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Fintech Stocks Rally as Pagaya Technologies Surges on Potential Interest Rate Cuts
ByAinvest
Friday, Aug 22, 2025 4:12 pm ET1min read
Pagaya Technologies (PGY) surged 13% after the Federal Reserve hinted at potential interest rate cuts, boosting fintech stocks. Wall Street analysts project a one-year average price target of $40.50, with a potential upside of 20.46%. However, GuruFocus estimates suggest a potential downside of 48.84% based on its GF Value of $17.20.
Pagaya Technologies (PGY) saw its stock price increase by 13% following the Federal Reserve's hint at potential interest rate cuts. This news has significantly boosted the fintech sector, with analysts projecting a one-year average price target of $40.50 and a potential upside of 20.46%. However, GuruFocus estimates suggest a potential downside of 48.84% based on its GF Value of $17.20.The Federal Reserve's hint at interest rate cuts has been a significant catalyst for Pagaya Technologies' stock price. The fintech company has been making strides in its AI lending platform, which has seen strong growth and profitability. In the second quarter of 2025, Pagaya reported a 30% surge in sales to reach $326 million, with its AI lending platform finally reaching the scale to achieve GAAP profits [2].
Pagaya has been expanding its AI lending platform, signing major funding deals and partnerships. For instance, it recently signed a $2.5 billion deal with Castlelake LP to acquire consumer loans, doubling the original plan and signaling solid returns for funding partners [2]. Additionally, Pagaya continues to issue ABS securitizations to raise funds for its auto business and point-of-sale loans in partnership with Klarna and Elavon/Avvance [2].
Analysts have been bullish on Pagaya's prospects, with Seeking Alpha rating it a systematic buy driven by its shift to GAAP profitability, scalable operating leverage, and a capital-light, diversified funding model [1]. Despite the positive outlook, GuruFocus estimates suggest a potential downside of 48.84%, highlighting the risks investors should consider.
Pagaya's stock price has been volatile, with a significant rally in recent months. However, the company's strong financial performance and strategic partnerships position it well for future growth. Investors should closely monitor the Federal Reserve's policies and Pagaya's quarterly earnings reports to gauge its stock's potential.
References:
[1] https://stockanalysis.com/stocks/pgy/
[2] https://seekingalpha.com/article/4815598-pagaya-technologies-unbelievably-cheap-after-big-rally
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