Pagaya Technologies: An AI-powered fintech that insiders are buying

Pagaya Technologies (NASDAQ:PGY) appeared on Insidertrades.com’s radar for five trades made in early April, marking the first insider activity in several quarters.

Five insiders, including the CEO, the CTO, a director, a president and the newly appointed CDO, Tami Rosen, bought the shares on April 4 and 5. Insiders and large shareholders own about 20% of this technology company; April purchases are worth around 0.3% of the stock and coincide with the market low.

Tami Rosen is a former Apple and Goldman Sachs executive with experience connecting businesses and building teams. He was already an executive at Pagaya, but his new role is to lead the company into its next phase of development by forming strategic partnerships and attracting top talent to help grow the business.

[content-module:CompanyOverview|NASDAQ:PGY]What is Pagaya Technologies? Pagaya Technologies is an AI-focused fintech specializing in lending. Its platform connects lenders with borrowers, providing real-time risk analysis and a win-win scenario. Lenders can build a business while mitigating risks; borrowers can find the necessary loans. The company was founded in 2016 and came to the public market in 2022 via a SPAC (Special Purpose Acquisition Company) merger. The stock has had a mixed performance in the two years since going public, first peaking 200% above its IPO price and then dropping 90% below the price it was wallowing at.

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Analysts limit gains for this undervalued stock

Analyst sentiment is mixed for Pagaya and plays into the stock’s volatility over the past 12 months. Marketbeat tracks six analysts with coverage, enough to warrant broad ownership, and they rate the stock a Moderate Buy. The Moderate Buy rating is up from last year and is stable through late 2023, but the price target is down.

The consensus target calls for over 300% upside for the market, but it is down 30% year over year and is being pushed lower by revisions. The latest revisions come from JMP Securities and Wedbush, which set a new low target for the group. Wedbush’s new target is $11.50, which still implies a value for investors that is 35% higher than the current stock. The bottom line for investors is that this market has some upside, but it is limited, and that a significant or sustained rebound is unlikely without a change in outlook.

Forecasts for the first quarter and 2024 were lukewarm. The company guided the first quarter and year towards a consensus range at or near the midpoint. The negative factor is that guidance calls for weakness in the second half of the year, and full-year results will be below consensus at the midpoint. Growth is also slowing from double digits to single digits, which may be optimistic given economic conditions. Interest rates are persistently high and credit conditions are tightening, so underperformance and/or a decrease in guidance should be expected in the first quarter report.

Short sellers remove clout from the PGY market

The short interest in PGY stock never became overwhelming, but it peaked at 6% and was close. However, the latest data shows that short interest is falling significantly from the highs, eliminating a drag on the market, to around 2.5%. Assuming this trend continues, the stock could soon rise; the question is how high it will go before it reaches the maximum.

Pagaya Technologies stock price may be at its lowest. The latest sell-off has hit a new low, but indicators diverge and show the price is significantly oversold. These conditions should produce a rebound, but no sustained reversal or rally is guaranteed. At best, investors could expect a relief rally that takes it down to the $12 range, a gain of around 35%. A move above that level could be bullish, but this tech stock still faces significant resistance around $14.50.

Companies in this article:

Agency	Current price	Price change	Dividend yield	P/E ratio	Consensus assessment	Consensus price target
Pagaya Technologies (PGY)	$9.41	+1.8%	N/A	-4.35	Moderate purchase	$38.08