Fintech Pagaya rises after Jefferies starts coverage with "buy" rating

Investing.com -- Shares in Pagaya Technologies (NASDAQ:PGY) jumped in U.S. premarket trading on Thursday after analysts at Jefferies initiated coverage of the fintech group with a "buy" rating.

Israel-based Pagaya uses artificial intelligence-driven technology to provide real-time customer credit assessments to clients like banks, insurers, pension funds and asset managers.

In a note to clients, the broker said that the firm's product creates a "powerful network effect" that has positioned it for ongoing success. The Jefferies analysts assigned Pagaya a price target of $1.39.

"Pagaya has significant growth potential through: [...] increased penetration of current clients, [...] ongoing additions of lending platforms, [...] continued market share aggregation, and [...] increased conversion rates," the Jefferies analysts said.

Earlier this week, Pagaya announced that it had partnered with Exeter Finance, an auto finance business that has a serviced portfolio worth over $9.4 billion.

Pagaya said Exeter became the 29th partner to join its network, which includes other financial institutions such as SoFi (NASDAQ:SOFI), Klarna and Upgrade.

The company was valued at $8.5B when it went public through a merger with special-acquisition vehicle EJF Acquisition Corp that was completed in 2022.