Pagaya Partners with Achieve to Expand Personal Loan Access, Reinforcing Growth Amid Persistent Risks

What happened

Pagaya Technologies announced a partnership with Achieve, a digital personal finance company, to leverage its AI credit-decisioning technology for personal loans, aiming to broaden consumer access. This aligns with Pagaya's strategy to grow its partner network and increase Network Volume, a key metric that showed improvement in recent quarters with FRLPC rising to 5.0% in Q3 2025. However, the DeepValue report highlights significant partner concentration risk, where a limited number of partners drive most revenue, and this new deal could exacerbate that dependency if Achieve scales rapidly. The partnership does not address Pagaya's high leverage, with net debt/EBITDA at 7.3x, and its reliance on volatile ABS funding markets, which are critical for growth but subject to credit cycles. While the announcement supports short-term expansion, it underscores the ongoing need for diversification and risk management in Pagaya's business model.

Implication

For investors, the partnership with Achieve could drive higher Network Volume and fee revenue, potentially supporting Pagaya's stock price if it translates into sustained FRLPC growth. However, it adds another partner to a base already flagged for concentration risk, increasing vulnerability if Achieve underperforms or scales back, as noted in the report's key risks. Pagaya's dependence on ABS funding remains unchanged, meaning any stress in credit markets could hinder growth despite new partnerships, aligning with the report's emphasis on funding access. Investors should watch for quarterly updates on this partnership's contribution to volumes and any signs of credit performance issues or regulatory scrutiny, which are critical invalidation triggers. Overall, while positive for growth, this news reinforces the cautious "POTENTIAL BUY" thesis, highlighting that execution and risk mitigation are more important than partnership announcements.

Thesis delta

The partnership with Achieve reinforces Pagaya's growth trajectory by expanding its AI underwriting network, which could enhance network effects and support the DCF-based upside of 24%. However, it does not materially shift the core investment thesis, as risks like high leverage, ABS funding dependence, and partner concentration remain unchanged, maintaining the "POTENTIAL BUY" rating contingent on continued execution and monitoring of watch items.