Pagaya Technologies (NASDAQ:PGY) shareholders are up 20% this past week, but still in the red over the last year

It is doubtless a positive to see that the Pagaya Technologies Ltd. (NASDAQ:PGY) share price has gained some 44% in the last three months. But that doesn't change the fact that the returns over the last year have been stomach churning. Indeed, the share price is down a whopping 73% in the last year. So it's not that amazing to see a bit of a bounce. Only time will tell if the company can sustain the turnaround.

On a more encouraging note the company has added US$169m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

See our latest analysis for Pagaya Technologies

Because Pagaya Technologies made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last twelve months, Pagaya Technologies increased its revenue by 38%. We think that is pretty nice growth. Unfortunately, the market wanted something better, given it sent the share price 73% lower during the year. It could be that the losses are too much for investors to handle without losing their nerve. We'd posit that the future looks challenging, given the disconnect between revenue growth and the share price.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

This free interactive report on Pagaya Technologies' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Given that the market gained 14% in the last year, Pagaya Technologies shareholders might be miffed that they lost 73%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's great to see a nice little 44% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Pagaya Technologies is showing 2 warning signs in our investment analysis , you should know about...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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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.