Citizens lowered its price target on Pagaya Technologies (NASDAQ:PGY) to $22.00 from $35.00 on Tuesday, but maintained a Market Outperform rating on the fintech stock. The research firm's move follows recent volatility in Pagaya shares, which were trading at $14.19 at the time of the update - down more than 23% over the last week and over 50% in the previous six months.
The analyst team at Citizens attributed the reduced valuation to expectations of slower growth measured on a dollar basis. That slower growth dynamic, Citizens said, would translate into reduced operating leverage for Pagaya in the coming year.
Citizens analyst David Scharf indicated that while the firm expects Pagaya's origination growth to reaccelerate in 2027, they still see more than 20% year-over-year origination growth occurring off a lower revenue base as the company exits the current year. Citizens also factored in a higher average share count when updating its forecasts.
As a result of these inputs, Citizens trimmed its 2027 GAAP EPS estimate for Pagaya from $2.50 to $1.77. The new $22 price target reflects Citizens applying a 12.5x GAAP EPS multiple to that updated 2027 earnings estimate.
External data referenced in the research note shows Pagaya has delivered robust revenue growth of 28.33% over the past twelve months and appears undervalued versus Fair Value assessments, according to InvestingPro data. Analyst targets collected by InvestingPro range from $20 to $40, with a bullish consensus recommendation figure of 1.36.
Pagaya's most recent reported quarter, fourth-quarter 2025, presented a mixed picture. The company posted earnings per share of $0.80, well above the $0.35 forecast - a 128.57% surprise versus expectations. However, revenue for the period was $334.81 million, short of the $348.75 million analysts had expected. That revenue shortfall has contributed to investor concern and broader market uncertainty around the stock.
The Citizens update rests on the combination of anticipated weaker dollar-based growth next year, the expectation of a rebound in origination growth in 2027, and the dilutive effect of a higher average share count on per-share results. Taken together, those factors produced the lowered EPS estimate and the corresponding reduction in the price target.
Investors tracking fintech names and equity markets will likely assess how the revenue-versus-earnings divergence and revised guidance influence sentiment toward Pagaya as the company navigates the next phases of growth and operating leverage.