PENNYMAC FINANCIAL SERVICES (PFSI) Stock Fundamental Analysis
NYSE:PFSI - New York Stock Exchange, Inc. - US70932M1071 - Common Stock - Currency: USD
Taking everything into account, PFSI scores 4 out of 10 in our fundamental rating. PFSI was compared to 101 industry peers in the Financial Services industry. PFSI has a bad profitability rating. Also its financial health evaluation is rather negative. PFSI is not overvalued while it is showing excellent growth. This is an interesting combination.
1. Profitability
1.1 Basic Checks
PFSI had positive earnings in the past year.
In the past year PFSI has reported a negative cash flow from operations.
PFSI had positive earnings in each of the past 5 years.
The reported operating cash flow has been mixed in the past 5 years: PFSI reported negative operating cash flow in multiple years.
1.2 Ratios
PFSI has a Return On Assets (1.19%) which is comparable to the rest of the industry.
With a Return On Equity value of 8.13%, PFSI perfoms like the industry average, outperforming 43.56% of the companies in the same industry.
PFSI has a Return On Invested Capital (1.33%) which is in line with its industry peers.
PFSI had an Average Return On Invested Capital over the past 3 years of 2.11%. This is significantly below the industry average of 7.70%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.19% | ||
| ROE | 8.13% | ||
| ROIC | 1.33% |
ROA(3y)1.6%
ROA(5y)3.07%
ROE(3y)8.64%
ROE(5y)20.77%
ROIC(3y)2.11%
ROIC(5y)3.65%
1.3 Margins
With a Profit Margin value of 12.91%, PFSI perfoms like the industry average, outperforming 57.43% of the companies in the same industry.
PFSI's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 16.75%, PFSI is in line with its industry, outperforming 55.45% of the companies in the same industry.
In the last couple of years the Operating Margin of PFSI has declined.
PFSI's Gross Margin of 66.05% is amongst the best of the industry. PFSI outperforms 81.19% of its industry peers.
PFSI's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.75% | ||
| PM (TTM) | 12.91% | ||
| GM | 66.05% |
OM growth 3Y-24.14%
OM growth 5Y-11.84%
PM growth 3Y-22.94%
PM growth 5Y-11.12%
GM growth 3Y-9.47%
GM growth 5Y-5.46%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PFSI is destroying value.
PFSI has more shares outstanding than it did 1 year ago.
PFSI has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, PFSI has a worse debt to assets ratio.
2.2 Solvency
PFSI has an Altman-Z score of -0.03. This is a bad value and indicates that PFSI is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of PFSI (-0.03) is worse than 66.34% of its industry peers.
A Debt/Equity ratio of 3.59 is on the high side and indicates that PFSI has dependencies on debt financing.
PFSI has a worse Debt to Equity ratio (3.59) than 78.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.59 | ||
| Debt/FCF | N/A | ||
| Altman-Z | -0.03 |
ROIC/WACC0.16
WACC8.55%
2.3 Liquidity
PFSI has a Current Ratio of 0.03. This is a bad value and indicates that PFSI is not financially healthy enough and could expect problems in meeting its short term obligations.
PFSI's Current ratio of 0.03 is on the low side compared to the rest of the industry. PFSI is outperformed by 81.19% of its industry peers.
PFSI has a Quick Ratio of 0.03. This is a bad value and indicates that PFSI is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.03, PFSI is doing worse than 81.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.03 | ||
| Quick Ratio | 0.03 |
3. Growth
3.1 Past
PFSI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 179.70%, which is quite impressive.
The Earnings Per Share has been growing by 9.16% on average over the past years. This is quite good.
The Revenue has grown by 18.32% in the past year. This is quite good.
PFSI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.39% yearly.
EPS 1Y (TTM)179.7%
EPS 3Y-19.77%
EPS 5Y9.16%
EPS Q2Q%363.51%
Revenue 1Y (TTM)18.32%
Revenue growth 3Y-12.14%
Revenue growth 5Y7.39%
Sales Q2Q%29.89%
3.2 Future
The Earnings Per Share is expected to grow by 33.98% on average over the next years. This is a very strong growth
PFSI is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 20.33% yearly.
EPS Next Y72.48%
EPS Next 2Y45.04%
EPS Next 3Y33.98%
EPS Next 5YN/A
Revenue Next Year42.18%
Revenue Next 2Y27.51%
Revenue Next 3Y20.33%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 12.80, PFSI is valued correctly.
PFSI's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of PFSI to the average of the S&P500 Index (28.29), we can say PFSI is valued rather cheaply.
The Price/Forward Earnings ratio is 7.42, which indicates a rather cheap valuation of PFSI.
Based on the Price/Forward Earnings ratio, PFSI is valued a bit cheaper than 73.27% of the companies in the same industry.
PFSI is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.08, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.8 | ||
| Fwd PE | 7.42 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as PFSI.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 21.66 |
4.3 Compensation for Growth
PFSI's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PFSI's earnings are expected to grow with 33.98% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.18
PEG (5Y)1.4
EPS Next 2Y45.04%
EPS Next 3Y33.98%
5. Dividend
5.1 Amount
PFSI has a Yearly Dividend Yield of 1.24%.
PFSI's Dividend Yield is a higher than the industry average which is at 4.55.
Compared to an average S&P500 Dividend Yield of 2.52, PFSI's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
5.2 History
The dividend of PFSI is nicely growing with an annual growth rate of 52.53%!
PFSI has been paying a dividend for over 5 years, so it has already some track record.
The dividend of PFSI decreased in the last 3 years.
Dividend Growth(5Y)52.53%
Div Incr Years1
Div Non Decr Years2
5.3 Sustainability
16.75% of the earnings are spent on dividend by PFSI. This is a low number and sustainable payout ratio.
PFSI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP16.75%
EPS Next 2Y45.04%
EPS Next 3Y33.98%
97.06
+1.49 (+1.56%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners60.7%
Inst Owner Change0%
Ins Owners5.31%
Ins Owner Change-0.02%
Market Cap4.99B
Analysts81.43
Price Target128.26 (32.15%)
Short Float %4.54%
Short Ratio4.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
Yearly Dividend1.03
Dividend Growth(5Y)52.53%
DP16.75%
Div Incr Years1
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-47.41%
Min EPS beat(2)-56.05%
Max EPS beat(2)-38.77%
EPS beat(4)1
Avg EPS beat(4)-29.79%
Min EPS beat(4)-56.05%
Max EPS beat(4)5.33%
EPS beat(8)2
Avg EPS beat(8)-42.44%
EPS beat(12)5
Avg EPS beat(12)-11.68%
EPS beat(16)6
Avg EPS beat(16)-11.21%
Revenue beat(2)0
Avg Revenue beat(2)-16.41%
Min Revenue beat(2)-21.05%
Max Revenue beat(2)-11.77%
Revenue beat(4)0
Avg Revenue beat(4)-19.54%
Min Revenue beat(4)-30.7%
Max Revenue beat(4)-11.77%
Revenue beat(8)0
Avg Revenue beat(8)-15.69%
Revenue beat(12)4
Avg Revenue beat(12)-2.78%
Revenue beat(16)8
Avg Revenue beat(16)-1.21%
PT rev (1m)0%
PT rev (3m)0.78%
EPS NQ rev (1m)0.77%
EPS NQ rev (3m)-9.09%
EPS NY rev (1m)-0.64%
EPS NY rev (3m)-7.78%
Revenue NQ rev (1m)-1.1%
Revenue NQ rev (3m)-2.07%
Revenue NY rev (1m)-0.5%
Revenue NY rev (3m)-0.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.8 | ||
| Fwd PE | 7.42 | ||
| P/S | 2.07 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.3 | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.66 |
EPS(TTM)7.58
EY7.81%
EPS(NY)13.07
Fwd EY13.47%
FCF(TTM)-88.57
FCFYN/A
OCF(TTM)-88.14
OCFYN/A
SpS46.92
BVpS74.46
TBVpS-95.56
PEG (NY)0.18
PEG (5Y)1.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.19% | ||
| ROE | 8.13% | ||
| ROCE | 2.76% | ||
| ROIC | 1.33% | ||
| ROICexc | 1.34% | ||
| ROICexgc | 4.32% | ||
| OM | 16.75% | ||
| PM (TTM) | 12.91% | ||
| GM | 66.05% | ||
| FCFM | N/A |
ROA(3y)1.6%
ROA(5y)3.07%
ROE(3y)8.64%
ROE(5y)20.77%
ROIC(3y)2.11%
ROIC(5y)3.65%
ROICexc(3y)2.25%
ROICexc(5y)3.78%
ROICexgc(3y)12.97%
ROICexgc(5y)13.6%
ROCE(3y)3.67%
ROCE(5y)7.27%
ROICexcg growth 3Y-29.91%
ROICexcg growth 5Y-15.07%
ROICexc growth 3Y-40.2%
ROICexc growth 5Y-21.69%
OM growth 3Y-24.14%
OM growth 5Y-11.84%
PM growth 3Y-22.94%
PM growth 5Y-11.12%
GM growth 3Y-9.47%
GM growth 5Y-5.46%
F-Score3
Asset Turnover0.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.59 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 29.87 | ||
| Cap/Depr | 39.47% | ||
| Cap/Sales | 0.92% | ||
| Interest Coverage | 0.51 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.03 | ||
| Quick Ratio | 0.03 | ||
| Altman-Z | -0.03 |
F-Score3
WACC8.55%
ROIC/WACC0.16
Cap/Depr(3y)116.34%
Cap/Depr(5y)175.37%
Cap/Sales(3y)2.09%
Cap/Sales(5y)2%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)179.7%
EPS 3Y-19.77%
EPS 5Y9.16%
EPS Q2Q%363.51%
EPS Next Y72.48%
EPS Next 2Y45.04%
EPS Next 3Y33.98%
EPS Next 5YN/A
Revenue 1Y (TTM)18.32%
Revenue growth 3Y-12.14%
Revenue growth 5Y7.39%
Sales Q2Q%29.89%
Revenue Next Year42.18%
Revenue Next 2Y27.51%
Revenue Next 3Y20.33%
Revenue Next 5YN/A
EBIT growth 1Y16.7%
EBIT growth 3Y-33.35%
EBIT growth 5Y-5.33%
EBIT Next Year115.33%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-181.47%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-186.51%
OCF growth 3YN/A
OCF growth 5YN/A