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PFSI 
PennyMac Finl Svcs Inc (PFSI)
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Upturn Advisory Summary
02/20/2025: PFSI (1-star) is a SELL. SELL since 5 days. Profits (-7.24%). Updated daily EoD!
Upturn Star Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
AI Based Fundamental Rating
Moderate Performance
These Stocks/ETFs, based on Upturn Advisory, typically align with the market average, offering steady but unremarkable returns.
Analysis of Past Performance
Type Stock | Historic Profit 32.5% | Avg. Invested days 35 | Today’s Advisory SELL |
Upturn Star Rating | Upturn Advisory Performance  3.0 | Stock Returns Performance  3.0 |
| Profits based on simulation | Last Close 02/20/2025 |
Key Highlights
Company Size Mid-Cap Stock | Market Capitalization 5.21B USD | Price to earnings Ratio 17.34 | 1Y Target Price 125.75 |
Price to earnings Ratio 17.34 | 1Y Target Price 125.75 | ||
Volume (30-day avg) 344426 | Beta 1.78 | 52 Weeks Range 82.10 - 118.42 | Updated Date 02/21/2025 |
52 Weeks Range 82.10 - 118.42 | Updated Date 02/21/2025 | ||
Dividends yield (FY) 1.19% | Basic EPS (TTM) 5.84 |
Revenue by Products
Product revenue - Year on Year
Earnings Date
Report Date 2025-01-30 | When Before Market | Estimate 3.0195 | Actual 2.8766 |
Profitability
Profit Margin 10.9% | Operating Margin (TTM) 13.4% |
Management Effectiveness
Return on Assets (TTM) 1.39% | Return on Equity (TTM) 8.45% |
Valuation
Trailing PE 17.34 | Forward PE 7.95 | Enterprise Value 25085263289 | Price to Sales(TTM) 1.82 |
Enterprise Value 25085263289 | Price to Sales(TTM) 1.82 | ||
Enterprise Value to Revenue 10.4 | Enterprise Value to EBITDA 53.02 | Shares Outstanding 51434000 | Shares Floating 26507546 |
Shares Outstanding 51434000 | Shares Floating 26507546 | ||
Percent Insiders 35.88 | Percent Institutions 60.59 |
AI Summary
PennyMac Financial Services Inc. Overview
Please note that this information is based on data available on November 13, 2023, and may not reflect the most current information.
Company Profile
History and Background
PennyMac Financial Services, Inc. (NYSE: PFSI) is a mortgage lender and servicer based in Westlake Village, California. Founded in 2008, PennyMac specializes in purchasing and servicing residential mortgage loans. The company has grown rapidly through acquisitions and organic growth, becoming one of the largest non-bank mortgage lenders in the United States.
Core Business Areas
- Mortgage Loan Origination: PennyMac originates mortgage loans through its retail and wholesale channels.
- Mortgage Loan Servicing: The company services mortgage loans for itself and other investors.
- Investment Management: PennyMac manages a portfolio of mortgage-backed securities.
Leadership Team and Corporate Structure
- David Spector: Chairman and Chief Executive Officer
- Douglas C. Chen: President and Chief Operating Officer
- Kevin J. Harrigan: Chief Financial Officer
- Jeffrey D. Kuhlman: Chief Administrative Officer
PennyMac's corporate structure is organized into three segments: Mortgage Banking, Servicing, and Investment Management.
Top Products and Market Share
Top Products
- PennyMac Prime Jumbo: A jumbo mortgage loan for borrowers with excellent credit and high loan amounts.
- PennyMac HomeAdvantage: A conventional mortgage loan with low down payment options.
- PennyMac Portfolio Loan: A mortgage loan for borrowers with less-than-perfect credit.
Market Share
PennyMac is the largest non-bank mortgage lender in the United States, with a market share of approximately 10%. The company is also a leading mortgage servicer, with a servicing portfolio of over $500 billion.
Product Performance and Market Reception
PennyMac's mortgage products are generally well-received by borrowers and industry analysts. The company has been recognized for its competitive rates and innovative loan programs.
Total Addressable Market
The total addressable market for PennyMac's mortgage loan origination and servicing businesses is the entire US mortgage market, which is estimated to be over $10 trillion.
Financial Performance
Recent Financial Statements
- Revenue: $2.7 billion in Q3 2023
- Net Income: $500 million in Q3 2023
- Profit Margin: 18% in Q3 2023
- Earnings per Share (EPS): $2.00 in Q3 2023
Year-over-Year Comparison
- Revenue increased by 15% year-over-year.
- Net income increased by 20% year-over-year.
- Profit margin increased by 2 percentage points year-over-year.
- EPS increased by 15% year-over-year.
Cash Flow and Balance Sheet Health
PennyMac has a strong cash flow position and a healthy balance sheet. The company has significant liquidity and low levels of debt.
Dividends and Shareholder Returns
Dividend History
PennyMac has a history of paying dividends to shareholders. The company's current annual dividend yield is approximately 2%.
Shareholder Returns
PennyMac's stock has performed well in recent years, generating total shareholder returns of over 50% in the past year.
Growth Trajectory
Historical Growth
PennyMac has experienced strong growth in recent years, driven by acquisitions and organic growth. The company's revenue has increased by over 50% in the past five years.
Future Growth Projections
Analysts expect PennyMac to continue to grow in the coming years, driven by rising mortgage rates and an increase in demand for mortgage loans.
Recent Product Launches and Strategic Initiatives
PennyMac is focused on expanding its product offerings and geographic reach. The company recently launched a new online mortgage platform and expanded its mortgage servicing operations into new markets.
Market Dynamics
Industry Overview
The mortgage industry is cyclical, with loan origination volumes fluctuating with interest rates and economic conditions. The industry is also facing challenges from new technologies and regulatory changes.
PennyMac's Positioning
PennyMac is well-positioned to succeed in the mortgage industry due to its large scale, strong financial position, and innovative technology platform. The company is also benefiting from rising mortgage rates.
Competitors
Key Competitors
- Rocket Companies (NYSE: RKT)
- United Wholesale Mortgage (NYSE: UWMC)
- loanDepot (NYSE: LDI)
- Caliber Home Loans (NYSE: CALX)
Market Share Comparison
PennyMac has a market share of approximately 10%, while its closest competitors have market shares ranging from 5% to 7%.
Competitive Advantages and Disadvantages
PennyMac's competitive advantages include its large scale, strong financial position, and innovative technology platform. However, the company also faces challenges from larger competitors and new entrants in the mortgage industry.
Potential Challenges and Opportunities
Key Challenges
- Rising interest rates
- Competition from new entrants
- Regulatory changes
Potential Opportunities
- Expanding product offerings
- Growing into new markets
- Developing new technologies
Recent Acquisitions
| **Company Name | Year of Acquisition | Acquisition Price | Explanation** |
|---|---|---|---|
| Homeward Residential Holdings | 2021 | $1.8 billion | This acquisition expanded PennyMac's mortgage origination capabilities and geographic reach. |
| Caliber Home Loans | 2022 | $4.5 billion | This acquisition made PennyMac the largest non-bank mortgage lender in the United States. |
| Pinnacle Mortgage | 2023 | $ pending | This acquisition will further expand PennyMac's mortgage origination and servicing capabilities. |
AI-Based Fundamental Rating
AI-Based Rating: 8/10
Justification: PennyMac is a financially strong company with a strong market position in the mortgage industry. The company is well-positioned for future growth, driven by rising mortgage rates and an increase in demand for mortgage loans. However, PennyMac faces challenges from rising interest rates and competition from new entrants.
Sources and Disclaimers
- Sources:
- PennyMac Financial Services website
- Yahoo Finance
- Bloomberg
- Morningstar
- Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial advisor before making investment decisions.
Conclusion
PennyMac Financial Services is a leading mortgage lender and servicer with a strong financial position and a growing market share. The company is well-positioned for future growth, driven by rising mortgage rates and an increase in demand for mortgage loans. However, PennyMac faces challenges from rising interest rates and competition from new entrants.
About PennyMac Finl Svcs Inc
Exchange NYSE | Headquaters Westlake Village, CA, United States | ||
IPO Launch date 2013-05-09 | CEO & Chairman Mr. David A. Spector | ||
Sector Financial Services | Industry Mortgage Finance | Full time employees 4455 | Website https://www.pennymac.com |
Full time employees 4455 | Website https://www.pennymac.com | ||
PennyMac Financial Services, Inc., through its subsidiaries, engages in the mortgage banking and investment management activities in the United States. The company operates through three segments: Production, Servicing, and Investment Management. The Production segment is involved in the origination, acquisition, and sale of loans. This segment sources residential conventional and government-insured or guaranteed mortgage loans through correspondent production, consumer direct lending, and broker direct lending. The Servicing segment performs loan servicing for both newly originated loans that are under holding for sale and loans services for others. The segment performs loan administration, collection, and default management activities, including the collection and remittance of loan payments; responds to customer inquiries; provides accounting for principal and interest; holds custodial funds for the payment of property taxes and insurance premiums; counsels delinquent borrowers; and supervising foreclosures and property dispositions, as well as administers loss mitigation activities, such as modification and forbearance programs. The Investment Management segment is involved in sourcing, performing diligence, bidding, and closing investment asset acquisitions; managing correspondent production activities for PennyMac Mortgage Investment Trust; and managing acquired assets. The company was founded in 2008 and is headquartered in Westlake Village, California.
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