Pagaya Technologies Co., Ltd. (P.G.Y. – Free Report) is one of the most searched stocks on Zacks.com these days. So it's worth looking at some facts that could shape the stock's performance in the short term.
The company's stock has returned -29.1% over the past month versus the Zacks S&P 500 Composite Index's +0.8%. The Zacks Technology Services industry, which includes Pagaya Technologies, has declined 1.6% in this period. The key question here is where the stock is likely to go in the short term.
While media releases and rumors about significant changes in a company's business prospects typically cause its stock to “trend” and lead to immediate price movements, there are some fundamentals that ultimately govern buy-and-hold decisions. There are always facts.
Regarding revisions to performance forecasts
At Zacks, we prioritize evaluating changes in company earnings estimates rather than focusing on anything else. This is because we believe that the fair value of a stock is determined by the present value of its future income stream.
Essentially, we look at how the sell-side analysts covering a stock are revising their earnings estimates to reflect the impact of the latest business trends. And as a company's earnings expectations rise, so will the fair value of its stock. If the fair value is higher than the current market price, investors will be more willing to buy the stock, causing the price to rise. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Pagaya Technologies Inc. is expected to post earnings of $0.16 per share for the current quarter, which would represent a year-over-year change of +166.7%. Over the past 30 days, the Zacks Consensus Estimate has changed -129.2%.
The current year's consensus earnings estimate of $0.98 represents a year-over-year change of +308.3%. Over the past 30 days, this estimate has changed -117.7%.
Next year's consensus earnings estimate of $1.97 represents a +100.5% change from the revenue that Pagaya Technologies, Inc. was expected to report a year ago. Over the past month, the estimate has changed -37%.
The Zacks Rank, a proprietary stock evaluation tool with a strong, outside-audited track record, leverages the power of earnings estimate revisions to provide a more definitive picture on near-term stock price direction. To do. The magnitude of the recent consensus estimate change, along with three other factors related to earnings expectations, has given Pagaya Technologies a Zacks Rank #3 (Hold).
The chart below shows the company's consensus EPS estimate over the next 12 months over time.
12 months EPS
Expected revenue growth rate
Earnings growth is arguably the best indicator of a company's financial health, but nothing will happen if a company can't grow its revenue. After all, it's nearly impossible for a company to increase profits over a long period of time without increasing revenue. Therefore, it's important to know a company's earnings growth potential.
Pagaya Technologies Inc.'s consensus revenue estimate for the current quarter is $229.45 million, representing a year-over-year change of +22.9%. For the current and next fiscal years, estimates of $964.43 million and $1.23 billion represent changes of +21.8% and +27.9%, respectively.
Last reported results and surprising details
Paaya Technologies Ltd. reported revenue of $218.04 million in its last reported quarter. This represents a +13% change year over year. EPS for the same period was $0.24, compared to -$0.12 a year ago.
The reported earnings are a surprise of -2.11% when compared to the Zacks Consensus Estimate of $222.74 million. EPS surprise was -33.33%.
The company has failed to beat consensus EPS estimates in any of the last four quarters. The company surpassed consensus revenue estimates two times during the period.
evaluation
You cannot make efficient investment decisions without considering stock valuation. Whether a stock's current price accurately reflects the intrinsic value of the underlying business and the company's growth prospects is a key determinant of future stock performance.
The present value of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), and the past value of your company Comparing a company to its peers based on these parameters can help you see if it is overvalued, overvalued or undervalued, but how reasonable its stock is You can get to know better.
Zacks Value Style Score (part of the Zacks Style Scores system). We pay close attention to both traditional and non-traditional metrics and rate stocks from A to F (A is better than B, B is better than C, and A is better than B. is also very useful in identifying whether a stock is overvalued, well-valued, or temporarily undervalued.
Pagaya Technologies is rated B on this score, indicating that it trades at a discount compared to its peers. Click here to see the values of some of the metrics that determined this grade.
conclusion
The facts discussed here, and much of the other information on Zacks.com, may help you decide whether the market buzz about Pagaya Technologies, Inc. is worth paying attention to. However, the company's Zacks Rank #3 suggests it has the potential to perform in line with the broader market. in a few days.
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