JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Tuesday, Citizens JMP maintained a strong stance on Pagaya Technologies (NASDAQ:PGY), with analyst David Scharf reaffirming a Market Outperform rating and a $26.00 price target for the company’s stock. The stock, currently trading at $12.44, has shown strong momentum with a 9.6% gain in the past week. According to InvestingPro data, the company appears undervalued based on its Fair Value analysis. This confirmation comes in the wake of recent shifts in the buy now, pay later (BNPL) sector, particularly relating to the partnership changes at retail giant Walmart (NYSE:WMT).
Scharf highlighted that Pagaya has notably benefited from the recent news that Klarna will replace Affirm Holdings (NASDAQ:AFRM) as the provider of point-of-sale installment loans for Walmart’s OnePay digital wallet offering. The analyst pointed out that while the industry buzz has mainly been about the competitive landscape in the U.S. BNPL market, Pagaya has clearly come out ahead due to this change. The company’s strong position is reflected in its impressive 27.12% revenue growth over the last twelve months, with total revenue reaching $1.03 billion.
Pagaya, which acts as the white-labeled underwriter for Klarna’s three-month and longer installment loans, is expected to experience a significant boost from the Walmart deal. Moreover, the company is poised to gain from Klarna’s increased focus on extending longer-duration loan products within the U.S. market.
The reaffirmed $26 price target set by Citizens JMP is based on a multiple of 8 times Pagaya’s projected EBITDA for the year 2026. This valuation reflects the firm’s confidence in Pagaya’s growth trajectory and potential in the evolving financial technology landscape. InvestingPro subscribers have access to 8 additional ProTips and comprehensive financial analysis, including detailed growth metrics and valuation models. Get the full picture with InvestingPro’s exclusive Research Report, available for over 1,400 US stocks.
Scharf’s analysis underscores the strategic importance of the partnership with Klarna for Pagaya, suggesting a positive outlook for the company’s expansion and financial performance in the coming years. As the BNPL industry continues to evolve, Pagaya’s role as a key player is further solidified by its association with major retail players like Walmart.
In other recent news, Pagaya Technologies has reported significant developments in its financial and strategic outlook. The company’s fourth-quarter earnings surpassed expectations, with Pagaya achieving a 4.5% margin for fee revenue less production costs, aligning with the higher end of its projections for 2024. Additionally, Pagaya’s first-quarter and full-year 2025 guidance exceeded anticipated figures, despite a $229 million credit-related impairment charge for its 2021-2023 vintages. Analysts at Oppenheimer have raised the price target for Pagaya to $16, maintaining an Outperform rating, while JMP Securities increased their target to $26, citing strong unit economics and a disciplined growth strategy.
Benchmark analysts also raised their price target to $25, maintaining a Buy rating, reflecting confidence in Pagaya’s strategic direction and financial performance. The company has reached a milestone by achieving self-funded growth in the fourth quarter of 2024, highlighting its financial independence and operational strength. Pagaya has updated its investor FAQs on its website, emphasizing its commitment to transparency and clear communication with its investor community. The company continues to expand its partnerships across various verticals, focusing on maintaining rigorous credit standards. These developments indicate a positive trajectory for Pagaya Technologies, as it navigates the competitive financial technology landscape with strategic initiatives.
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