Pagaya reported yesterday morning. For us long-term holders, it was finally the break-through GAAP-positive earnings quarter, with $8M in Net Income. Adjusted EBITDA also doubled YoY to $80M.
The theme of the call was “prudent focus on long-term profitable vs. short-term revenue growth”, which is reflected in their revenue growth rate which was only 18% for the quarter. The guide was pretty good however at $300M, and should get them back to mid-20s growth next quarter. Still not as high as I’d like as a growth investor but it makes all the sense in the world that they’d be prudent in the current environment. And they are still ridiculously undervalued on almost every metric you could use, so I will hold at my current allocation (~10%).
The reaction was strange yesterday, with the stock up 10% initially, then moved down to -5% and settled at -2.5% by close. Today, the market decided they liked the report and it’s up 19.5%.