One of the biggest stories of last week was how Pagaya Technologies Ltd. (NASDAQ:PGY) shares plunged 27% in the week since its latest third-quarter results, closing yesterday at US$9.47. Revenues were in line with expectations, at US$257m, while statutory losses ballooned to US$0.93 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Pagaya Technologies

Taking into account the latest results, the current consensus from Pagaya Technologies' eight analysts is for revenues of US$1.16b in 2025. This would reflect a notable 20% increase on its revenue over the past 12 months. Pagaya Technologies is also expected to turn profitable, with statutory earnings of US$0.44 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.18b and earnings per share (EPS) of US$0.39 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the substantial gain in earnings per share expectations following these results.

The average the analysts price target fell 9.3% to US$20.75, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Pagaya Technologies, with the most bullish analyst valuing it at US$36.00 and the most bearish at US$11.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Pagaya Technologies' revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2025 being well below the historical 37% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% annually. So it's pretty clear that, while Pagaya Technologies' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Pagaya Technologies following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Pagaya Technologies. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Pagaya Technologies going out to 2026, and you can see them free on our platform here..

Even so, be aware that Pagaya Technologies is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.