Pagaya Technologies Ltd. (NASDAQ:PGY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Pagaya Technologies Ltd., a product-focused technology company, deploys data science and proprietary artificial intelligence-powered technology for financial institutions and investors in the United States, Israel, the Cayman Islands, and internationally. With the latest financial year loss of US$128m and a trailing-twelve-month loss of US$132m, the US$901m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Pagaya Technologies' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

According to the 8 industry analysts covering Pagaya Technologies, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$13m in 2025. Therefore, the company is expected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 123%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Pagaya Technologies given that this is a high-level summary, though, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there's one issue worth mentioning. Pagaya Technologies currently has a relatively high level of debt. Typically, debt shouldn't exceed 40% of your equity, which in Pagaya Technologies' case is 92%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Pagaya Technologies, so if you are interested in understanding the company at a deeper level, take a look at Pagaya Technologies' company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:

1. Valuation: What is Pagaya Technologies worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Pagaya Technologies is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Pagaya Technologies's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.