate revisions argue against becoming too aggressive at current levels. Investors should prefer to wait for clearer evidence of stabilization in capital-markets economics or stronger earnings-revision momentum before building fresh positions.

At present, Pagaya carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NEW YORK--(BUSINESS WIRE)--Pagaya Technologies Ltd. (NASDAQ: PGY) (“Pagaya”), a global technology company delivering AI-driven product solutions for the financial ecosystem, today announced the closing of its inaugural Variable Funding Note (VFN) facility with ATLAS SP Partners (“ATLAS”), the warehouse finance and securitized products business majority owned by Apollo Funds. The new revolving structure expands Pagaya's committed capital strategy, establishing nearly $700 million in funding capa.

SummaryPagaya Technologies is undervalued on a GAAP basis, trading at 11.6x 2026 earnings, with a 12-month price target of $28 (34% upside).PGY's platform demonstrates strong operating leverage: Q2 volume grew 33% year-over-year, revenue rose 19%, and core opex fell 6%.Adjusted EPS overstates true profitability; recurring fair value losses on retained securitization interests are a real, material cost.Key risks include consumer credit downturns, funding market disruptions, higher rates, and dilution; position sizing should reflect volatility.Editor's note: Seeking Alpha is proud to welcome Only Trades as a new contributing analyst. You can become one too! Share your best investment idea by submitting your article for review to our editors. Get published, earn money, and unlock exclusive SA Premium access.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Pagaya Technologies Ltd. (PGY - Free Report) ended the recent trading session at $17.62, demonstrating a -5.88% change from the preceding day's closing price. This change lagged the S&P 500's 0.51% gain on the day. At the same time, the Dow added 0.93%, and the tech-heavy Nasdaq gained 0.48%.

The stock of company has fallen by 19.52% in the past month, lagging the Finance sector's loss of 3.64% and the S&P 500's gain of 0.74%.

The investment community will be paying close attention to the earnings performance of Pagaya Technologies Ltd. in its upcoming release. The company's earnings per share (EPS) are projected to be $0.97, reflecting a 4.9% decrease from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $382.55 million, indicating a 9.25% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $3.72 per share and revenue of $1.47 billion, which would represent changes of +12.39% and +13.01%, respectively, from the prior year.

Any recent changes to analyst estimates for Pagaya Technologies Ltd. should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection remained stagnant. As of now, Pagaya Technologies Ltd. holds a Zacks Rank of #1 (Strong Buy).

In the context of valuation, Pagaya Technologies Ltd. is at present trading with a Forward P/E ratio of 5.03. This signifies a discount in comparison to the average Forward P/E of 11.2 for its industry.

The Financial - Miscellaneous Services industry is part of the Finance sector. Currently, this industry holds a Zacks Industry Rank of 104, positioning it in the top 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

NEW YORK--(BUSINESS WIRE)--Pagaya Technologies Ltd. (NASDAQ: PGY) (“Pagaya”), a global technology company delivering AI-driven product solutions for the financial ecosystem, today announced the closing of PAID 2026-REV1, the Company's second revolving structure this year. Backed by consumer loans originated on the Pagaya network, the transaction will close at an initial size of $460 million and will deploy approximately $850 million in total capital over a 24-month revolving period.Pagaya remain.

Pagaya Technologies Ltd. (NASDAQ:PGY – Get Free Report) Director Tami Rosen sold 8,504 shares of the business’s stock in a transaction that occurred on Friday, September 18th. The shares were sold at an average price of $20.38, for a total value of $173,311.52. Following the completion of the sale, the director directly owned 15,400 shares of the company’s stock, valued at approximately $313,852. The trade was a 35.58% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Tami Rosen also recently made the following trade(s):

On Saturday, September 12th, Tami Rosen sold 7,121 shares of Pagaya Technologies stock. The shares were sold at an average price of $20.21, for a total transaction of $143,915.41. On Thursday, September 3rd, Tami Rosen sold 1,265 shares of Pagaya Technologies stock. The stock was sold at an average price of $23.07, for a total transaction of $29,183.55. On Monday, August 3rd, Tami Rosen sold 28,181 shares of Pagaya Technologies stock. The stock was sold at an average price of $21.98, for a total transaction of $619,418.38. On Monday, June 22nd, Tami Rosen sold 9,944 shares of Pagaya Technologies stock. The shares were sold at an average price of $15.20, for a total transaction of $151,148.80. Pagaya Technologies Trading Down 0.7% Shares of PGY opened at $20.42 on Friday. The company has a current ratio of 11.08, a quick ratio of 11.08 and a debt-to-equity ratio of 1.12. The stock has a market cap of $1.70 billion, a PE ratio of 15.01 and a beta of 5.35. Pagaya Technologies Ltd. has a 1 year low of $10.40 and a 1 year high of $44.68. The stock has a 50 day simple moving average of $20.23 and a 200-day simple moving average of $16.06.

Wall Street Analysts Forecast Growth PGY has been the topic of several analyst reports. Jefferies Financial Group upped their target price on shares of Pagaya Technologies from $23.00 to $27.00 and gave the stock a “buy” rating in a report on Tuesday, August 18th. B. Riley Financial boosted their price target on shares of Pagaya Technologies from $32.00 to $36.00 and gave the company a “buy” rating in a research report on Friday, July 31st. Citizens Jmp upped their price objective on shares of Pagaya Technologies from $22.00 to $25.00 and gave the stock a “market outperform” rating in a research note on Friday, July 31st. Canaccord Genuity Group raised their price objective on shares of Pagaya Technologies from $32.00 to $36.00 and gave the stock a “buy” rating in a report on Friday, July 31st. Finally, Zacks Research raised Pagaya Technologies from a “hold” rating to a “strong-buy” rating in a report on Friday, August 7th. Three analysts have rated the stock with a Strong Buy rating, eight have issued a Buy rating and one has given a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Buy” and an average price target of $31.25. Get Our Latest Report on Pagaya Technologies

More Pagaya Technologies News Here are the key news stories impacting Pagaya Technologies this week:

Positive Sentiment: Zacks upgraded PGY to Rank #1, Strong Buy, citing improving earnings prospects. The stock was also added to Zacks’ Strong Buy and value-stock lists, potentially increasing visibility among quantitative and growth-focused investors. Pagaya upgraded to Strong Buy Positive Sentiment: Pagaya’s $700 million Neuberger forward-flow agreement adds funding capacity as its auto-finance business expands. Auto reportedly generated more than 75% of recent Network Volume growth, making the deal important for scaling originations and diversifying capital sources. Pagaya Neuberger deal Positive Sentiment: Recent analyses highlighted strong second-quarter 2026 results: Network Volume increased about 33% year over year, revenue rose roughly 19%–20%, and adjusted EBITDA grew 43%, while operating income climbed 87%. Expanding ABS issuance and forward-flow partnerships could support further growth and reduce funding concentration. Pagaya growth and profitability analysis Positive Sentiment: Analysts maintained bullish views, pointing to operating leverage, a 12% net-income margin, increasing partner volumes and valuation discounts versus peers. More than 45% of flow now comes from non-decline products, suggesting improving product diversification. Pagaya earnings analysis Neutral Sentiment: Pagaya appointed payments-industry veteran Jason Gardner to its board, adding relevant fintech and payments expertise, though the appointment does not immediately change earnings or guidance. Pagaya appoints Jason Gardner Negative Sentiment: Risks include take-rate compression from conservative securitization pricing, continued sensitivity to interest rates and PGY’s historically high volatility. Investors may also want evidence that rapid auto growth converts into durable margins and cash flow. Institutional Investors Weigh In On Pagaya Technologies Hedge funds have recently added to or reduced their stakes in the stock. Empowered Funds LLC grew its stake in shares of Pagaya Technologies by 4,562.7% during the first quarter. Empowered Funds LLC now owns 116,661 shares of the company’s stock valued at $1,359,000 after purchasing an additional 114,159 shares during the last quarter. SPX Gestao de Recursos Ltda raised its position in Pagaya Technologies by 49.7% in the 1st quarter. SPX Gestao de Recursos Ltda now owns 180,100 shares of the company’s stock worth $2,098,000 after purchasing an additional 59,800 shares during the last quarter. SG Americas Securities LLC bought a new position in Pagaya Technologies in the 1st quarter worth approximately $1,426,000. Edgestream Partners L.P. lifted its holdings in Pagaya Technologies by 353.2% during the 1st quarter. Edgestream Partners L.P. now owns 373,771 shares of the company’s stock worth $4,354,000 after buying an additional 291,291 shares in the last quarter. Finally, Quantinno Capital Management LP lifted its holdings in Pagaya Technologies by 357.4% during the 1st quarter. Quantinno Capital Management LP now owns 77,324 shares of the company’s stock worth $901,000 after buying an additional 60,418 shares in the last quarter. Institutional investors own 57.14% of the company’s stock.

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Pagaya Technologies Ltd. is a financial technology company that uses artificial intelligence and data analytics to facilitate access to credit and investment opportunities. Its technology platform evaluates loan and other credit-related assets, helping financial institutions make lending decisions and connect assets with institutional funding sources.

The company’s Pagaya Network is designed to integrate with banks, fintech companies and other originators. Through the network, Pagaya analyzes consumer credit, personal loan, auto loan and real estate-related assets, among other products, and helps distribute qualifying assets to institutional investors through structured financial vehicles.

Pagaya was founded in 2016 and is headquartered in New York, with roots in Israel.

Further Reading Five stocks we like better than Pagaya Technologies Lennar’s Earnings Miss May Be Sending a Bigger Warning About U.S. Housing Priced for a Pullback or More Gains? These 3 Stocks Are Testing the Limits These 3 Agentic AI Stocks Have More Than Hype Behind Their Growth Stories Not Just Banks: 3 Trading Stocks to Watch After the Fed Rate Hike

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Investors might want to bet on Pagaya Technologies Ltd. (PGY - Free Report) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.

A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.

The power of a changing earnings picture in determining near-term stock price movements makes the Zacks rating system highly useful for individual investors, since it can be difficult to make decisions based on rating upgrades by Wall Street analysts. These are mostly driven by subjective factors that are hard to see and measure in real time.

Therefore, the Zacks rating upgrade for Pagaya Technologies Ltd. basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.

Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. The influence of institutional investors has a partial contribution to this relationship, as these big professionals use earnings and earnings estimates to calculate the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their bulk investment action then leads to price movement for the stock.

For Pagaya Technologies Ltd., rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company's underlying business. And investors' appreciation of this improving business trend should push the stock higher.

Harnessing the Power of Earnings Estimate RevisionsAs empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .

Earnings Estimate Revisions for Pagaya Technologies Ltd.For the fiscal year ending December 2026, this company is expected to earn $3.72 per share, which is unchanged compared with the year-ago reported number.

Analysts have been steadily raising their estimates for Pagaya Technologies Ltd.. Over the past three months, the Zacks Consensus Estimate for the company has increased 16.4%.

Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.

You can learn more about the Zacks Rank here >>>

The upgrade of Pagaya Technologies Ltd. to a Zacks Rank #1 positions it in the top 5% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.

Pagaya Technologies retains a Buy rating, with conviction increased due to doubling of core earning power despite stock volatility. Q2 2026 results highlight 33% YoY network volume growth, 20% revenue growth, and operating income up 87%, with net income margin inflecting to 12%. Take rate compression is attributed to prudent securitization pricing and partner/product expansion, while operating leverage shields earnings from margin pressures.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of PGY, UPST either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Stock to Watch: Pagaya Technologies Ltd. (PGY - Free Report) Founded in 2016, Pagaya Technologies Ltd. operates primarily in the United States, with a corporate presence in New York and Tel Aviv. The company applies proprietary artificial intelligence (AI) to improve credit decisioning and capital allocation across consumer finance. The platform connects lenders and institutional investors to expand access to financial products while targeting better risk-adjusted outcomes for capital providers. 

PGY is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.

Additionally, the company could be a top pick for growth investors. PGY has a Growth Style Score of A, forecasting year-over-year earnings growth of 12.4% for the current fiscal year.

One analyst revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.49 to $3.72 per share. PGY boasts an average earnings surprise of +43.5%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, PGY should be on investors' short list.

NEW YORK--(BUSINESS WIRE)--Pagaya Technologies Ltd. (NASDAQ: PGY) (“Pagaya”), a global technology company delivering AI-driven product solutions for the financial ecosystem, today announced a new forward flow agreement with Neuberger Specialty Finance (“NBSF”), the Asset Based Finance arm of Neuberger, for the purchase of up to $700 million of auto loans sourced through Pagaya's network of auto lending partners. This deal marks Pagaya's first forward flow agreement with Neuberger, extending a d.

Key Takeaways Pagaya offers a more favorable blend of valuation, profitability and risk-adjusted growth potential.PGY leads Enova in six-month share gains, trades at a lower P/TB multiple and posts a higher ROE.Enova has stronger growth estimates, but its lending model brings greater credit-loss and funding risks. Pagaya Technologies (PGY - Free Report) and Enova International (ENVA - Free Report) are peers in the technology-enabled lending space, with both relying on data analytics and advanced underwriting tools to expand access to credit. Amid still-high borrowing costs, cautious lending standards and resilient credit demand, the two companies are navigating the same broader lending environment through different business models.

Pagaya mainly provides artificial intelligence (AI)-powered credit technology to banks and fintech partners and connects loans with institutional investors. Enova is more directly involved in lending, providing consumer and small-business credit through its brands.

Thus, PGY offers a more asset-light, partner-driven model, while ENVA has greater direct exposure to loan growth, interest income and credit losses. Now, the question arises: which of these technology-driven lending stocks offers the stronger investment opportunity against the current backdrop?

The Case for PGYPagaya has built an adaptable, capital-efficient business model that has evolved beyond its initial focus on personal loans. The company has expanded into auto lending and point-of-sale (POS) financing, broadening its addressable market while reducing the reliance on any single loan category. This diversification helps strengthen the platform’s resilience across different economic and credit cycles.

The company has also developed a diversified funding ecosystem, with more than 170 institutional partners and a growing reliance on forward flow agreements. Under these arrangements, investors commit to purchasing loans in advance, providing Pagaya with greater funding visibility and stability, particularly during periods of market volatility. Its funding strategy is further supported by strategic asset-backed securities (ABS) issuance.

Pagaya’s limited on-balance-sheet exposure is another key advantage. Loans are generally transferred quickly to ABS vehicles or institutional investors through forward flow arrangements, with capital secured ahead of origination. This structure helps limit credit and market risk, reduces the need for loan write-downs, and allows the company to maintain flexibility even in challenging market conditions.

Technology remains another important differentiator. Pagaya’s proprietary platform, including its pre-screen solution, enables lenders to offer pre-approved credit opportunities to existing customers without requiring a formal application. This allows partner institutions to expand credit access and deepen customer relationships while potentially reducing customer-acquisition and marketing costs.

Improving operating leverage and cost discipline have increasingly supported Pagaya’s earnings growth of late. In the first half of 2026, total revenues rose to $705 million from $616.4 million a year earlier, while operating expenses increased modestly to $519.2 million from $512.2 million. This widening gap between revenue and expense growth highlights the scalability of its model. Building on this momentum, management expects 2026 GAAP net income of $155-$180 million and adjusted EBITDA of $460-$490 million, signaling confidence in continued growth without a proportionate increase in costs.

The Case for ENVAEnova operates a diversified digital lending platform spanning consumer and small-business finance. Its proprietary analytics, machine-learning models and online infrastructure enable the company to rapidly adjust approval rates, pricing and credit exposure as economic conditions change. CashNetUSA and NetCredit serve consumers, while OnDeck and Headway Capital target small businesses.

The company’s lending platform continued to expand across its core categories in the first half of 2026. Second-quarter originations rose 27% year over year to $2.3 billion, marking the 11th consecutive quarter of at least 20% growth. Small business originations increased 29%, supported by Enova’s established brand presence, scale and diversification across industries and geographies. Consumer originations advanced 23% as demand strengthened, particularly for lines of credit and the company captured new customers without changing its risk appetite or unit-economics requirements.

Looking ahead, origination growth is likely to be aided by continued demand from underserved consumers and small businesses, repeat borrowing from newly acquired customers, broader product adoption and further scaling of the existing platform. Management expects 2026 originations to grow 20% from that reported in 2025.

Second-quarter 2026 revenues increased 22% year over year to $929 million, while combined loans and finance receivables reached a record $5.5 billion. Adjusted EPS climbed 33%, marking the eighth consecutive quarter of at least 30% year-over-year adjusted EPS growth. Credit performance also remained healthy, with the consolidated net charge-off ratio improving to 7.3%.

Small-business lending remains Enova’s primary growth engine. The segment accounted for 69% of its portfolio as of June 30, 2026. Enova is also expanding funding capacity, with its OnDeck unit proposing a roughly $500-million small-business loan ABS transaction in September 2026, underscoring its ability to tap securitization markets as the portfolio expands.

PGY & ENVA: Price Performance, Valuation & Other ComparisonsIn the past six months, shares of Pagaya have gained 95.5%, whereas the ENVA stock has rallied 69.1%. Hence, in terms of investor sentiment, PGY has the edge.

6-Month Price Performance
Image Source: Zacks Investment Research

From a valuation perspective, Pagaya is currently trading at a trailing 12-month price-to-tangible book (P/TB) of 3.37X, while Enova is trading at a trailing 12-month P/TB of 4.90X. In terms of valuation, PGY is less expensive compared with Enova.

P/TB TTM
Image Source: Zacks Investment Research

Pagaya’s return on equity (ROE) of 58.14% is above ENVA’s 28.65%. This reflects that PGY is more efficient in using shareholder funds to generate profits.

ROE
Image Source: Zacks Investment Research

Pagaya & Enova’s Earnings & Sales ProspectsThe Zacks Consensus Estimate for PGY’s 2026 and 2027 revenues indicates year-over-year growth of 13% and 15%, respectively.

The consensus estimate for PGY’s earnings indicates 12.4% and 11% year-over-year growth for 2026 and 2027, respectively.

Earnings Growth Estimate
Image Source: Zacks Investment Research

On the contrary, the Zacks Consensus Estimate for Enova’s 2026 and 2027 revenues implies year-over-year increases of 22.4% and 19%, respectively.

Also, the consensus estimate for Enova’s earnings indicates 34% growth for 2026 and a 29.5% rise for 2027.

Earnings Growth Estimate
Image Source: Zacks Investment Research

PGY or ENVA: Which Stock Offers Better Upside Potential?Pagaya’s asset-light model, diversified funding base, limited balance-sheet credit exposure and improving operating leverage provide a favorable combination of growth and risk control. PGY holds an edge over ENVA in recent share-price performance, valuation and ROE, while its AI-driven platform continues to expand across lending categories.

Enova also presents a compelling growth story, backed by strong loan originations, resilient credit trends and rapid expansion in small-business lending. Its consensus revenue and earnings growth expectations are notably stronger than Pagaya’s.

However, ENVA’s more balance-sheet-intensive lending model brings greater exposure to credit losses and funding risks, while its higher valuation and lower ROE relative to PGY temper the upside case. Thus, while both stocks remain attractive, Pagaya has a more favorable blend of valuation, profitability and risk-adjusted growth potential.

Currently, PGY sports a Zacks Rank #1 (Strong Buy), whereas Enova has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Here are three stocks with buy rank and strong value characteristics for investors to consider today, September 10th:  

Prog Holdings (PRG - Free Report) : This company, which is a provider of lease-purchase solutions through e-commerce merchants, carries a Zacks Rank #1 (Strong Buy), and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 5.3% over the last 60 days.

Prog Holdings has a price-to-earnings ratio (P/E) of 7.57 compared with 11.20 for the industry. The company possesses a Value Score of A.

Eni (E - Free Report) : This integrated energy company, carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 18.5% over the last 60 days.

Eni has a price-to-earnings ratio (P/E) of 9.30 compared with 10 for the industry. The company possesses a Value Score of A.

Pagaya Technologies Ltd. (PGY - Free Report) : This company, which applies proprietary artificial intelligence (AI) to improve credit decisioning and capital allocation across consumer finance, carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 15.2% over the last 60 days.

Pagaya Technologies’ has a price-to-earnings ratio (P/E) of 5.81 compared with 6.10 for the industry. The company possesses a Value Score of B.

See the full list of top ranked stocks here.

Learn more about the Value score and how it is calculated here.

da-kuk/E+ via Getty Images

Software’s Second Act: AI Shifts From Threat to Catalyst In my opinion, software stocks are resurfacing after a difficult 2026 because investors may have become too pessimistic about AI’s disruptive impact. I have seen concerns that generative AI could undermine traditional SaaS models, reduce per-seat pricing, and make customized software dramatically cheaper to build. Those fears drove significant multiple compression, particularly among small-cap software stocks.

More recently, I have seen encouraging evidence that AI may be an accelerant rather than an existential threat. I was very impressed with the earnings results from Snowflake (SNOW) and the possibility that the positive trend will impact other software stocks. Snowflake reported product revenue growth of 37% YoY, while remaining performance obligations increased 30%. Management also raised its full-year outlook and indicated that AI products contributed meaningfully to its recent growth acceleration. ServiceNow (NOW) has similarly reported strong adoption of AI-enabled products.

In my view, this creates an attractive setup for smaller software companies. If earnings continue to validate AI monetization, the AI trade could broaden from companies building the infrastructure to software companies monetizing it.

Small-Cap Tech Stocks Quietly Outperform Big Tech Despite AI concentration concerns and shifting interest rate expectations, the stock market has remained resilient as investor confidence improves. In the latest AAII Sentiment Survey, bulls retook the lead, with expectations stock prices will rise in the next six months up 6.8 percentage points. According to its August Asset Allocation Survey, equities reached 71.1% of investor portfolios, the highest level since late last year.

Bullish Investor Sentiment Regains The Upper Hand (Week Ending 9/2/2026)

Bloomberg

Tech stocks in particular have been able to endure volatility in the past month to post positive returns, lifted by blowout earnings from software giants like Salesforce (CRM) and Palantir (PLTR) and rising sector earnings expectations.

However, investors suffering from AI mega-cap exhaustion could consider select small-cap tech stocks whose earnings are not directly dependent on the hyperscaler capex cycle. In addition, these same stocks offer growth potential and stand to benefit from AI and tech-driven secular demand trends.

Although momentum has recently slowed, small-cap tech stocks have outperformed larger peers in the past year, and are trading at more attractive valuations. After gaining more than 60% in the past twelve months, Invesco’s small-cap technology ETF (PSCT) is trading at 18.3x forward earnings, a 29% discount to the S&P 500 Technology Sector (XLK), which has a forward P/E of 25.9x.

Seeking Alpha

Although small caps can offer significant upside potential, investors should assess their risk tolerance. Due to high volatility and risk, small caps are not for everyone. When any investment research firm issues a small-cap recommendation, for example, the stock can surge quickly due to low liquidity. This makes it even more crucial to ensure small-cap tech stocks have strong fundamentals, and Seeking Alpha’s quantitative tools can help investors achieve this objective.

How I Chose Top Small-Cap Tech Stocks Using Seeking Alpha’s Stock Screener, I filtered for small-cap tech stocks with Strong Buy Quant Ratings and solid Growth and Revision Factor Grades. I then narrowed the list by filtering for stocks with forward EPS growth rates above 30%. My small-cap tech basket includes two AI software names and a cloud communications company, showcasing accelerating momentum and bullish revisions, while trading at attractive earnings multiples. Moreover, their underlying businesses have little direct dependence on the hyperscaler capex cycle that has fueled the AI infrastructure boom.

1. Sprout Social, Inc. (SPT) Market Capitalization: $688.93M

Quant Rating: Strong Buy

Sector: Information Technology

Industry: Application Software

Quant Sector Ranking (as of 9/4/2026): 31 out of 530

Quant Industry Ranking (as of 9/4/2026): 5 out of 166

A provider of social media management software, Sprout Social’s revenue has continued to climb as the company expands the capabilities of its agentic AI offerings and business intelligence solutions. Sprout’s revenue grew by a CAGR of 25% over the past five years, and is projected to reach $494.61M in FY 2026. Exceptional price performance and earnings revisions helped drive the stock’s quant rating into Strong Buy territory in August.

Seeking Alpha

Broadening adoption among higher-value customers and increased renewal rates helped lift Sprout’s Q2 2026 revenue by 11% YoY. The number of customers generating at least $50K in ARR grew 16% YoY to 2,127, while customers with ARR above $30K now account for 60.1% of total subscription revenue. Total remaining performance obligations (RPO) surged 16% YoY, and multi-year deals now represent about half of Sprout’s contract mix.

Sprout Social Investor Presentation

Sprout raised its Q4 exit operating margin from 15% to 17%, citing a headcount reduction that is expected to yield $50M in annualized cost savings. The results contributed to an improving outlook, backed by 9 upward earnings revisions to no downward revisions in the last 90 days. Forward EPS growth of 45.49% underpins a solid factor grade, alongside surging operating cash flow.

Seeking Alpha

Trading at only 10x earnings vs. the sector’s 22x, Sprout continues to look attractively priced, in my opinion, even with the recent momentum, supporting an A+ Valuation Grade. Meanwhile, forward PEG - a crucial valuation metric that combines P/E and growth - sits at a whopping 71% discount to the sector. Long-term earnings visibility and an attractive valuation make Sprout a strong AI-fueled small cap to consider.

2. Pagaya Technologies Ltd. (PGY) Market Capitalization: $1.91B

Quant Rating: Strong Buy

Sector: Information Technology

Industry: Application Software

Quant Sector Ranking (as of 9/4/2026): 16 out of 530

Quant Industry Ranking (as of 9/4/2026): 1 out of 166

The top quant-rated Application Software stock, Pagaya offers AI-powered products to help lenders and institutional partners make better loan decisions. PGY soared after a huge Q2 earnings beat, and is now up more than 40% in the past three months for an outstanding Momentum Grade.

As the chart below illustrates, the stock’s accelerating price performance and bullish EPS revisions led to a dramatic turnaround in its Quant Rating over the past six months.

Seeking Alpha

The company achieved record network volume of $3.5B in Q2 2026, up 33% YoY. The network expansion helped drive revenue up by 19% to $387M, while adjusted EBITDA jumped 43%, demonstrating strong operating leverage as the business scales.

Pagaya Investor Presentation

Based on record EPS and strong visibility on the remainder of 2026, PGY raised full-year net income guidance by 25%. Anchored in a forward EPS growth rate of 70.94%, PGY showcases an A+ Growth Grade. PGY’s long-term EPS growth rate (3-5Y CAGR) of 139% is especially impressive when compared to the sector median of 19%.

The long-term EPS growth rate is a key element in the stock’s attractive valuation framework, with forward PEG at a 96% discount to the sector. PGY is also trading at a significant sector discount based on a forward P/E ratio of 6x, in addition to attractive EV/EBITDA, price/sales, and price/cash flow multiples.

Seeking Alpha

While I strongly believe PGY offers solid potential upside, investors should also weigh its elevated risk profile. PGY’s 24M beta of 2.52 indicates the stock has been substantially more volatile than the broader market. PGY also carries a short interest of 15.87%. However, when you consider the AI fintech’s strong fundamentals, exceptional growth, and attractive valuation, the reward could outweigh the risk.

3. Ooma, Inc. (OOMA) Market Capitalization: $642.36M

Quant Rating: Strong Buy

Sector: Information Technology

Industry: Application Software

Quant Sector Ranking (as of 9/4/2026): 21 out of 530

Quant Industry Ranking (as of 9/4/2026): 3 out of 166

A provider of cloud-based communication technologies, including telephony, messaging, and video solutions, OOMA has crushed the Russell 2000 in the past year, driving an A+ Momentum Grade. The company is targeting a fast-growing Unified Communications as a Service (UCaaS) and equipment market, which OOMA projects could reach $34.4B by 2029.

OOMA vs. Russell 2000 (IWM): 1Y Price Return

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Rapid growth in core business subscription and services drove Q2 FY27 revenue up by 25% YoY to $83.2 million, while EBITDA jumped by 74%. OOMA management said it expects profitable growth to continue as it expands AirDial, its analog phone line replacement solution, and integrates the FluentStream and Phone.com acquisitions. The Q2 surge in EBITDA has contributed to a solid Growth Grade, underpinned by a forward EPS growth rate of 32.02%.

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Showcasing strong earnings visibility over the next three years, OOMA’s EPS and revenue outlook have increasingly improved. OOMA has seen a string of bullish EPS revisions from sell-side analysts in the past three months for a top-notch factor grade.

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Despite incredible price performance, the stock’s forward PEG represents a 41% discount to the sector, although elevated GAAP P/E metrics have weighed on the valuation grade. OOMA wraps up my small-cap tech picks, a basket of stocks showcasing strong forward earnings growth, solid EPS revisions, and accelerating momentum.

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Beyond Mega Tech: Top Small Caps With Big Earnings Growth Despite volatility fueled by concerns over an AI bubble, and shifting interest rate expectations, the market has proven resilient amid improving investor sentiment. Tech stocks have remained steady, driven by huge earnings beats by leading software companies and growing EPS targets. However, high concentration around large AI stocks has remained a top risk among fund managers, and investors may be seeking growth outside mega caps. Select small-cap tech stocks can offer similar earnings growth upside through businesses not directly tied to the hyperscaler capex cycle. In this article, I recommended three Strong Buy small-cap tech stocks offering exposure to AI and communications technology tailwinds. The three stocks showcase robust forward earnings growth, solid momentum, and bullish earnings revisions.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given that any particular security, portfolio, transaction or investment strategy is suitable for any specific person. The author is not advising you personally concerning the nature, potential, value or suitability of any particular security or other matter. You alone are solely responsible for determining whether any investment, security or strategy, or any product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. Steven Cress is the Head of Quantitative Strategy at Seeking Alpha. Any views or opinions expressed herein may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank.

Shares of Pagaya Technologies Ltd. (PGY - Free Report) have gained 34% over the past four weeks to close the last trading session at $22.26, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $29.13 indicates a potential upside of 30.9%.

The average comprises 12 short-term price targets ranging from a low of $23.00 to a high of $36.00, with a standard deviation of $4.77. While the lowest estimate indicates an increase of 3.3% from the current price level, the most optimistic estimate points to a 61.7% upside. More than the range, one should note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.

While the consensus price target is highly sought after by investors, the ability and unbiasedness of analysts in setting price targets have long been questionable. And investors making investment decisions solely based on this tool would arguably do themselves a disservice.

But, for PGY, an impressive average price target is not the only indicator of a potential upside. Strong agreement among analysts about the company's ability to report better earnings than they predicted earlier strengthens this view. While a positive trend in earnings estimate revisions doesn't gauge how much a stock could gain, it has proven to be powerful in predicting an upside.

Price, Consensus and EPS Surprise

Here's What You May Not Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.

While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?

They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.

However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.

That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.

Why PGY Could Witness a Solid UpsideThere has been increasing optimism among analysts lately about the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher. And that could be a legitimate reason to expect an upside in the stock. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Over the last 30 days, the Zacks Consensus Estimate for the current year has increased 16.4%, as one estimate has moved higher compared to no negative revision.

Moreover, PGY currently has a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Therefore, while the consensus price target may not be a reliable indicator of how much PGY could gain, the direction of price movement it implies does appear to be a good guide.

Key Takeaways Pagaya's 1H26 network volume rose 22% y/y to a record $6.16B, lifting total revenues 14.4%.Auto volumes surged about 140% in Q2, supported by nearly 30,000 dealerships and better decisioning tools.Pagaya expects 2026 network volume of $12.5-$13.25B, signaling continued 2H26 momentum. Pagaya Technologies Ltd.’s (PGY - Free Report) network volume, a key driver of its top line, has maintained strong momentum in the first half of 2026. Supported by strength in its Auto and Personal Loan businesses, along with a focus on prudent underwriting, PGY’s network volume increased 22% year over year to a record $6.16 billion in the first six months of this year. Fee revenue less production costs (FRLPC) rose 10.9% to $268.4 million while total revenues and other income increased 14.4% to $705 million, underscoring the positive impact of higher transaction volumes on Pagaya’s revenue base.

Auto has become a key growth driver for Pagaya. In the second quarter of this year, Auto volumes surged about 140% year over year, reaching a $4.8-billion annualized run rate. The company’s connections with nearly 30,000 dealerships, along with better pricing and decisioning tools, are helping lending partners make more competitive offers and improve conversion rates. Higher conversions, in turn, encourage dealers to send more applications through Pagaya’s network, supporting further volume growth.

Beyond Auto, Pagaya’s product-led strategy is broadening the sources of network volume. Its Affiliate Optimizer Engine generated more than $1 billion in second-quarter volume, while Direct Marketing Engine programs are expected to reach $500 million by the year-end. The company is also expanding in point-of-sale (POS) financing and adding new lending partners, which should further broaden its volume base.

Strong access to capital markets is another positive. Pagaya raised a record $3.7 billion through six asset-backed securities (ABS) transactions in the second quarter, while its institutional investor base grew to 174 investors. This funding support, combined with disciplined underwriting and stable credit performance, should help the company handle higher transaction volumes without materially relaxing credit standards.

Looking ahead, FRLPC growth may remain somewhat tempered in the near term by the mix of newer partners and products. Nonetheless, continued expansion in Auto, a healthy partner onboarding pipeline and strong funding availability should keep network volume on an upward trajectory and support top-line growth. Pagaya expects third-quarter 2026 network volume of $3.43-$3.63 billion and full-year volume of $12.5-$13.25 billion, pointing to continued momentum in the second half. Third-quarter and full-year total revenues and other income are projected at $370-$390 million and $1.43-$1.53 billion, respectively.

Comparing PGY’s Business Model With PeersLike PGY, Upstart Holdings, Inc. (UPST - Free Report) is an AI-based lending platform that aspires to become capital-light but often holds loans on its balance sheet temporarily. Its core business model involves finding financing for loans after its network of bank and institutional partners originates them.

Upstart partner banks can finance the loan by keeping it on their balance sheet. The bank can sell the whole loan on Upstart’s platform or use forward flow agreements from institutions that commit to buying a specific volume or type of loan originated on the Upstart platform in the future.

Upstart also uses securitization, wherein pools of loans are bundled together and sold as ABS to institutional investors. However, the firm frequently reverts to a balance-sheet-heavy model, especially in tight liquidity markets, making it more volatile and exposed to macro cycles.

Another close competitor of PGY is LendingTree (TREE - Free Report) . But unlike PGY, LendingTree is a marketplace platform, not a lender. It matches consumers with financial product providers like mortgages, personal loans, credit cards and insurance.

LendingTree does not underwrite, originate or hold loans. Hence, its balance sheet is not credit-heavy. TREE’s balance sheet is detached from revenue generation. The company is primarily structured to support a fee-based digital marketplace, not balance sheet lending.

PGY’s Price Performance, Valuation & Estimate AnalysisInvestors have been bullish on the PGY stock, which has appreciated 70.9% in the past six months against the industry’s 0.5% decline.

Image Source: Zacks Investment Research

Pagaya stock is currently trading at a 12-month forward price-to-sales (P/S) of 1.05X, which is below the industry average of 2.58X over the last three years.

Image Source: Zacks Investment Research

Over the past 30 days, the Zacks Consensus Estimate for PGY’s 2026 and 2027 earnings has moved higher to $3.72 and $4.13, respectively. The consensus estimates indicate 12.4% and 11% year-over-year growth for 2026 and 2027, respectively.

Image Source: Zacks Investment Research

Currently, Pagaya sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of PGY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Pagaya Technologies Ltd. (PGY - Free Report) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, PGY's 50-day simple moving average broke out above its 200-day moving average; this is known as a "golden cross."

A golden cross is a technical chart pattern that can signify a potential bullish breakout. It's formed from a crossover involving a security's short-term moving average breaking above a longer-term moving average, with the most common moving averages being the 50-day and the 200-day, since bigger time periods tend to form stronger breakouts.

Golden crosses have three key stages that investors look out for. It starts with a downtrend in a stock's price that eventually bottoms out, followed by the stock's shorter moving average crossing over its longer moving average and triggering a trend reversal. The final stage is when a stock continues the upward climb to higher prices.

A golden cross is the opposite of a death cross, another technical event that indicates bearish price movement may be on the horizon.

PGY has rallied 13.1% over the past four weeks, and the company is a #1 (Strong Buy) on the Zacks Rank at the moment. This combination indicates PGY could be poised for a breakout.

The bullish case only gets stronger once investors take into account PGY's positive earnings outlook for the current quarter. There have been 1 upward revision compared to none lower over the past 60 days, and the Zacks Consensus Estimate has moved up as well.

Given this move in earnings estimates and the positive technical factor, investors may want to keep their eye on PGY for more gains in the near future.

Pagaya trades below its industry P/B average, while rising earnings estimates and growth face funding-cost and execution risks.

Key Takeaways Pagaya posted record Q2 revenues, net income, EBITDA and network volume, led by strong auto growth.Pagaya raised 2026 network volume, revenue, GAAP net income and adjusted EBITDA guidance.Funding expansion supports scaling, while execution, credit performance and FRLPC pressure remain risks. Pagaya Technologies Ltd. (PGY - Free Report) delivered a stronger-than-expected second quarter. Record network volume, revenues and GAAP net income, together with higher full-year guidance, raise the bar for the company’s 2026 performance.

The key event-driven question is whether Pagaya can sustain the operating leverage behind the latest results while managing funding-cost and credit risks.

Pagaya’s Record Q2 Results Set a Higher BarPagaya reported adjusted earnings of $1.07 per share in the second quarter, comfortably above the Zacks Consensus Estimate of 71 cents. GAAP net income attributable to Pagaya reached a record $45.3 million, up from $16.7 million a year earlier.

The beat was not isolated. PGY topped earnings expectations in each of the trailing four quarters, with an average positive surprise of 43.5%.

Earnings Surprise History
Image Source: Zacks Investment Research

Total revenue and other income reached a record $387 million, up 18.6% year over year, and exceeded the Zacks Consensus Estimate of $358.2 million. The company also reported record adjusted EBITDA of $124 million, up 43% year over year.

Network volume reached a record $3.54 billion, increasing 33.5% year over year. Growth was driven by the auto vertical while Pagaya maintained its focus on prudent underwriting. Revenue from fees less production costs, or FRLPC, reached a record $146.9 million, up 16.4% year over year.

The figures show that Pagaya is scaling across its lending network, with auto providing a major source of incremental volume while personal loans and point-of-sale financing remain part of the broader product strategy. The company’s investor presentation also highlighted 33% year-over-year total network-volume growth and 140% auto network-volume growth in the second quarter.

Supported by robust performance and strength in fundamentals, the company’s shares have gained 3.3% year to date, outperforming the industry’s 9.4% decline.

YTD Price Performance
Image Source: Zacks Investment Research

Pagaya’s Funding Growth Supports ScalingPagaya raised a record $3.7 billion of ABS funding across six transactions in the second quarter and added 11 investors. The final three transactions were upsized, and the company also added an Auto Forward Flow agreement. The funding activity points to continued demand for assets across the platform.

A broader funding base can support network-volume growth by giving Pagaya more flexibility across ABS, forward-flow and revolving structures. The company has also been expanding the number of institutional funding partners and diversifying funding channels. That matters because the ability to fund growing network volume is a key part of converting partner and product expansion into revenue.

PGY’s 40% of funding comes through non-prefunded ABS products, alongside forward-flow and revolving structures. Amongst PGY’s key peers, Affirm Holdings, Inc. (AFRM - Free Report) uses technology, proprietary underwriting and third-party capital to support its pay-over-time platform, while Enova International, Inc. (ENVA - Free Report) operates an online lending platform powered by analytics and machine learning. Both AFRM and ENVA provide context for technology-driven consumer finance.

PGY’s Higher Guidance Raises the 2026 StakesManagement now expects full-year 2026 network volume of $12.5-$13.25 billion, compared with the previous $11.45-$13 billion range. Total revenue and other income is projected at $1.425-$1.525 billion, versus the prior $1.4-$1.575 billion outlook.

The company also raised its full-year GAAP net income guidance to $155-$180 million from $110-$160 million and its adjusted EBITDA outlook to $460-$490 million from $420-$460 million. The higher targets reflect greater confidence in volume growth and operating leverage, but they also increase the importance of successful partner ramps and continued expense discipline.

The near-term outlook reinforces that higher expectations are not limited to the second quarter. Management expects third-quarter network volume of $3.425-$3.625 billion, revenue and other income of $370-$390 million, adjusted EBITDA of $120-$130 million and GAAP net income of $42-$52 million.

Supported by management’s higher guidance for key metrics, the Zacks Consensus Estimate for the company’s 2026 and 2027 earnings increased by 15.2% and 11%, respectively over the past 30 days.

Estimate Revision Trend
Image Source: Zacks Investment Research

Pagaya’s Rank and Style Scores Back the MomentumPGY currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Its Zacks Style Scores are a Value Score of B, Growth Score of A, Momentum Score of B and VGM Score of A. The Growth Score supports the company’s improving earnings profile, while the Value and Momentum Scores provide additional context for the stock’s setup.

The Zacks Style Scores are designed to complement the Zacks Rank by evaluating value, growth and momentum characteristics. The Style Score Education material notes that the individual scores measure different investment styles, while the VGM Score combines the weighted average of the three styles. For PGY, those signals support the stronger earnings setup, but they do not remove the execution risks associated with funding costs, credit performance and FRLPC pressure.

The key event-driven takeaway is therefore mixed but constructive. The second-quarter beat and higher guidance provide stronger evidence that Pagaya’s growth and operating-leverage strategy is working. Sustaining that trajectory will depend on continued network-volume expansion, funding availability and disciplined execution as the company moves toward its higher 2026 targets.

Pagaya Technologies Ltd. (PGY - Free Report) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.

The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for Pagaya Technologies Ltd., as there has been strong agreement among the covering analysts in raising estimates.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate RevisionsThe company is expected to earn $0.97 per share for the current quarter, which represents a year-over-year change of -4.9%.

The Zacks Consensus Estimate for Pagaya Technologies Ltd. has increased 11.25% over the last 30 days, as one estimate has gone higher compared to no negative revisions.

Current-Year Estimate RevisionsFor the full year, the earnings estimate of $3.72 per share represents a change of +12.4% from the year-ago number.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for Pagaya Technologies Ltd.. Over the past month, one estimate has moved higher compared to no negative revisions, helping the consensus estimate increase 16.44%.

Favorable Zacks RankThe promising estimate revisions have helped Pagaya Technologies Ltd. earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom LineInvestors have been betting on Pagaya Technologies Ltd. because of its solid estimate revisions, as evident from the stock's 18.3% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.