A little-known AI fintech stock can more than double, says Canaccord
by James · February 16, 2023
It’s time to buy AI-powered fintech stock Pagaya Technologies based on its path to growth, according to Canaccord Genuity. Analyst Joseph Vafi upgraded shares of the Israel-based technology company to buy from hold and doubled his price target, saying Pagaya is “proving its mettle” despite economic uncertainty. “The macro is far from perfect and may even deteriorate,” Vafi wrote to clients in a note on Wednesday. “The silver lining here, at least for Pagaya, is that the current environment gives the company a real opportunity to showcase both the robustness of its value proposition and its ability to adjust its business model in near real-time based on economic conditions.” Pagaya Technologies’ shares have taken a beating since the company went public through a specialist buyout company, EJF Acquisition. Last year, Pagaya shares plunged 87%, while the S&P 500 fell 19%, according to FactSet data. In 2023, shares are up about 4% versus the S&P 500’s more than 7% gain. In any case, Vafi expects that it is time for the share to see some upside. Canaccord’s price target of $3, up from $1.50, suggests shares could more than double from Wednesday’s close of $1.35. The fintech stock is actually down 4% in Thursday trading. The analyst noted that specific lending partners are now behind a “substantial” portion of the loan assignment through Pagaya AI. This shows that the business is both robust and growing, with total network application volume growing by 98% by 2022, according to the note. PGY 6M mountain Pagaya shares in the last 6 months. “We believe Pagaya is performing well against what we see as its most strategic priorities right now, which is achieving sustainable, profitable market share in a very large TAM, versus just prioritizing revenue growth,” Vafi wrote. “The company also had over $300 million in balance sheet cash as of 2022. Over time, the macro should improve, and if Pagaya remains on its current sound path to growth during this time of uncertainty, PGY shares should be quite well positioned for outsized price appreciation,” the analyst added. The upgrade follows Pagaya Technologies’ results for the fourth quarter on Wednesday. The firm reported a narrower-than-expected loss and topped four analysts’ revenue expectations, according to StreetAccount. — CNBC’s Michael Bloom contributed to this report.
