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Exclusive Story
This AI Lender Has Big Upside Potential—And Big RisksReported by Peter Frank. Date Posted: 4/19/2026. 
Key Points
- Pagaya connects lenders and investors using AI to expand credit access without holding loans on its balance sheet.
- The company reached profitability in 2025, marking a major shift after years of losses.
- Analysts see around 133% upside, but the stock remains highly volatile and sensitive to credit markets.
- Special Report: Elon Musk already made me a “wealthy man”
When a company blends fintech, artificial intelligence (AI), consumer lending, and asset-backed securities (ABS), investors should expect volatility — and Pagaya Technologies (NASDAQ: PGY) has delivered exactly that. Last year, the company — which maintains dual headquarters in New York and Tel Aviv — posted its first annual profit since going public in June 2022. Revenue grew 26%, prompting analysts to point to more than 100% upside from current prices. Yet the stock has fallen roughly two-thirds since September and about 30% so far this year.
Liberation Day wiped over $2 trillion from markets in a single day. Then a 90-day tariff pause added $4 trillion back to the S&P 500. Trump's AI initiatives sent Palantir up over 140%. Trader Larry Benedict says all of that was just the warm-up.
Benedict is calling what comes next 'Project 2026' - a move he believes could send billions, potentially trillions, into overlooked corners of the market. He's identified one ticker sitting at the center of it all, and he's revealing the name today at no cost. Larry is calling it "Project 2026."
The plunge in share price isn’t necessarily a sign of a broken business. It is almost expected for a high-risk, high-reward fintech operating in an uncertain market. For investors willing to ride the volatility, the gap between the current share price and analysts' targets is hard to ignore. How Pagaya’s AI-Driven Model WorksPagaya is not a traditional bank or lender. It operates an AI-powered network that sits between originators and the institutional investors who buy packaged consumer loans as ABS. When a borrower applies for a personal loan, auto financing, or a point-of-sale loan through one of Pagaya’s partners and isn’t approved by the lender, Pagaya’s AI evaluates the application. If accepted, the loan is routed into a securitization that Pagaya structures and sells to investors. Rather than holding the credit risk, Pagaya earns a fee on each loan it moves along. Since its founding, the platform has evaluated more than $3.5 trillion in loan applications and sold over $34 billion in personal loan ABS. Financial Performance Shows a Turning PointFounded in 2016, Pagaya pursued rapid growth while wrestling with profitability. That changed last year: the company swung from a $401 million loss in 2024 to an $81 million profit in 2025. Adjusted EBITDA rose 76% to $371 million. Revenue increased 26% to $1.3 billion, and network volume — the total loans flowing through the platform — grew 9% to $10.5 billion. Both were aided by Pagaya’s expansion of originations in auto and point-of-sale loans beyond its previous emphasis on personal loans. Q4 2025 was particularly strong: fourth-quarter revenue and other income rose 20% year-over-year to $335 million. GAAP net income of $34 million was a quarterly record and at the high end of Pagaya’s guidance. Earnings per share came in at $0.80, above analysts' forecasts of $0.75. For 2026, management expects network volume to increase from $11.25 billion to $13 billion. Revenue is forecast between $1.4 billion and $1.575 billion, implying another year of solid growth, and GAAP net income is projected at $100 million to $150 million. Pagaya’s Stock Volatility Tells a Fintech StoryThe company’s stock history mirrors that of many fintech peers. After an initial pop at its 2022 IPO, shares plunged, prompting a 1-for-12 reverse stock split in 2024 to help boost the trading price. In 2025, shares rebounded, climbing roughly fourfold through September to a 52-week high near $45. This year, however, the stock has lost roughly one-third since January and more than 45% from a recent high. Despite the swings, most analysts remain bullish: of 12 issuing ratings, 10 rate the stock Buy and two rate it Hold. The consensus is a Moderate Buy with an average target of $33.11 — roughly 130% above current levels. Risks Center on Credit Markets and CompetitionSkepticism is understandable. Pagaya’s model depends on institutional demand for its ABS and on lending partners routing applications through its network. A disruption in credit markets or a spike in consumer loan defaults could significantly reduce both channels. So far this year, the capital markets side has remained healthy. In April, Pagaya closed an $800 million consumer loan ABS sale and completed its first auto ABS offering of the year. The consumer loan deal was increased by 33% due to strong institutional demand, the company said. Because equity-based compensation is substantial, insider selling after the 2025 run-up appears in SEC filings. Pagaya doesn't pay a dividend, so investors are effectively betting on future growth. Competition from banks developing in-house AI credit models and from rival platforms could also pressure results. A High-Risk Bet With Meaningful Upside PotentialPagaya is not for conservative investors. Volatility is likely to continue, and a down credit cycle with pullback across the financial sector could materially hurt performance. For investors with a higher risk tolerance who believe AI-driven consumer lending is a long-term growth trend, Pagaya’s first-year profitability, upbeat 2026 guidance, active ABS issuance, and a stock trading well below analyst targets make it worth consideration. The company appears to have turned a corner. Whether the stock follows remains to be seen. |
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