The primary catalyst for the decline was a cautious first-quarter revenue forecast, which Pagaya estimates will fall between $315 million and $335 million. This range sits notably below the $346.7 million consensus anticipated by analysts, according to FactSet data. Profitability metrics for the upcoming quarter also faced downward pressure, with Pagaya projecting adjusted EBITDA between $80 million and $95 million, missing the $101.7 million market forecast.

Conservative Projections Weigh on Growth

The fintech firm’s conservative stance extends through the 2024 fiscal year. Pagaya expects total revenue to land between $1.4 billion and $1.58 billion, while analysts had projected a more optimistic $1.53 billion. The company also anticipates full-year net income to range from $100 million to $150 million, alongside adjusted EBITDA between $410 million and $460 million, both of which largely trail existing market expectations.

The disappointing outlook overshadowed a quarter where the company successfully returned to profitability. For the fourth quarter, Pagaya reported net income of $34.3 million, or 36 cents per share, a significant recovery from the $237.9 million loss recorded during the same period last year. However, revenue for the quarter reached only $334.8 million, missing the $349.4 million target expected by Wall Street and landing at the bottom of the company's previous guidance range.