Overview
- Pagaya announced on June 8 that it has extended its long-running partnership with Upgrade to embed Pagaya’s AI-led credit decisioning into Upgrade’s Flex Pay buy-now-pay-later product, starting with travel merchants.
- Texas Capital initiated coverage on June 11 with a Buy rating and a $27 price target, a move that helped spark a wave of positive commentary from market analysts on July 8–9.
- Analysts highlight improving unit economics at Pagaya, citing margin expansion, accelerating GAAP profitability and rising free cash flow that the company is using to pay down debt and build reserves.
- Valuation arguments for bullish investors point to a low forward P/E near 6x and a perceived discount to peers, while the stock’s wide 52-week trading range underscores high price volatility.
- Key risks remain competitive pressure among AI underwriting vendors and potential credit-cycle stress that could slow merchant adoption or raise loss rates, with the expansion likely to increase the volume of consumer loans underwritten at checkout.