There's been a major selloff in Pagaya Technologies Ltd. (NASDAQ:PGY) shares in the week since it released its third-quarter report, with the stock down 27% to US$9.47. Revenues were in line with expectations, at US$257m, while statutory losses ballooned to US$0.93 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, the most recent consensus for Pagaya Technologies from eight analysts is for revenues of US$1.16b in 2025. If met, it would imply a meaningful 20% increase on its revenue over the past 12 months. Earnings are expected to improve, with Pagaya Technologies forecast to report a statutory profit of US$0.44 per share. In the lead-up to this report, the analysts had been modelling 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 nice increase 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. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Pagaya Technologies analyst has a price target of US$36.00 per share, while the most pessimistic values it at US$11.00. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. 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. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% per year. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. 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..

You should always think about risks though.

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.