PENNYMAC FINANCIAL SERVICES (PFSI) Stock Fundamental Analysis
NYSE:PFSI - New York Stock Exchange, Inc. - US70932M1071 - Common Stock
Overall PFSI gets a fundamental rating of 4 out of 10. We evaluated PFSI against 101 industry peers in the Financial Services industry. Both the profitability and financial health of PFSI have multiple concerns. PFSI is not priced too expensively while it is growing strongly. Keep and eye on this one!
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.
Each year in the past 5 years PFSI has been profitable.
In multiple years PFSI reported negative operating cash flow during the last 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.74%, PFSI is doing worse than 62.38% of the companies in the same industry.
PFSI has a Return On Equity (4.55%) which is in line with its industry peers.
PFSI's Return On Invested Capital of 1.34% is in line compared to the rest of the industry. PFSI outperforms 44.55% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PFSI is below the industry average of 7.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.74% | ||
| ROE | 4.55% | ||
| ROIC | 1.34% |
ROA(3y)2.98%
ROA(5y)3.6%
ROE(3y)15.72%
ROE(5y)22.96%
ROIC(3y)3.56%
ROIC(5y)4.1%
1.3 Margins
PFSI's Profit Margin of 7.57% is in line compared to the rest of the industry. PFSI outperforms 40.59% of its industry peers.
In the last couple of years the Profit Margin of PFSI has declined.
Looking at the Operating Margin, with a value of 16.99%, PFSI is in the better half of the industry, outperforming 60.40% of the companies in the same industry.
In the last couple of years the Operating Margin of PFSI has declined.
PFSI has a better Gross Margin (66.10%) than 79.21% of its industry peers.
PFSI's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.99% | ||
| PM (TTM) | 7.57% | ||
| GM | 66.1% |
OM growth 3Y-33.08%
OM growth 5Y-6.45%
PM growth 3Y-44.46%
PM growth 5Y-1.8%
GM growth 3Y-9.65%
GM growth 5Y-4.65%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PFSI is destroying value.
The number of shares outstanding for PFSI has been increased compared to 1 year ago.
Compared to 5 years ago, PFSI has less shares outstanding
The debt/assets ratio for PFSI is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.11, we must say that PFSI is in the distress zone and has some risk of bankruptcy.
PFSI has a Altman-Z score of 0.11. This is in the lower half of the industry: PFSI underperforms 65.35% of its industry peers.
PFSI has a Debt/Equity ratio of 3.21. This is a high value indicating a heavy dependency on external financing.
PFSI has a Debt to Equity ratio of 3.21. This is in the lower half of the industry: PFSI underperforms 78.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.21 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.11 |
ROIC/WACC0.16
WACC8.54%
2.3 Liquidity
A Current Ratio of 0.03 indicates that PFSI may have some problems paying its short term obligations.
With a Current ratio value of 0.03, PFSI is not doing good in the industry: 83.17% of the companies in the same industry are doing better.
A Quick Ratio of 0.03 indicates that PFSI may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.03, PFSI is doing worse than 83.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.03 | ||
| Quick Ratio | 0.03 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 17.55% over the past year.
The Earnings Per Share has been growing slightly by 1.07% on average over the past years.
The Revenue has grown by 15.16% in the past year. This is quite good.
Measured over the past years, PFSI shows a quite strong growth in Revenue. The Revenue has been growing by 12.55% on average per year.
EPS 1Y (TTM)17.55%
EPS 3Y-49.56%
EPS 5Y1.07%
EPS Q2Q%-26.55%
Revenue 1Y (TTM)15.16%
Revenue growth 3Y-19.96%
Revenue growth 5Y12.55%
Sales Q2Q%2.88%
3.2 Future
Based on estimates for the next years, PFSI will show a very strong growth in Earnings Per Share. The EPS will grow by 58.90% on average per year.
Based on estimates for the next years, PFSI will show a very strong growth in Revenue. The Revenue will grow by 21.45% on average per year.
EPS Next Y169.77%
EPS Next 2Y128.72%
EPS Next 3Y81.19%
EPS Next 5Y58.9%
Revenue Next Year16.81%
Revenue Next 2Y27.06%
Revenue Next 3Y22.72%
Revenue Next 5Y21.45%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 22.31, which indicates a rather expensive current valuation of PFSI.
Compared to the rest of the industry, the Price/Earnings ratio of PFSI is on the same level as its industry peers.
PFSI is valuated rather cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 7.69 indicates a rather cheap valuation of PFSI.
Based on the Price/Forward Earnings ratio, PFSI is valued a bit cheaper than 77.23% of the companies in the same industry.
PFSI is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.31 | ||
| Fwd PE | 7.69 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PFSI is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 23.55 |
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.
A more expensive valuation may be justified as PFSI's earnings are expected to grow with 81.19% in the coming years.
PEG (NY)0.13
PEG (5Y)20.91
EPS Next 2Y128.72%
EPS Next 3Y81.19%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.13%, PFSI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.66, PFSI pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.13, PFSI pays less dividend than the S&P500 average, which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.13% |
5.2 History
On average, the dividend of PFSI grows each year by 32.84%, which is quite nice.
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)32.84%
Div Incr Years1
Div Non Decr Years2
5.3 Sustainability
27.48% of the earnings are spent on dividend by PFSI. This is a low number and sustainable payout ratio.
The dividend of PFSI is growing, but earnings are growing more, so the dividend growth is sustainable.
DP27.48%
EPS Next 2Y128.72%
EPS Next 3Y81.19%
PENNYMAC FINANCIAL SERVICES
NYSE:PFSI (1/22/2025, 9:48:13 AM)
109.075
+0.31 (+0.29%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners58.82%
Inst Owner Change-0.01%
Ins Owners5.34%
Ins Owner Change-0.08%
Market Cap5.59B
Analysts81.25
Price Target127.27 (16.68%)
Short Float %3.22%
Short Ratio3.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.13% |
Yearly Dividend0.83
Dividend Growth(5Y)32.84%
DP27.48%
Div Incr Years1
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-42.86%
Min EPS beat(2)-56.05%
Max EPS beat(2)-29.68%
EPS beat(4)1
Avg EPS beat(4)-57.24%
Min EPS beat(4)-148.58%
Max EPS beat(4)5.33%
EPS beat(8)2
Avg EPS beat(8)-41.9%
EPS beat(12)5
Avg EPS beat(12)-10.4%
EPS beat(16)6
Avg EPS beat(16)-8.86%
Revenue beat(2)0
Avg Revenue beat(2)-17.86%
Min Revenue beat(2)-21.05%
Max Revenue beat(2)-14.66%
Revenue beat(4)0
Avg Revenue beat(4)-20.04%
Min Revenue beat(4)-30.7%
Max Revenue beat(4)-13.76%
Revenue beat(8)1
Avg Revenue beat(8)-11.1%
Revenue beat(12)5
Avg Revenue beat(12)-1.76%
Revenue beat(16)9
Avg Revenue beat(16)0%
PT rev (1m)0.36%
PT rev (3m)8.4%
EPS NQ rev (1m)0%
EPS NQ rev (3m)15.16%
EPS NY rev (1m)0%
EPS NY rev (3m)-12.12%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)7.81%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)-2.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.31 | ||
| Fwd PE | 7.69 | ||
| P/S | 2.49 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.5 | ||
| P/tB | N/A | ||
| EV/EBITDA | 23.55 |
EPS(TTM)4.89
EY4.48%
EPS(NY)14.18
Fwd EY13%
FCF(TTM)-38.56
FCFYN/A
OCF(TTM)-38.12
OCFYN/A
SpS43.84
BVpS72.95
TBVpS-78.29
PEG (NY)0.13
PEG (5Y)20.91
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.74% | ||
| ROE | 4.55% | ||
| ROCE | 2.69% | ||
| ROIC | 1.34% | ||
| ROICexc | 1.35% | ||
| ROICexgc | 4.23% | ||
| OM | 16.99% | ||
| PM (TTM) | 7.57% | ||
| GM | 66.1% | ||
| FCFM | N/A |
ROA(3y)2.98%
ROA(5y)3.6%
ROE(3y)15.72%
ROE(5y)22.96%
ROIC(3y)3.56%
ROIC(5y)4.1%
ROICexc(3y)3.73%
ROICexc(5y)4.25%
ROICexgc(3y)15.14%
ROICexgc(5y)14.14%
ROCE(3y)7.48%
ROCE(5y)8.98%
ROICexcg growth 3Y-16.13%
ROICexcg growth 5Y-1.32%
ROICexc growth 3Y-34.29%
ROICexc growth 5Y-11.95%
OM growth 3Y-33.08%
OM growth 5Y-6.45%
PM growth 3Y-44.46%
PM growth 5Y-1.8%
GM growth 3Y-9.65%
GM growth 5Y-4.65%
F-Score2
Asset Turnover0.1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.21 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 27.41 | ||
| Cap/Depr | 39.34% | ||
| Cap/Sales | 0.99% | ||
| Interest Coverage | 0.51 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.03 | ||
| Quick Ratio | 0.03 | ||
| Altman-Z | 0.11 |
F-Score2
WACC8.54%
ROIC/WACC0.16
Cap/Depr(3y)169.5%
Cap/Depr(5y)518.15%
Cap/Sales(3y)2.32%
Cap/Sales(5y)4.93%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)17.55%
EPS 3Y-49.56%
EPS 5Y1.07%
EPS Q2Q%-26.55%
EPS Next Y169.77%
EPS Next 2Y128.72%
EPS Next 3Y81.19%
EPS Next 5Y58.9%
Revenue 1Y (TTM)15.16%
Revenue growth 3Y-19.96%
Revenue growth 5Y12.55%
Sales Q2Q%2.88%
Revenue Next Year16.81%
Revenue Next 2Y27.06%
Revenue Next 3Y22.72%
Revenue Next 5Y21.45%
EBIT growth 1Y24.95%
EBIT growth 3Y-46.43%
EBIT growth 5Y5.3%
EBIT Next Year139.27%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-137.65%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-136.62%
OCF growth 3YN/A
OCF growth 5YN/A