Core Insights - Investors should consider adding stocks with strong liquidity to their portfolios, as these stocks are associated with business growth and potential maximum returns [1][2] - Four top-ranked stocks identified for potential investment are Remitly Global, Inc. (RELY), Frontdoor, Inc. (FTDR), Pagaya Technologies Ltd. (PGY), and Willdan Group, Inc. (WLDN) [1][9] Liquidity Measures - Current Ratio: Measures current assets against current liabilities; a ratio below 1 indicates more liabilities than assets, while a range of 1-3 is ideal [4] - Quick Ratio: Indicates ability to pay short-term obligations, with a desirable ratio of more than 1 [5] - Cash Ratio: The most conservative measure, focusing on cash and equivalents relative to current liabilities; a ratio greater than 1 is desirable but may indicate inefficiency [6] Screening Parameters - Asset Utilization: A measure of efficiency, calculated as total sales over the last 12 months divided by the average total assets; companies with a ratio higher than their industry average are considered efficient [7][8] - Growth Score: A proprietary metric added to ensure that liquid and efficient stocks also have solid growth potential [8] Company Highlights - **Remitly Global, Inc. (RELY)**: Specializes in digital financial and remittance services, with revenues of $411.9 million for Q2 2025, up 34% year over year; active customers grew 24% to over 8.5 million [12][10] - **Frontdoor, Inc. (FTDR)**: Parent company of home service plan brands, reported revenues of $617 million for Q2 2025, up 14% year over year; DTC member count increased by 9% [15][14] - **Pagaya Technologies Ltd. (PGY)**: Focuses on AI infrastructure for finance, with total revenues of $326 million for Q2 2025, a 30% increase year over year; annualized run-rate for POS and Auto segments reached $1.2 billion and $2 billion, respectively [17][18] - **Willdan Group, Inc. (WLDN)**: Provides consulting services to government and private sectors, with net revenues expected between $340 million and $350 million for 2025; contract revenues jumped 23% year over year [20][21]

Group 1 - JMP Securities raised the target price for Pagaya Technologies (PGY.US) from $26 to $35, maintaining an "Outperform" rating [1] - Keefe, Bruyette & Woods also increased Pagaya's target price from $27 to $38, while keeping an "Outperform" rating [1] - Pagaya reported a record GAAP net profit of $17 million for the latest quarter, driven by revenue growth and reduced expenses [1] Group 2 - Pagaya's network transaction volume reached a record $2.6 billion, representing a 14% year-over-year increase [1] - The company's adjusted EBITDA hit a record $86 million, up $36 million year-over-year [1] - Pagaya's latest closing price was $36.88, with a year-to-date increase of 297% [2]

Core Insights - Pagaya Technologies Ltd. (PGY) utilizes artificial intelligence and extensive datasets to facilitate consumer credit underwriting and connect loans with institutional investors, effectively bridging Wall Street and Main Street [1][2] Financial Performance - Pagaya achieved a record GAAP net income of $16.7 million for the second quarter of 2025, a significant improvement from a net loss of $74.8 million in the same quarter the previous year [2][10] - The company has posted positive net income for two consecutive quarters, indicating a turnaround in its financial fundamentals and profitability [2] Business Model and Strategy - Pagaya operates a diversified and scalable model, leveraging a network of 145 institutional funding partners and various banks and fintech originators, which allows for multiple revenue streams and reduced exposure to any single lender or product [3][10] - The capital-light approach of Pagaya minimizes credit risk, as loans are quickly sold through securitizations or forward-flow agreements [3] Product Innovation - Recent product innovations, such as the Direct Marketing Engine and FastPass in auto lending, have enhanced partner engagement and streamlined application processes [4] - New AAA-rated asset-backed securities (ABS) deals in auto and point-of-sale (POS) lending validate Pagaya's asset quality and expand its lending capacity, with over $1 billion in effective POS lending capital [4] Market Performance - Pagaya's stock has surged by 265.4% year-to-date, significantly outperforming the industry average increase of 5.6% [9][10] - The current price-to-sales (P/S) ratio for Pagaya is 1.79X, which is below the industry average of 3.45X, indicating potential undervaluation [11] Earnings Estimates - The Zacks Consensus Estimate for Pagaya's earnings has increased for 2025 and 2026, projecting earnings of $2.65 and $3.43, respectively, which reflects year-over-year growth rates of 219.3% and 29.3% [12]

Core Insights - Pagaya Technologies Ltd. (PGY) shows potential as a strong investment due to significant revisions in earnings estimates, indicating an improving earnings outlook [1][10] Estimate Revisions - The current quarter's earnings estimate is projected at $0.65 per share, reflecting a 47.7% increase from the previous year [6] - Over the last 30 days, the Zacks Consensus Estimate for Pagaya Technologies has risen by 25.35%, with one estimate increasing and no negative revisions [6] - For the full year, the earnings estimate is expected to be $2.65 per share, representing a 219.3% increase from the prior year [7] - The consensus estimate for the current year has increased by 7.83% due to positive revisions [8] Zacks Rank - Pagaya Technologies has achieved a Zacks Rank of 2 (Buy), indicating favorable estimate revisions that suggest strong future performance [9] - Stocks rated Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500 [9] Stock Performance - Pagaya Technologies shares have increased by 7.3% over the past four weeks, reflecting investor confidence in the company's earnings growth prospects [10]

Core Insights - The article highlights two companies, Innodata Inc. (INOD) and Pagaya Technologies Ltd. (PGY), as significant players in the AI and fintech sectors, both leveraging AI for distinct market solutions [2][3]. Group 1: Innodata Inc. (INOD) - Innodata reported a 79% year-over-year revenue increase to $58.4 million in Q2 2025, with adjusted EBITDA rising 375% to $13.2 million [5][10]. - The company has expanded its enterprise relationships, particularly with major tech clients, and anticipates a revenue increase from a key partner from $200,000 to $10 million in the second half of 2025 [6]. - Innodata is investing in long-cycle platforms and emerging fields like autonomous agents and robotics, committing $1.4 million to new hiring for product development [7][8]. - The company faces concentration risk due to reliance on a few large clients but has a healthy cash position of $59.8 million and an unused credit facility to support growth [8]. Group 2: Pagaya Technologies Ltd. (PGY) - Pagaya achieved $326 million in Q2 2025 revenue, a 30% increase year-over-year, and reported $17 million in GAAP net income, marking a turnaround from previous losses [12][10]. - The company raised its full-year 2025 revenue outlook to $1.25–$1.325 billion, indicating over 20% growth, with an expected GAAP net income of $55–$75 million [12]. - Pagaya's diversified model includes 145 institutional funding partners, reducing reliance on single clients and enabling multiple revenue streams [13]. - The company has introduced innovative products like the Direct Marketing Engine and FastPass, enhancing its operational efficiency and expanding lending capacity [14]. Group 3: Stock Performance and Valuation - Innodata's stock is trading around $37.74, with a 52-week range of $13.02 to $71.00, reflecting a slight decline of 1.4% recently [16]. - Pagaya's stock is trading around $29.77, with a 52-week range of $8.20 to $41.48, down about 1.7% recently [17]. - Year-to-date, Pagaya's stock has increased approximately 220.5%, while Innodata's stock has declined by 4.5% [18]. - Innodata has a market cap of $1.2 billion with a forward P/S ratio of 4.29, indicating high expectations for growth [21]. - Pagaya, with a market cap near $2.3 billion, has a forward P/S ratio of 1.58, suggesting a more favorable valuation compared to Innodata [22]. Group 4: Earnings Estimates - The Zacks Consensus Estimate for Innodata's 2025 EPS is 71 cents, reflecting a 20.2% decline from the previous year, with a revenue growth estimate of 42.8% [24]. - For Pagaya, the 2025 EPS estimate is $2.51, indicating a 202.4% improvement from the previous year, with a revenue growth estimate of 28.4% [27]. Group 5: Conclusion - Both companies are positioned well within the AI landscape, but they cater to different investor preferences: Innodata offers rapid growth potential in AI data engineering, while Pagaya presents a more stable fintech model with strong profitability [30][32].

Group 1 - The article argues for a Buy rating on Pagaya Technologies (NASDAQ: PGY) stock, emphasizing a fundamental shift towards a scalable and profitable AI-based financial platform [1] - The analysis suggests that the rating is not immediate but systematic, indicating a long-term investment perspective [1]

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)