Why Pagaya Technologies Is Skyrocketing Today

Pagaya Technologies (NASDAQ: PGY) stock is soaring Thursday. The fintech company's share price was up 18.2% as of 2 p.m. ET amid gains of 0.5% for the S&P 500 index and a 0.9% increase for the Nasdaq Composite index. The stock had been up as much as 29.7% earlier in the session.

Pagaya published its fourth-quarter results before the market opened this morning, reporting sales that beat expectations and earnings that missed the market's target. Despite the miss on profitability, the company outperformed in other metrics and issued strong guidance for 2025.

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Pagaya stock surges on revenue and EBITDA beats

Pagaya posted non-GAAP (adjusted) earnings per share of $0.17 on revenue of roughly $279.39 million in Q4. For comparison, the average analyst estimate had guided for adjusted earnings per share of $0.32 on sales of $265.14 million.

Sales in the period were up roughly 28% year over year, and the business saw network volume of $2.6 billion in the quarter. The volume performance, up 9%, marked a new record for the company and was largely driven by activity in the personal loans segment. The business also posted adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $64 million -- far better than management's previous guidance range for adjusted EBITDA between $49 million and $59 million.

What's next for Pagaya Technologies?

For Q1, Pagaya is guiding for sales to come in between $280 million and $295 million, representing growth of roughly 17% at the midpoint of the target. Network volume is projected to come in between $2.5 billion and $2.7 billion -- good for growth of roughly 7.4% at the midpoint. The company expects net income for the period to be between $20 million and breakeven.

Full-year revenue is projected to be between $1.15 billion and $2.28 billion, representing annual growth of approximately 20.7% at the midpoint. On a GAAP basis, the company expects to shift into profitability in the year's Q2. Full-year net income on a GAAP basis is projected to be between $10 million and $40 million. Network volume for the year is forecasted to be between $10.25 billion and $11.75 billion, suggesting growth of roughly 13.3% at the midpoint.

With the company guiding for network-volume growth to accelerate and seemingly poised to shift into GAAP profitability, Pagaya stock could still have room to run.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Pagaya Technologies. The Motley Fool has a disclosure policy.