Bullish indicating open at $55-$60, IPO prices at $37
In November 2024, InvestingPro’s Fair Value models identified a significant mispricing in Pagaya Technologies Ltd. (NASDAQ:PGY), an AI-powered fintech company. The subsequent 58% return validates the effectiveness of our proprietary Fair Value analysis in identifying undervalued opportunities. For investors seeking similar opportunities, our Most undervalued list continues to highlight potentially undervalued stocks across global markets.
Pagaya Technologies leverages artificial intelligence to power credit decisioning for financial institutions. When InvestingPro’s models flagged PGY as undervalued at $9.47, the company was showing promising fundamentals with $970.9 million in revenue, despite trading well below its intrinsic value. The stock had experienced significant volatility in the preceding months, creating an attractive entry point for investors following our analysis.
The investment thesis proved accurate as PGY shares climbed steadily, reaching $14.30 by May 2025. This 58% return significantly exceeded the initially estimated upside of 43.6%. During this period, Pagaya’s fundamentals strengthened considerably, with revenue growing to $1.08 billion and EBITDA more than doubling to $141.1 million. The company achieved profitability ahead of schedule, validating our initial assessment of its potential.
Recent developments have further supported our Fair Value analysis. Multiple analyst upgrades followed strong quarterly results, with firms including JMP Securities and Canaccord Genuity setting price targets above $25. The company’s successful expansion of its AI-driven lending platform and strategic partnerships with major retailers have demonstrated the robust business model we identified in our initial analysis.
InvestingPro’s Fair Value methodology combines multiple valuation approaches, including discounted cash flow analysis, comparable company metrics, and market sentiment indicators. This comprehensive approach helped identify Pagaya’s undervaluation despite market volatility, providing investors with a clear signal of the stock’s potential.
The success of this Fair Value analysis exemplifies the power of InvestingPro’s data-driven approach to identifying market opportunities. Learn more about InvestingPro to access our Fair Value models, real-time alerts, and comprehensive financial analysis tools that can help you identify the next potential market winner before the broader market catches up.