Jefferies has reiterated its Buy recommendation on Pagaya Technologies (NASDAQ: PGY) and left its price target at $35.00 after the company released fourth-quarter 2025 financials. That target is positioned within an analyst spread that runs from $27 to $54, and InvestingPro data cited in the report shows the shares are trading materially under their Fair Value, implying potential upside relative to current market levels.
On the headline numbers, Pagaya posted earnings per share of $0.34 for the quarter, narrowly under the Street expectation of $0.35. Revenue for the period was $335 million, below the $349 million consensus, though the top-line still represented a 20% year-over-year increase. The company’s revenue has expanded by 28.33% over the trailing twelve months, underscoring continued growth despite the quarterly shortfall versus estimates.
Operational metrics presented a mixed picture. Network volume totaled $2.7 billion, short of the $2.8 billion consensus but roughly 8% higher than the comparable quarter a year earlier. Fee-related loan portfolio contribution, or FRLPC, reached $131 million, a 12% increase from the prior year. FRLPC margin as a percentage of network volume was 4.9%, slightly below the 5.0% consensus figure.
Pagaya reported operating expenses of $255 million for the quarter, coming in below the Street expectation of $270 million and reflecting the firm’s emphasis on cost discipline. The company also recorded a $7 million tax gain and a $5 million non-controlling interest add-back during the period. On a GAAP basis, net income was $34 million - which the report describes as in line with the Street’s estimate of $32 million - and represents a $272 million improvement versus the year-ago quarter.
Adjusted EBITDA amounted to $98 million, short of the estimated $105 million, a miss the company attributed to weaker top-line performance. Supporting its balance sheet credentials, InvestingPro data cited in the release shows Pagaya with a current ratio of 5.11, indicating liquid assets substantially exceed short-term liabilities, and an overall Financial Health score rated as "GOOD."
In complementary commentary included with the earnings, Pagaya’s fourth-quarter results were characterized as mixed: the company delivered an earnings outcome that exceeded analyst expectations while failing to reach revenue forecasts. That divergence between profit performance and sales is highlighted in the company’s disclosures and could shape investor sentiment and subsequent analyst assessments. The earnings beat signals robust profit generation for the quarter, whereas the revenue shortfall points to challenges in meeting anticipated sales levels. The disclosures recommend monitoring future reports for additional clarity on the company’s trajectory.
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