PENNYMAC FINANCIAL SERVICES (PFSI) Stock Fundamental Analysis
NYSE:PFSI - New York Stock Exchange, Inc. - US70932M1071 - Common Stock - Currency: USD
PFSI gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 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.
PFSI had a negative operating cash flow in the past year.
In the past 5 years PFSI has always been profitable.
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's Return On Assets of 0.74% is on the low side compared to the rest of the industry. PFSI is outperformed by 62.38% of its industry peers.
With a Return On Equity value of 4.55%, PFSI is not doing good in the industry: 61.39% of the companies in the same industry are doing better.
PFSI has a Return On Invested Capital (1.40%) which is in line with its industry peers.
PFSI had an Average Return On Invested Capital over the past 3 years of 2.09%. This is significantly below the industry average of 7.75%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.74% | ||
| ROE | 4.55% | ||
| ROIC | 1.4% |
ROA(3y)1.6%
ROA(5y)3.07%
ROE(3y)8.64%
ROE(5y)20.77%
ROIC(3y)2.09%
ROIC(5y)3.64%
1.3 Margins
PFSI has a worse Profit Margin (7.57%) than 61.39% of its industry peers.
In the last couple of years the Profit Margin of PFSI has declined.
PFSI has a Operating Margin (16.99%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of PFSI has declined.
The Gross Margin of PFSI (66.10%) is better 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-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.
The number of shares outstanding for PFSI has been increased compared to 1 year ago.
The number of shares outstanding for PFSI has been reduced compared to 5 years ago.
The debt/assets ratio for PFSI is higher compared to a year ago.
2.2 Solvency
PFSI has an Altman-Z score of 0.10. This is a bad value and indicates that PFSI is not financially healthy and even has some risk of bankruptcy.
PFSI's Altman-Z score of 0.10 is on the low side compared to the rest of the industry. PFSI is outperformed by 64.36% 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's Debt to Equity ratio of 3.21 is on the low side compared to the rest of the industry. PFSI is outperformed by 78.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.21 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.1 |
ROIC/WACC0.14
WACC10.1%
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: 82.18% 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.
PFSI's Quick ratio of 0.03 is on the low side compared to the rest of the industry. PFSI is outperformed by 82.18% of its industry peers.
| 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.
Measured over the past years, PFSI shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.16% on average per year.
PFSI shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 18.32%.
Measured over the past years, PFSI shows a small growth in Revenue. The Revenue has been growing by 7.39% on average per year.
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
The Revenue is expected to grow by 20.33% on average over the next years. This is a very strong growth
EPS Next Y73.6%
EPS Next 2Y45.04%
EPS Next 3Y33.98%
EPS Next 5YN/A
Revenue Next Year42.18%
Revenue Next 2Y27.91%
Revenue Next 3Y20.33%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
A Price/Earnings ratio of 13.36 indicates a correct valuation of PFSI.
PFSI's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 29.63, PFSI is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 7.69, the valuation of PFSI can be described as very cheap.
78.22% of the companies in the same industry are more expensive than PFSI, based on the Price/Forward Earnings ratio.
PFSI's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.36 | ||
| Fwd PE | 7.69 |
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 | 22.66 |
4.3 Compensation for Growth
The 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)1.46
EPS Next 2Y45.04%
EPS Next 3Y33.98%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.19%, PFSI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.84, PFSI pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.29, PFSI's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.19% |
5.2 History
The dividend of PFSI is nicely growing with an annual growth rate of 32.84%!
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 around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP27.48%
EPS Next 2Y45.04%
EPS Next 3Y33.98%
101.25
+0.33 (+0.33%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners60.7%
Inst Owner Change-0.47%
Ins Owners5.31%
Ins Owner Change-0.01%
Market Cap5.20B
Analysts82.67
Price Target128.26 (26.68%)
Short Float %3.92%
Short Ratio4.14
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.19% |
Yearly Dividend0.83
Dividend Growth(5Y)32.84%
DP27.48%
Div Incr Years1
Div Non Decr Years2
Ex-Date
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)-0.89%
PT rev (3m)1.18%
EPS NQ rev (1m)0.97%
EPS NQ rev (3m)1.57%
EPS NY rev (1m)-7.18%
EPS NY rev (3m)-7.91%
Revenue NQ rev (1m)-2.18%
Revenue NQ rev (3m)-2.21%
Revenue NY rev (1m)-0.33%
Revenue NY rev (3m)-1.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.36 | ||
| Fwd PE | 7.69 | ||
| P/S | 2.31 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.39 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.66 |
EPS(TTM)7.58
EY7.49%
EPS(NY)13.16
Fwd EY13%
FCF(TTM)-38.47
FCFYN/A
OCF(TTM)-38.04
OCFYN/A
SpS43.74
BVpS72.77
TBVpS-78.11
PEG (NY)0.18
PEG (5Y)1.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.74% | ||
| ROE | 4.55% | ||
| ROCE | 2.69% | ||
| ROIC | 1.4% | ||
| ROICexc | 1.41% | ||
| ROICexgc | 4.4% | ||
| OM | 16.99% | ||
| PM (TTM) | 7.57% | ||
| GM | 66.1% | ||
| FCFM | N/A |
ROA(3y)1.6%
ROA(5y)3.07%
ROE(3y)8.64%
ROE(5y)20.77%
ROIC(3y)2.09%
ROIC(5y)3.64%
ROICexc(3y)2.24%
ROICexc(5y)3.77%
ROICexgc(3y)12.93%
ROICexgc(5y)13.58%
ROCE(3y)3.63%
ROCE(5y)7.24%
ROICexcg growth 3Y-31.58%
ROICexcg growth 5Y-16.28%
ROICexc growth 3Y-40.74%
ROICexc growth 5Y-22.11%
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-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 | 0.1 |
F-Score2
WACC10.1%
ROIC/WACC0.14
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
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 Y73.6%
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 2Y27.91%
Revenue Next 3Y20.33%
Revenue Next 5YN/A
EBIT growth 1Y24.95%
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-26.25%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-28.31%
OCF growth 3YN/A
OCF growth 5YN/A