Pagaya: The Growth Narrative Is Getting Harder To Ignore

Summary Pagaya Technologies is rated Strong Buy due to rapid profit growth outpacing revenue and an attractive 5x 2027 forward P/E valuation. Q2 results highlight 19% revenue growth, 43% adjusted EBITDA growth, and 172% GAAP net profit growth, with core costs nearly flat. Auto lending is the primary growth engine, with 140% YoY Auto Network Volume growth and significant runway via new bank partnerships and product expansion. Credit risk and funding dependency justify a valuation discount, but current risk/reward at $21 is compelling given strong operating leverage and catalysts. J Studios/DigitalVision via Getty Images Pagaya Technologies ( PGY ) is growing rapidly but the most important thing is that profit is now growing much faster than revenue. In Q2 , Network Volume rose by 33% to $3.5 billion. Revenue came in at $387 This article was written by Investor Overview 3.09K Followers Follow I'm a passionate investor from the Netherlands with 12 years of stock market experience. My articles usually contain a good overview of important investment criteria. A stock for my portfolio is of interest to me if the company has the following characteristics:1. Companies that are growing in both revenue, earnings and free cash flow.2. Companies that have excellent growth prospects.3. Stocks with favorable valuations.I prefer steadily growing companies with high free cash flow margins, dividend stocks and stocks with generous share repurchase programs.Disclaimer: My articles do not provide financial advice, they reflect my own findings and insights. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in PGY over 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.