Pagaya Technologies' Stock Drops 20% in September Amid Concerns Over Interest Rates
Shares of Pagaya Technologies (NASDAQ: PGY) fell by 20% in September, according to S&P Global Market Intelligence. The decline is attributed to investor concerns over the impact of high interest rates and bond market volatility on the company's credit evaluation business. Pagaya operates an AI-driven platform that helps lenders assess borrower risk more efficiently than traditional models. It partners with financial institutions like Visa (V), U.S. Bank (USB), and SoFi Technologies (SOFI) to approve loans, which are then sold as asset-backed securities (ABS). The company reported strong second-quarter results, including a 19% year-over-year revenue increase to $387 million and net income of $45 million. Despite its growth in auto loan volume and existing relationships with institutional investors, Pagaya faces challenges due to rising borrowing costs. Its fee revenue less production costs (FRLPC) margin decreased slightly by 0.61 percentage points to 4.2%.
Topics: AI in finance credit platform loan growth strategy stock performance