Runway Growth Finance (NASDAQ:RWAY) & Pagaya Technologies (NASDAQ:PGY) Head to Head Comparison

Pagaya Technologies (NASDAQ:PGY) and Runway Growth Finance (NASDAQ:RWAY) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.

Profitability

This table compares Pagaya Technologies and Runway Growth Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pagaya Technologies	-14.58%	-3.10%	-1.55%
Runway Growth Finance	19.32%	13.67%	6.97%

Analyst Recommendations

This is a summary of current recommendations and price targets for Pagaya Technologies and Runway Growth Finance, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pagaya Technologies	0	2	7	0	2.78
Runway Growth Finance	0	6	2	0	2.25

Pagaya Technologies currently has a consensus price target of $22.89, indicating a potential upside of 56.56%. Runway Growth Finance has a consensus price target of $11.79, indicating a potential upside of 11.77%. Given Pagaya Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe Pagaya Technologies is more favorable than Runway Growth Finance.

Insider and Institutional Ownership

57.1% of Pagaya Technologies shares are owned by institutional investors. Comparatively, 64.6% of Runway Growth Finance shares are owned by institutional investors. 19.7% of Pagaya Technologies shares are owned by insiders. Comparatively, 1.5% of Runway Growth Finance shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Pagaya Technologies and Runway Growth Finance”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pagaya Technologies	$891.47 million	1.18	-$128.44 million	($1.97)	-7.42
Runway Growth Finance	$164.21 million	2.48	$44.34 million	$0.76	13.88

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

Volatility & Risk

Pagaya Technologies has a beta of 6.33, indicating that its stock price is 533% more volatile than the S&P 500. Comparatively, Runway Growth Finance has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Summary

Runway Growth Finance beats Pagaya Technologies on 8 of the 14 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 Runway Growth Finance

Runway Growth Finance Corp. is a business development company specializing investments in senior-secured loans to late stage and growth companies. It prefers to make investments in companies engaged in the technology, life sciences, healthcare and information services, business services and select consumer services and products sectors. It prefers to investments in companies engaged in electronic equipment and instruments, systems software, hardware, storage and peripherals and specialized consumer services, application software, healthcare technology, internet software and services, data processing and outsourced services, internet retail, human resources and employment services, biotechnology, healthcare equipment and education services. It invests in senior secured loans between $10 million and $75 million.