Critical Survey: i3 Verticals (NASDAQ:IIIV) versus Pagaya Technologies (NASDAQ:PGY)

Pagaya Technologies (NASDAQ:PGY) and i3 Verticals (NASDAQ:IIIV) are both small-cap technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, earnings, risk, profitability, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of recent ratings and price targets for Pagaya Technologies and i3 Verticals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pagaya Technologies	0	2	8	2	3.00
i3 Verticals	1	3	3	0	2.29

Pagaya Technologies currently has a consensus price target of $31.12, indicating a potential upside of 74.66%. i3 Verticals has a consensus price target of $25.40, indicating a potential upside of 58.45%. Given Pagaya Technologies’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Pagaya Technologies is more favorable than i3 Verticals.

Volatility and Risk

Pagaya Technologies has a beta of 5.5, indicating that its share price is 450% more volatile than the S&P 500. Comparatively, i3 Verticals has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Profitability

This table compares Pagaya Technologies and i3 Verticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pagaya Technologies	9.12%	51.56%	19.01%
i3 Verticals	4.24%	4.49%	3.31%

Institutional and Insider Ownership

57.1% of Pagaya Technologies shares are held by institutional investors. Comparatively, 84.2% of i3 Verticals shares are held by institutional investors. 42.0% of Pagaya Technologies shares are held by insiders. Comparatively, 60.1% of i3 Verticals shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Pagaya Technologies and i3 Verticals”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pagaya Technologies	$1.30 billion	1.14	$81.39 million	$1.36	13.10
i3 Verticals	$213.16 million	1.98	$17.87 million	$0.38	42.18

Pagaya Technologies has higher revenue and earnings than i3 Verticals. Pagaya Technologies is trading at a lower price-to-earnings ratio than i3 Verticals, indicating that it is currently the more affordable of the two stocks.

Summary

Pagaya Technologies beats i3 Verticals on 11 of the 15 factors compared between the two stocks.

About Pagaya Technologies

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. The company develops and implements proprietary artificial intelligence technology and related software solutions to assist partners to originate loans and other assets. Its partners include high-growth financial technology companies, incumbent banks and financial institutions, auto finance providers, and residential real estate service providers. Pagaya Technologies Ltd. was incorporated in 2016 and is headquartered in New York, New York.

About i3 Verticals

i3 Verticals, Inc. provides integrated payment and software solutions primarily to the public sector and healthcare markets in the United States. It operates in two segments, Software and Services, and Merchant Services. The company offers payment processing services that enables upper and lower court case management, collections, finance and accounting, motor vehicle and carrier registration, e-filing and taxation, license plate inventory, property tax management, utility billing, professional licensing, document workflow, and law enforcement software; assists public schools in completing payment processing functions, including accepting payments for online or at school lunches, and school activities. It also provides software platforms, such as electronic healthcare records and revenue cycle management solutions; insurance adjudication, patient engagement platforms, billing, scheduling, and integrated payments solutions; and workflow software and associated professional services to medical insurance payers. In addition, the company engages in software licenses and subscriptions, transaction-based fees, ongoing software maintenance and support, and other software-related solutions; and payment processing and gateway fees, as well as other related fixed transaction or service fees. Further, it sells equipment, and offers non-software related professional services. The company offers its solutions to clients through direct sales force; distribution partners comprising independent software vendors, independent sales organizations, and value-added resellers. i3 Verticals, Inc. was founded in 2012 and is headquartered in Nashville, Tennessee.