Group 1 - The stock has increased over 260% this year, indicating potential for further growth [1] - Undercovered Deep Insights is led by Moz Farooque, a market analyst with extensive experience in financial journalism and modeling [1] - Moz Farooque's research has been featured on various financial platforms, showcasing his expertise in identifying under-the-radar stock and crypto opportunities [1] Group 2 - The article does not provide any specific investment recommendations or advice [2][3] - There is no indication of any current or planned stock positions by the analyst in the companies mentioned [2]

Core Insights - Pagaya Technologies Ltd. (PGY) achieved a GAAP net income of $16.7 million for Q2 2025, marking its second consecutive quarter of positive net income, a significant improvement from a net loss of $74.8 million in the same quarter last year [1][11] - The company experienced a 30% increase in total revenues and other income, with revenues from fees reaching $317.7 million, a 31% year-over-year rise, driven by growth in network AI fees and a record network volume of $2.6 billion [2][11] - PGY raised its 2025 revenue guidance to between $1.25 billion and $1.325 billion, up from the previous estimate of $1.175 billion to $1.3 billion [4][11] Financial Performance - Contract fees surged by 52.9% year over year to $31.8 million, while interest income rose by 31% to $10.7 million [3] - Investment losses increased by $1.6 million to $2.1 million in Q2 2025 due to unfavorable changes in the valuation of certain proprietary investments [3] Competitive Landscape - Competitors LendingTree (TREE) and LendingClub (LC) also reported strong Q2 results, with LendingTree's adjusted EBITDA increasing by 35% and LendingClub's total revenues rising by 33% [5] Business Model and Strategy - Pagaya's diversified business model includes expansion into auto lending and point-of-sale financing, reducing exposure to cyclical risks [7] - The company has established a network of over 135 institutional funding partners, utilizing forward flow agreements to secure alternative funding sources [8][12] - Pagaya's capital-efficient model minimizes credit risk by avoiding holding loans on its balance sheet, which has proven effective during periods of market stress [10][14] Market Performance - PGY shares have increased by 265.2% year-to-date, outperforming both the industry and the S&P 500 Index [16] - Analysts have revised upward the earnings estimates for PGY, projecting earnings of $2.51 and $3.18 per share for 2025 and 2026, respectively, indicating year-over-year growth rates of 202.4% and 26.7% [19] Valuation - The stock is currently trading at a forward price/sales (P/S) ratio of 1.80X, which is below the industry average of 3.39X, but at a premium compared to TREE and LC [22]

Group 1 - Northern Trust Corporation (NTRS) has outperformed its peers in the Finance sector with a year-to-date performance increase of approximately 22.6%, compared to the sector average gain of 9.1% [4] - The Zacks Consensus Estimate for NTRS' full-year earnings has risen by 7.1% over the past three months, indicating improved analyst sentiment and a more positive earnings outlook [4] - Northern Trust Corporation holds a Zacks Rank of 1 (Strong Buy), reflecting its strong earnings estimates and revisions [3] Group 2 - Northern Trust Corporation is part of the Banks - Major Regional industry, which consists of 10 individual stocks and currently ranks 31 in the Zacks Industry Rank [6] - The Banks - Major Regional industry has seen an average gain of 5.2% so far this year, indicating that NTRS is performing better than its industry peers [6] - Pagaya Technologies Ltd. (PGY) is another Finance stock that has significantly outperformed the sector, with a year-to-date return of 208.6% and a Zacks Rank of 2 (Buy) [5][7]

[Part I - Financial Information](index=6&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for the period ended June 30, 2025, show a significant turnaround to profitability, with total assets growing to $1.40 billion and net income reaching $16.7 million for Q2 2025, a substantial improvement from a net loss in the prior year [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $1.40 billion from $1.29 billion at year-end 2024, primarily due to growth in investments in loans and securities, while total liabilities rose to $856.8 million and total shareholders' equity improved to $468.0 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$1,399,043** | **$1,291,072** | | Cash and cash equivalents | $182,986 | $187,921 | | Investments in loans and securities | $870,061 | $778,409 | | **Total Liabilities** | **$856,814** | **$775,276** | | Secured borrowing | $265,557 | $176,089 | | Long-term debt | $314,547 | $321,317 | | **Total Shareholders' Equity** | **$467,979** | **$441,546** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company achieved a significant turnaround in profitability, reporting a net income attributable to Pagaya of $16.7 million for Q2 2025, compared to a net loss of $74.8 million in Q2 2024, driven by a 31% increase in revenue from fees to $317.7 million and a substantial rise in operating income to $56.5 million from $5.0 million year-over-year Q2 Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue from fees | $317,714 | $242,594 | | Total Revenue and Other Income | $326,398 | $250,344 | | Operating Income | $56,469 | $5,027 | | Net Income (Loss) Attributable to Pagaya | $16,655 | $(74,785) | | Diluted EPS | $0.20 | $(1.04) | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities significantly increased to $91.8 million from $27.0 million in the same period of 2024, while net cash used in investing activities decreased to $152.2 million and net cash provided by financing activities was $74.7 million Six-Month Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $91,777 | $27,004 | | Net cash used in investing activities | $(152,192) | $(342,330) | | Net cash provided by financing activities | $74,652 | $362,434 | [Notes to the Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and provide further information on financial statement items, highlighting strong growth in Network AI fees, the composition of debt, and a significant subsequent event involving the issuance of $500 million in Senior Notes to refinance existing debt - Revenue from fees is primarily composed of Network AI fees (**$285.9 million** in Q2 2025) and Contract fees (**$31.8 million** in Q2 2025)[42](index=42&type=chunk)[43](index=43&type=chunk) - As of June 30, 2025, total borrowings stood at approximately **$727.6 million**, comprising secured borrowings, long-term debt, and exchangeable notes[52](index=52&type=chunk) - Subsequent to the quarter's end, on July 28, 2025, the company issued **$500 million** in Senior Notes and used the proceeds to repay **$332.1 million** of its long-term debt, incurring a **$24 million** loss on extinguishment[137](index=137&type=chunk)[138](index=138&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the strong Q2 2025 performance to a 13.6% YoY growth in Network Volume to $2.6 billion and improved economics with partners, achieving a net income of $16.7 million and Adjusted EBITDA of $86.3 million, while strengthening its balance sheet by issuing $500 million in senior notes post-quarter [Key Operating Metric](index=38&type=section&id=Key%20Operating%20Metric) The company's key operating metric is Network Volume, defined as the gross dollar value of assets originated by partners using Pagaya's AI technology, serving as a primary indicator of scale and revenue generation capability Network Volume Growth (in millions) | Period | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $2,648 | $2,331 | 13.6% | | Six Months Ended June 30 | $5,048 | $4,750 | 6.3% | [Results of Operations](index=40&type=section&id=Results%20of%20Operations) For Q2 2025, total revenue increased 30% YoY to $326.4 million, driven by a 31% rise in fee revenue and a 13.6% increase in Network Volume, leading to a significant swing in profitability with operating income reaching $56.5 million and net income of $16.7 million - Q2 2025 revenue from fees increased by **$75.1 million (31%)** YoY, primarily due to a **$64.1 million** increase in Network AI fees driven by higher Network Volume and improved partner economics[191](index=191&type=chunk)[192](index=192&type=chunk) - General and administrative costs for Q2 2025 decreased by **$24.1 million (37%)** YoY, mainly due to lower losses from loan purchases and reduced compensation expenses[202](index=202&type=chunk) - Other expense, net, decreased by **$38.3 million** YoY, largely due to a **$38.0 million** reduction in credit-related impairment losses on investments[203](index=203&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=47&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) The company highlights non-GAAP metrics to provide a clearer view of core performance, with Fee Revenue Less Production Cost (FRLPC) growing to $126.2 million, Adjusted Net Income to $50.6 million, and Adjusted EBITDA rising to $86.3 million in Q2 2025 Non-GAAP Financial Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Fee Revenue Less Production Cost (FRLPC) | $126,249 | $96,992 | | Adjusted Net Income | $50,624 | $7,188 | | Adjusted EBITDA | $86,283 | $50,305 | [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company had $242.0 million in cash and equivalents, and subsequently issued $500 million in Senior Unsecured Notes in July 2025 to repay existing debt, optimizing its capital structure and ensuring sufficient liquidity for the next twelve months - Principal sources of liquidity as of June 30, 2025, were cash, cash equivalents, and restricted cash totaling **$242.0 million**[231](index=231&type=chunk) - In July 2025, the company issued **$500 million** in Senior Notes at **8.875%** to repay existing debt, including a term loan with an **11.95%** interest rate, thereby optimizing its debt profile[253](index=253&type=chunk)[257](index=257&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures are credit risk on its $870 million investments in loans and securities, interest rate risk affecting floating-rate borrowings and loan performance, and immaterial foreign exchange risk related to Israeli Shekel expenses - The company is exposed to credit risk on its **$870 million** portfolio of investments in loans and securities as of June 30, 2025[285](index=285&type=chunk) - Interest rate risk exists due to floating-rate debt facilities and the potential for higher rates to negatively impact borrower performance and securitization economics[287](index=287&type=chunk)[288](index=288&type=chunk) [Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation as of June 30, 2025, the company's disclosure controls and procedures were deemed effective at a reasonable assurance level, with no material changes in internal control over financial reporting during the quarter - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[292](index=292&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[293](index=293&type=chunk) [Part II - Other Information](index=57&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings that would be expected to have a material adverse effect on its business, financial condition, or results of operations - As of the filing date, Pagaya is not involved in any material legal proceedings[297](index=297&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes from the risk factors previously disclosed in the Annual Report on Form 10-K have been reported[300](index=300&type=chunk) [Other Information](index=58&type=section&id=Item%205.%20Other%20Information) During the second quarter of 2025, Tami Rosen, a director and the company's Chief Development Officer, established a new Rule 10b5-1 trading plan to sell a maximum of 149,610 shares, with the plan ending on March 31, 2026 - On May 29, 2025, director and Chief Development Officer Tami Rosen entered into a new 10b5-1 plan to sell up to **149,610 shares**[304](index=304&type=chunk)

Financial Data and Key Metrics Changes - The company reported a record GAAP net income of $17 million for the second quarter, marking the second consecutive quarter of positive net income [6][39] - Total revenues reached a record $326 million, up 30% year-over-year, with fee revenue less production costs (FRLPC) also at a record of $126 million, reflecting a 30% increase [6][38] - Adjusted EBITDA was $86 million, a 72% increase from the previous year, with a margin improvement to 26.4% [6][38] Business Line Data and Key Metrics Changes - Personal loans were the largest contributor to volume, increasing by 23% year-over-year, while point of sale (POS) and auto lending volumes now comprise 30% of total volumes, up from 9% a year ago [37][38] - The company has diversified its funding sources, adding approximately $5 billion in forward flow capacity since 2024, which now represents 25% of the overall funding mix [11] Market Data and Key Metrics Changes - Network volume grew 14% year-over-year to $2.6 billion, exceeding guidance expectations [36] - The company has expanded its institutional funding network to 153 unique partners, up from 120 last year [42] Company Strategy and Development Direction - The company is focusing on sustainable growth through a disciplined approach, emphasizing the importance of technology and automation to improve operational efficiency [11][12] - The strategy includes expanding product offerings such as direct marketing and affiliate optimization to enhance partner growth without increasing credit risk [20][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the stability of the credit environment and the strong performance of lending partners, while remaining cautious about macroeconomic uncertainties [41][46] - The company raised its full-year financial outlook, reflecting confidence in its unique data and AI underwriting advantages [7][46] Other Important Information - The company successfully raised $500 million through its first corporate bond issuance, which is expected to reduce the cost of debt and enhance cash flow [12][34] - The company achieved its first AAA-rated auto ABS this quarter, indicating improved funding efficiency and lower capital requirements [27][42] Q&A Session Summary Question: Insights on potential new banking partners and BNPL capabilities - Management confirmed that there is significant enthusiasm among banks regarding buy now, pay later (BNPL) offerings, with ongoing discussions and term sheets signed with potential partners [51][54] Question: Impact of the bond offering on capital structure - Management highlighted that the bond offering is transformational, reducing debt costs and enhancing access to capital, which will support business growth [55][56] Question: Growth profile and new product impacts - Management indicated that new products like direct marketing and affiliate optimization are expected to smooth out growth and enhance partner engagement, with rollout anticipated by Q4 2025 [60][66] Question: Competitive dynamics and market direction - Management acknowledged the potential for new entrants in the market but emphasized the unique capabilities and established network of the company as key differentiators [74][78] Question: Consumer credit quality and performance - Management reported strong consumer performance across asset classes, with careful monitoring of credit quality and a disciplined approach to lending [84][86] Question: Growth capacity and future outlook - Management stated that the company has the capacity to double its growth over the next 18 months, focusing on disciplined and profitable growth strategies [90][92]

Financial Data and Key Metrics Changes - Pagaya reported a record GAAP net income of $17 million for Q2 2025, marking the second consecutive quarter of positive net income [5][36] - Total revenues reached a record $326 million, up 30% year-over-year, with fee revenue less production costs (FRLPC) also at a record $126 million, reflecting a 30% increase [5][35] - Adjusted EBITDA was $86 million, a 72% increase from the previous year, with a margin improvement to 26.4% [35][36] Business Line Data and Key Metrics Changes - Personal loans were the largest contributor to network volume, increasing by 23% year-over-year, while point of sale (POS) and auto lending now comprise 30% of total volumes, up from 9% a year ago [34][35] - The company has diversified its funding sources, adding approximately $5 billion in forward flow capacity since 2024, which now represents 25% of the overall funding mix [10][40] Market Data and Key Metrics Changes - Network volume grew 14% year-over-year to $2.6 billion, with a consistent application-to-funding conversion rate of approximately 1% [34][36] - The institutional funding network expanded to 153 unique partners, up from 120 last year, indicating strong demand for Pagaya's solutions [39] Company Strategy and Development Direction - Pagaya is focusing on sustainable growth through partnerships and product innovation, aiming to lend to more partners and offer additional value-added products [12][19] - The company is enhancing its technology capabilities to support partners' growth, including initiatives like the direct marketing engine and affiliate optimizer [19][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the credit environment and the company's ability to manage volumes and credit risk conservatively [10][38] - The outlook for the full year has been raised, with expectations for network volume between $10.5 billion and $11.5 billion and total revenue between $1.25 billion and $1.325 billion [44] Other Important Information - Pagaya successfully raised $500 million through its first corporate bond issuance, reducing its cost of debt from approximately 11% to 9% and enhancing cash flow by an estimated $40 million annually [30][32] - The company achieved its first AAA-rated auto ABS transaction, which is expected to drive significant growth potential in the auto lending business [25][39] Q&A Session Summary Question: Insights on potential new banking partners and BNPL capabilities - Management noted strong enthusiasm among banks for buy now, pay later (BNPL) solutions, with several term sheets signed recently [48][50] Question: Impact of the oversubscribed bond offering on capital structure - The bond offering is seen as transformational, providing significant cash savings and access to capital, enhancing the company's growth potential [51][52] Question: Growth profile and smoothing out results with new products - Management indicated that new product initiatives like direct marketing and affiliate optimization are expected to enhance growth and smooth out revenue fluctuations [56][62] Question: Health of the consumer and credit quality outlook - Consumer performance remains strong, with careful management of credit quality and a focus on responsible lending practices [78][80] Question: Capacity for growth and future expectations - The company anticipates the ability to double its capacity over the next eighteen months, focusing on disciplined and profitable growth [86][88] Question: Onboarding process for new bank partners - The onboarding process involves rigorous model approval and compliance checks before technical integration, ensuring alignment with risk management standards [93]

分组1 - Pagaya Technologies Ltd. reported quarterly earnings of $0.64 per share, missing the Zacks Consensus Estimate of $0.69 per share, but showing an increase from $0.1 per share a year ago, resulting in an earnings surprise of -7.25% [1] - The company posted revenues of $326.4 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.79% and increasing from $250.34 million year-over-year [2] - Pagaya Technologies Ltd. shares have increased approximately 237.6% since the beginning of the year, significantly outperforming the S&P 500's gain of 7.9% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.56 on revenues of $315.8 million, and for the current fiscal year, it is $2.51 on revenues of $1.27 billion [7] - The Zacks Industry Rank for Financial - Miscellaneous Services is in the top 32% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financial Performance - Network Volume increased by 14% from $2331 million in 2Q'24 to $2648 million in 2Q'25 [12] - Total revenue & other income increased by 30% from $250 million in 2Q'24 to $326 million in 2Q'25 [12] - Revenue from fees less production costs (FRLPC) increased by 30% from $97 million in 2Q'24 to $126 million in 2Q'25 [12] - Adjusted EBITDA increased by 72% from $50 million in 2Q'24 to $86 million in 2Q'25 [12] - Net income attributable to Pagaya Technologies Ltd turned positive, from a loss of $75 million in 2Q'24 to a profit of $17 million in 2Q'25 [12] - Adjusted Net Income increased significantly by 604% from $7 million in 2Q'24 to $51 million in 2Q'25 [12] Operating Metrics - Quarterly Application Volume was $238 billion in 2Q'25, with a conversion rate of applications to issued loans of approximately 1% [35] - Investments in loans and securities totaled $870 million as of June 30, 2025 [44] - Securitization Certificates make up 62.9% of the total investments in loans and securities [44] FRLPC Evolution - FRLPC % increased from 4.2% in 2Q'24 to 4.8% in 2Q'25 [56] - The company is targeting FRLPC% in 2025 to be between 4% and 5% [17]

Core Insights - Pagaya Technologies Ltd. (PGY) is set to announce its second-quarter 2025 earnings on August 7, with expectations of strong performance based on previous results [1][5] - The Zacks Consensus Estimate for PGY's second-quarter revenues is $323.8 million, reflecting a 29.4% year-over-year increase [2][5] - The company has seen an 11.3% upward revision in earnings estimates for the upcoming quarter, with expected earnings per share (EPS) of 69 cents [2][5] Revenue and Earnings Estimates - Total revenues and other income for PGY are anticipated to be between $290 million and $310 million, supported by improved economics in personal loan and auto verticals [7][8] - Fee revenues are expected to reach $306 million, indicating a 25.9% year-over-year rise [4][5] - The network volume is estimated at $2.53 billion, which represents a 10% growth from the prior-year quarter [6] Earnings Surprise History - Pagaya has a mixed earnings surprise history, having outperformed the Zacks Consensus Estimate in only two of the last four quarters, with an average surprise of 12.9% [3][4] Growth Strategy - The company's growth strategy includes expanding product offerings, enhancing monetization of existing partnerships, and adding new enterprise lending partners, particularly large U.S. banks and auto captives [7][18] Market Performance and Valuation - PGY shares have outperformed the S&P 500 Index and key peers like LendingTree and LendingClub in the second quarter [11] - The stock is currently trading at a trailing 12-month price/book (P/B) ratio of 5.00X, which is above the industry average of 3.58X [15][17] Business Model Resilience - Pagaya's business model is characterized by its adaptability, having diversified beyond personal loans into auto lending and point-of-sale financing, which reduces exposure to cyclical risks [18] - The company has established a robust network of over 135 institutional funding partners to support its asset-backed securities, enhancing liquidity stability [19]

Core Viewpoint - The article expresses a cautious optimism regarding Pagaya Technologies (NASDAQ: PGY), indicating a willingness to invest based on calculated growth potential rather than high conviction due to the author's value investing approach [1]. Company Analysis - Pagaya Technologies is highlighted as a potential growth investment opportunity, with the author emphasizing a calculated approach to investment rather than a speculative one [1]. - The author has extensive experience in quantitative research, financial modeling, and risk management, which informs the analysis of Pagaya's investment potential [1]. Investment Strategy - The investment strategy combines rigorous risk management with a long-term perspective on value creation, focusing on macroeconomic trends, corporate earnings, and financial statement analysis [1].