Research HubSoftware & Cloud ServicesPagaya Technologies Ltd. (PGY)

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SEC 10-K / 10-Q Equity ResearchSoftware & Cloud ServicesTicker: PGY

Pagaya Technologies Ltd. (PGY) DCF Valuation & Fundamental Primer

Pagaya Technologies Ltd. (PGY) currently trades at $24.26 with an enterprise value of $8.14B. Our proprietary institutional model rates Pagaya Technologies Ltd. at 54/100 (Grade: B · Mixed Fundamental Profile). The current market price prices in an implied 5-year revenue CAGR of 5.6% vs. historical growth of 81.9% (Substantial Margin of Safety).

GDA Quality Score

B54/100

Mixed Fundamental Profile

Share Price / DCF Base

$24.26 / $99.95

Enterprise Value

$2.35B

TTM Revenue

$1.00B (+81.9%)

Gross Margin

40.5%

Rule of 40 Score

86.2%

EV / TTM Revenue

2.3×

Structural Moat: Enterprise Software & Cloud Services Switching Costs & Recurring Workflow Integration

Key Growth Catalyst: AI workflow automation, multi-module expansion across enterprise cohorts, and operating margin leverage at Pagaya Technologies Ltd..

Institutional fundamental teardown of Pagaya Technologies Ltd. (PGY) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.

Seed PGY in Interactive 3-Statement Model

Section 1 · Intrinsic Valuation Engine

Pagaya Technologies Ltd. (PGY) 3-Scenario DCF Valuation Range

WACC: 10.0% · Terminal Growth: 2.5% · Diluted Shares: 76.5M

bear Case DCFSensitivity

$13.45

Implied Equity Value:$1.03B

vs Current ($24.26):-44.5%

base Case DCFPrimary Benchmark

$99.95

Implied Equity Value:$7.64B

vs Current ($24.26):+312.0%

bull Case DCFSensitivity

$295.78

Implied Equity Value:$22.62B

vs Current ($24.26):+1119.2%

Interactive What-If DCF SandboxSim Rule of 40: 91.9%

Stress-test PGY's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.

Seed Custom Drivers in /model

1-Click Regimes:

5Y Revenue CAGR81.9%

2%Hist: 81.9%50%

Target FCF Margin10.0%

5%Base: 10%45%

WACC Discount Rate10.0%

6.5%Base: 10%14.5%

Terminal Growth (g)2.5%

1.0%Implies 13.7× Y5 FCF4.0%

Accounting Lens:

Simulated Implied Price$253.29

Spread vs Market+944.0%

Simulated EV$19.86B

Effective FCF Margin10.0%

Simulated 5-Year Cash Flow Trajectory (Unlevered FCF vs. Discounted PV)Cumulative 5Y PV: $2.89B

Year 1$1.83B

FCF:$182.7M

PV:$166.1M

Year 2$3.32B

FCF:$332.4M

PV:$274.7M

Year 3$6.05B

FCF:$604.6M

PV:$454.2M

Year 4$11.00B

FCF:$1.10B

PV:$751.2M

Year 5$20.00B

FCF:$2.00B

PV:$1.24B

Enterprise Value Composition Bridge$19.86B

Split between 5-Year Explicit Cash Flows and Discounted Terminal Value

5Y Explicit PV: $2.89B (14.5%)Terminal PV: $16.98B (85.5%)

(+) Balance Sheet Cash & Equivalents+$187.9M

(−) Total Debt Obligations−$680.8M

(=) Implied Equity Value (76.5M shs)$19.37B

2D Institutional Valuation Sensitivity Heatmap

Implied share price & upside/downside spread across 25 valuation states (Current Price: $24.26).

WACC \ Terminal	1.5%	2.0%	2.5%	3.0%	3.5%
8.5%	$285.64 +1077%	$306.38 +1163%	$330.58 +1263%	$359.18 +1381%	$393.49 +1522%
9.3%	$252.46 +941%	$268.80 +1008%	$287.56 +1085%	$309.32 +1175%	$334.86 +1280%
10.0%	$225.26 +829%	$238.40 +883%	$253.29 +944%	$270.30 +1014%	$289.93 +1095%
10.8%	$202.59 +735%	$213.33 +779%	$225.38 +829%	$238.97 +885%	$254.45 +949%
11.5%	$183.43 +656%	$192.34 +693%	$202.24 +734%	$213.30 +779%	$225.74 +831%

Section 2 · Fundamental Underwriting

Institutional Software Quality Scorecard (54/100 · Grade B)

Mixed Fundamental Profile

Viable recurring software business but carries notable dilution, lower margins, or higher leverage.

Cash Conversion13 / 25

Actual: 65% of EBITTarget: Target: ≥100%

Positive FCF but lower conversion efficiency due to capex or timing

Dilution Friction21 / 25

Actual: 6.1% of RevTarget: Target: ≤8%

Disciplined equity compensation well below software industry average

Unit Economics8 / 25

Actual: 41% GM / R40: 86%Target: Target: ≥75% GM / ≥40% R40

Sub-par gross margins; higher cost of delivery or hardware/services mix

Balance Sheet12 / 25

Actual: -$492.9M Net DebtTarget: Target: Net Cash > 0

Moderate leverage or cash burn; monitor liquidity runway

Core Investment Strengths & Moats

Key Operational & Dilution Risks

Lower software gross margins (40.5%), indicating higher hosting or service delivery drag

Section 3 · Expectations Investing

Reverse-DCF Solver: What Growth is Priced Into PGY?

Substantial Margin of Safety

The current share price only requires 5.6% 5-year CAGR (11.9% dilution-adjusted), well below historical growth of 81.9%. If the company maintains baseline execution, there is asymmetric upside.

Implied 5-Year Revenue CAGR

5.6%

Required to justify $2.35B EV

Historical Run-Rate CAGR

81.9%

Audited multi-year top-line trajectory

Growth Hurdle Spread

-76.3%

Implied hurdle minus historical growth

Implied FCF Margin @ Hist. Growth

1.2%

Steady-state FCF margin needed at current CAGR

Institutional Dilution-Adjusted Hurdle Lens

Headline Reverse-DCF ignores Stock-Based Compensation (6.1% of revenue) and annual share dilution (0.7%/yr). Accounting for both requires 11.9% 5-year revenue CAGR to justify $24.26/sh on a true per-share economic cash flow basis.

True Economic Hurdle11.9%

SBC & Dilution Hurdle Tax+6.3% / yr

Section 4 · 5-Year Forecast Schedule

Pagaya Technologies Ltd. (PGY) 5-Year Fundamental Forecast

Customize in Live Engine

Statement Line Item	TTM Audited Base	TTM	Y1	Y2	Y3	Y4	Y5
Revenue	$1.00B	$1.00B	$1.81B	$3.25B	$5.86B	$10.55B	$18.98B
Gross Profit	$406.9M	$406.9M	$732.5M	$1.32B	$2.37B	$4.27B	$7.69B
Operating Income (EBIT)	$66.8M	$66.8M	$120.2M	$216.4M	$389.6M	$701.3M	$1.26B
Stock-Based Compensation (SBC)	$61.5M	$61.5M	$110.7M	$199.2M	$358.5M	$645.4M	$1.16B
Unlevered Free Cash Flow (FCF)	$43.3M	$43.3M	$77.9M	$140.3M	$252.5M	$454.5M	$818.1M
SBC-Adjusted True Cash Flow	$-18.2M	$-18.2M	$-32.7M	$-58.9M	$-106.0M	$-190.9M	$-343.6M

Section 5 · Relative Valuation Multiples & Regression

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Click any peer node or ticker to open its dedicated equity research report

Rule of 40 vs. EV / Revenue Multiple Regression

OLS Fit: EV/Rev = 7.7 + 0.05 × (Rule of 40) · R² = 12%

Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.

PGY Actual vs. Reg. Multiple2.3× vs 12.0× fair

Reg.-Implied Share Price$150.95 (80.5% Discount)

PGYPagaya Technologies Ltd.·Rule of 40: 86.2%·Actual EV/Rev: 2.3×·Regression Fair Multiple: 12.0×

80.5% Below Trendline (Attractive)Open PGY Report

Company	Ticker	Market Cap	TTM Revenue	Gross Margin	FCF Margin	Rule of 40	SBC % Rev	EV / Rev
Pagaya Technologies Ltd.	PGY	$1.86B	$1.00B	40.5%	4.3%	86.2%	6.1%	2.3×
ServiceNow	NOW	$152.61B	$10.98B	79.2%	31.1%	54.2%	15.9%	13.9×
Workday, Inc.	WDAY	$50.35B	$8.00B	75.0%	27.4%	43.9%	19.0%	6.4×
Salesforce	CRM	$217.10B	$37.90B	77.2%	32.8%	42.8%	8.4%	5.8×
Datadog	DDOG	$46.05B	$2.68B	80.8%	31.1%	57.7%	21.3%	17.4×
Snowflake Inc.	SNOW	$71.79B	$3.63B	66.5%	25.2%	57.7%	40.8%	20.0×
Hubspot	HUBS	$19.89B	$2.63B	85.0%	21.3%	52.7%	19.2%	7.7×
Peer Cohort Median Benchmark (N=6)				78.2%	29.2%	53.5%	19.1%	10.8×

Section 6 · Downside Protection & Multiple Sensitivity

EV / Revenue Multiple Compression Stress Test

Multiple Scenario	EV / Revenue	Implied Enterprise Value	Implied Equity Value	Implied Share Price	Delta vs Current
Current Multiple	2.3×	$2.35B	$1.86B	$24.26	0.0%
-20% Multiple Compression	1.9×	$1.88B	$1.39B	$18.12	-20.0%
-35% Multiple Compression	1.5×	$1.53B	$1.03B	$13.51	-35.0%
Software Baseline Floor (5.0× EV/Rev)	5.0×	$5.02B	$4.53B	$59.23	+113.9%

Section 7 · Investor Diligence FAQ

Frequently Asked Questions: Pagaya Technologies Ltd. (PGY) Valuation

What is Pagaya Technologies Ltd. (PGY)'s intrinsic DCF valuation and implied share price?

Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Pagaya Technologies Ltd. (PGY) has a Base Case implied value of $99.95 per share (with a Bear Case of $13.45 and a Bull Case of $295.78), compared to its current price of $24.26. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.

What is Pagaya Technologies Ltd. (PGY)'s Rule of 40 score and Free Cash Flow margin?

Pagaya Technologies Ltd. achieves a Rule of 40 score of 86.2%, combining a 81.9% revenue growth run-rate with a 4.3% TTM free cash flow margin on $1.00B in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.

What revenue growth rate is priced into PGY stock according to Reverse-DCF analysis?

At $24.26 per share (Enterprise Value of $2.35B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 5.6%, compared to Pagaya Technologies Ltd.'s historical CAGR of 81.9%. Overall market expectations are rated as "Substantial Margin of Safety".

How does Pagaya Technologies Ltd. compare to Software & Cloud Services software peers?

Pagaya Technologies Ltd. (PGY) earns an institutional Software Quality Score of 54/100 (Grade B — Mixed Fundamental Profile). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.

How does Stock-Based Compensation (SBC) impact Pagaya Technologies Ltd. (PGY)'s valuation?

Pagaya Technologies Ltd. recorded $61.5M in TTM stock-based compensation (6.1% of revenue). When treating SBC as a cash-equivalent compensation expense, Pagaya Technologies Ltd.'s SBC-adjusted free cash flow yield is -1.0%, scoring 21/25 on our Shareholder Dilution Friction pillar.

Pagaya Technologies Ltd. (PGY) DCF Valuation & Fundamental Primer

WACC \ Terminal

1.5%

2.0%

2.5%

3.0%

3.5%

8.5%

$285.64

+1077%

$306.38

+1163%

$330.58

+1263%

$359.18

+1381%

$393.49

+1522%

9.3%

$252.46

+941%

$268.80

+1008%

$287.56

+1085%

$309.32

+1175%

$334.86

+1280%

10.0%

$225.26

+829%

$238.40

+883%

$253.29

+944%

$270.30

+1014%

$289.93

+1095%

10.8%

$202.59

+735%

$213.33

+779%

$225.38

+829%

$238.97

+885%

$254.45

+949%

11.5%

$183.43

+656%

$192.34

+693%

$202.24

+734%

$213.30

+779%

$225.74

+831%

Statement Line Item

TTM Audited Base

TTM

Revenue

$1.00B

$1.81B

$3.25B

$5.86B

$10.55B

$18.98B

Gross Profit

$406.9M

$732.5M

$1.32B

$2.37B

$4.27B

$7.69B

Operating Income (EBIT)

$66.8M

$120.2M

$216.4M

$389.6M

$701.3M

$1.26B

Stock-Based Compensation (SBC)

$61.5M

$110.7M

$199.2M

$358.5M

$645.4M

$1.16B

Unlevered Free Cash Flow (FCF)

$43.3M

$77.9M

$140.3M

$252.5M

$454.5M

$818.1M

SBC-Adjusted True Cash Flow

$-18.2M

$-32.7M

$-58.9M

$-106.0M

$-190.9M

$-343.6M

Company

Ticker

Market Cap

TTM Revenue

Gross Margin

FCF Margin

Rule of 40

SBC % Rev

EV / Rev

Pagaya Technologies Ltd.

PGY

$1.86B

$1.00B

40.5%

4.3%

86.2%

6.1%

2.3×

ServiceNow

NOW

$152.61B

$10.98B

79.2%

31.1%

54.2%

15.9%

13.9×

Workday, Inc.

WDAY

$50.35B

$8.00B

75.0%

27.4%

43.9%

19.0%

6.4×

Salesforce

CRM

$217.10B

$37.90B

77.2%

32.8%

42.8%

8.4%

5.8×

Datadog

DDOG

$46.05B

$2.68B

80.8%

31.1%

57.7%

21.3%

17.4×

Snowflake Inc.

SNOW

$71.79B

$3.63B

66.5%

25.2%

57.7%

40.8%

20.0×

Hubspot

HUBS

$19.89B

$2.63B

85.0%

21.3%

52.7%

19.2%

7.7×

Peer Cohort Median Benchmark (N=6)

78.2%

29.2%

53.5%

19.1%

10.8×

Multiple Scenario

EV / Revenue

Implied Enterprise Value

Implied Equity Value

Implied Share Price

Delta vs Current

Current Multiple

2.3×

$2.35B

$1.86B

$24.26

0.0%

-20% Multiple Compression

1.9×

$1.88B

$1.39B

$18.12

-20.0%

-35% Multiple Compression

1.5×

$1.53B

$1.03B

$13.51

-35.0%

Software Baseline Floor (5.0× EV/Rev)

5.0×

$5.02B

$4.53B

$59.23

+113.9%

Pagaya Technologies Ltd. (PGY) 3-Scenario DCF Valuation Range

2D Institutional Valuation Sensitivity Heatmap

Institutional Software Quality Scorecard (54/100 · Grade B)

Core Investment Strengths & Moats

Key Operational & Dilution Risks

Reverse-DCF Solver: What Growth is Priced Into PGY?

Pagaya Technologies Ltd. (PGY) 5-Year Fundamental Forecast

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Rule of 40 vs. EV / Revenue Multiple Regression

EV / Revenue Multiple Compression Stress Test

Frequently Asked Questions: Pagaya Technologies Ltd. (PGY) Valuation

What is Pagaya Technologies Ltd. (PGY)'s intrinsic DCF valuation and implied share price?

What is Pagaya Technologies Ltd. (PGY)'s Rule of 40 score and Free Cash Flow margin?

What revenue growth rate is priced into PGY stock according to Reverse-DCF analysis?

How does Pagaya Technologies Ltd. compare to Software & Cloud Services software peers?

How does Stock-Based Compensation (SBC) impact Pagaya Technologies Ltd. (PGY)'s valuation?

Related Software & Cloud Services Equity Research Reports

Pagaya Technologies Ltd. (PGY) 3-Scenario DCF Valuation Range

2D Institutional Valuation Sensitivity Heatmap

Institutional Software Quality Scorecard (54/100 · Grade B)

Core Investment Strengths & Moats

Key Operational & Dilution Risks

Reverse-DCF Solver: What Growth is Priced Into PGY?

Pagaya Technologies Ltd. (PGY) 5-Year Fundamental Forecast

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Rule of 40 vs. EV / Revenue Multiple Regression

EV / Revenue Multiple Compression Stress Test

Frequently Asked Questions: Pagaya Technologies Ltd. (PGY) Valuation

What is Pagaya Technologies Ltd. (PGY)'s intrinsic DCF valuation and implied share price?

What is Pagaya Technologies Ltd. (PGY)'s Rule of 40 score and Free Cash Flow margin?

What revenue growth rate is priced into PGY stock according to Reverse-DCF analysis?

How does Pagaya Technologies Ltd. compare to Software & Cloud Services software peers?

How does Stock-Based Compensation (SBC) impact Pagaya Technologies Ltd. (PGY)'s valuation?

Related Software & Cloud Services Equity Research Reports