Mr Cooper Group (COOP) AI Stock Analysis

• Market Cap: $12.06B
• Dividend Yield: N/A
• Average Volume (3M): 1.04M
• Price to Earnings (P/E): 21.6
• Beta (1Y): <0.01
• Revenue Growth: 2.27%
• EPS Growth: -17.46%
• Country: US
• Employees: 7,900
• Sector: Financial
• Sector Strength: 78
• Industry: Financial - Mortgages
• EPS (TTM): 2.95
• Shares Outstanding: 63,993,270
• 10 Day Avg. Volume: 732,061
• 30 Day Avg. Volume: 1,035,699
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.74
• Enterprise Value/Revenue: 9.15
• Enterprise Value/Gross Profit: 12.46
• Enterprise Value/Ebitda: 24.20
• 1Y Price Target: $163.33
• Price Target Upside: -13.37% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 65 Neutral
• Price Target: $197.00 ▲(4.49% Upside)

Mr Cooper Group's overall stock score reflects a balance of strong technical momentum and positive earnings call highlights against financial performance concerns and legal challenges in the merger process. The stock's valuation is moderate, but liquidity issues and high leverage remain significant risks.

Positive Factors

Company Strategy

Rocket acquisition makes it uncontested heavyweight in servicing, resets bar for stock valuations connected to achieving scale.

Financial Performance

The COOP deal supports at least $500 million of expected synergies, including $100 million of revenue synergies from achieving a stronger recapture rate.

Market Position

RKT will be poised to parlay its industry-leading 83% mortgage recapture rate across COOP’s significantly larger servicing portfolio, enhancing the combined company’s market position.

Negative Factors

Market Dynamics

Competition in mortgage origination & servicing, interest rates, and regulation & litigation are influencing factors.

Regulatory Concerns

The market is currently pricing in some level of skepticism regarding the deal’s eventual closing, possibly due to concerns from regulatory entities about RKT/COOP’s combined market dominance.

Valuation Concerns

Downgrading COOP shares to Market Perform from Market Outperform as the shares are now reasonably fairly valued with limited price appreciation potential after the announcement of the acquisition.

Mr Cooper Group Business Overview & Revenue Model

Company Description

Mr. Cooper Group Inc. provides servicing, origination, and transaction-based services related to single-family residences in the United States. The company operates through two segments: Servicing and Originations. The Servicing segment performs activities for underlying mortgages, including collecting and disbursing borrower payments, investor reporting, customer service, and modifying loans. The Originations segment originates residential mortgage loans through its direct-to-consumer channel, as well as originates and purchases loans from mortgage bankers and brokers. It operates primarily under the Mr. Cooper and Xome brands. The company was formerly known as WMIH Corp. and changed its name to Mr. Cooper Group Inc. in October 2018. Mr. Cooper Group Inc. was incorporated in 2015 and is based in Coppell, Texas.

How the Company Makes Money

Mr. Cooper Group generates revenue through several key streams within the mortgage industry. The primary source of income comes from mortgage servicing fees, which are collected for managing mortgage loans on behalf of investors. Additionally, the company earns money through mortgage origination fees when new loans are created. Other significant revenue sources include gains from the sale of loans on the secondary market, as well as ancillary services such as escrow and insurance products. The company also benefits from strategic partnerships with various financial institutions and technology providers, enhancing its service offerings and expanding its customer base.

Mr Cooper Group Financial Statement Overview

Summary

Mr Cooper Group's financial performance is mixed. While profitability margins are strong, declining revenue and high leverage pose risks. The negative cash flow trends are particularly concerning, suggesting liquidity issues. The company must focus on improving revenue growth and managing debt to enhance financial health.

Income Statement

The income statement shows a mixed performance. Gross profit margin has improved to 73.4% in TTM, indicating strong cost management. However, revenue has declined by 6.7% in the TTM period, reflecting potential market challenges. Net profit margin remains healthy at 24.9%, but the declining EBIT and EBITDA margins suggest pressure on operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 2.17 in TTM, indicating significant leverage. While the return on equity is moderate at 11.7%, the equity ratio is relatively low, suggesting potential financial risk. The company needs to manage its debt levels to improve financial stability.

Cash Flow

Cash flow analysis shows concerning trends, with negative operating and free cash flows in TTM. The free cash flow to net income ratio is high at 10.6, indicating reliance on non-operational sources for cash. The negative growth in free cash flow highlights liquidity challenges that need addressing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.29B	2.23B	1.79B	2.46B	3.19B	2.41B
Gross Profit	1.68B	1.53B	1.79B	1.43B	1.80B	1.30B
EBITDA	865.00M	989.00M	699.00M	1.06B	1.47B	1.05B
Net Income	570.00M	669.00M	500.00M	923.00M	1.45B	305.00M
Balance Sheet
Total Assets	18.50B	18.94B	14.20B	12.78B	14.20B	24.16B
Cash, Cash Equivalents and Short-Term Investments	783.00M	753.00M	571.00M	527.00M	895.00M	695.00M
Total Debt	11.06B	11.39B	7.45B	5.56B	7.67B	8.33B
Total Liabilities	13.40B	14.13B	9.91B	8.72B	10.84B	21.66B
Stockholders Equity	5.10B	4.81B	4.28B	4.06B	3.37B	2.50B
Cash Flow
Free Cash Flow	-668.00M	-762.00M	-972.00M	2.15B	1.67B	144.00M
Operating Cash Flow	-63.00M	-724.00M	896.00M	3.77B	2.63B	331.00M
Investing Cash Flow	-1.57B	-2.70B	-1.84B	-1.32B	1.19B	-134.00M
Financing Cash Flow	1.78B	3.65B	978.00M	-2.78B	-3.70B	104.00M

Mr Cooper Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 188.53
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COOP, the sentiment is Positive. The current price of 188.53 is below the 20-day moving average (MA) of 189.04, above the 50-day MA of 167.71, and above the 200-day MA of 124.67, indicating a neutral trend. The MACD of 6.91 indicates Positive momentum. The RSI at 55.47 is Neutral, neither overbought nor oversold. The STOCH value of 45.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for COOP.

Mr Cooper Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$17.90B	11.86	10.29%	3.72%	9.74%	1.66%
PFSI	67 Neutral	$5.69B	15.26	10.05%	1.09%	20.77%	96.22%
COOP	65 Neutral	$12.06B	21.56	11.76%	―	2.27%	-17.46%
RKT	61 Neutral	$37.40B	68.51	>-0.01%	―	21.52%	-103.65%
GHLD	58 Neutral	$1.24B	51.05	2.12%	2.49%	34.62%	-7.94%
LDI	57 Neutral	$708.18M	―	-23.67%	―	6.60%	44.77%
UWMC	56 Neutral	$9.12B	37.74	8.18%	7.02%	12.27%	-21.43%

Mr Cooper Group Corporate Events

Mr Cooper Faces Legal Challenges in Merger Process

On March 31, 2025, Mr. Cooper Group Inc. entered into a merger agreement with Rocket Companies, Inc., which involves Mr. Cooper becoming a wholly owned subsidiary of Rocket. This merger is subject to shareholder approval, with a special meeting scheduled for September 3, 2025. However, the merger process has faced legal challenges, as three lawsuits have been filed by Mr. Cooper’s stockholders alleging misstatements and omissions in the proxy statement related to the merger. Despite these allegations, Mr. Cooper plans to supplement the proxy statement to address these claims, although the company maintains that the original disclosures were compliant with applicable laws.

Mr Cooper Group Advances Merger with Rocket Companies

On March 31, 2025, Mr. Cooper Group Inc. entered into a Merger Agreement with Rocket Companies, Inc., involving a series of mergers that will result in Mr. Cooper becoming a wholly-owned subsidiary of Rocket. The expiration of the HSR Act waiting period on June 4, 2025, marked a significant step towards the completion of the mergers, which are expected to close in the fourth quarter of 2025, pending other regulatory approvals and stockholder consent.

Mr Cooper Group Approves Key Proposals at Annual Meeting

On May 22, 2025, Mr. Cooper Group Inc. held its 2025 Annual Meeting of Stockholders, where several key proposals were approved. Stockholders elected seven directors for the upcoming term and approved advisory votes on executive compensation, deciding to hold these votes annually. Additionally, the appointment of Ernst & Young LLP as the independent registered public accounting firm for 2025 was ratified.