Flagstar Financial (FLG) AI Stock Analysis

• Market Cap: $5.38B
• Dividend Yield: 0.31%
• Average Volume (3M): 6.56M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.88
• Revenue Growth: -13.26%
• EPS Growth: 86.72%
• Country: US
• Employees: 6,993
• Sector: Financial
• Sector Strength: 75
• Industry: Banks - Regional
• EPS (TTM): -0.19
• Shares Outstanding: 415,574,280
• 10 Day Avg. Volume: 5,672,030
• 30 Day Avg. Volume: 6,560,258
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.37
• Price to Sales (P/S): 0.47
• P/FCF Ratio: 59.78
• Enterprise Value/Market Cap: 1.93
• Enterprise Value/Revenue: 1.73
• Enterprise Value/Gross Profit: 7.08
• Enterprise Value/Ebitda: -11.02
• 1Y Price Target: $13.40
• Price Target Upside: 3.47% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 50 Neutral
• Price Target: $12.00 ▼(-7.34% Downside)

Flagstar Financial's overall stock score reflects significant financial challenges, with persistent losses and liquidity issues being the most impactful factors. While technical indicators show some positive momentum, the company's valuation and earnings call suggest ongoing risks. The cautiously optimistic outlook from the earnings call provides some balance, but the financial instability remains a major concern.

Positive Factors

Credit Quality

Flagstar has made significant improvements in the credit quality of its portfolio and has increased reserves more than four times since the last rent freeze in 2020.

Rate Cuts

Rate cuts could benefit FLG more than its peers, enhancing the company's position.

Valuation

Shares trading at 0.6x TBV and top tier CET1 suggest the sell-off is overdone.

Negative Factors

Balance Sheet

Higher than expected commercial real estate payoffs are resulting in a smaller balance sheet than the company originally expected.

Earnings

Flagstar (FLG) shares underperforming by 500bp+ after guiding down FY25 EPS outlook.

Rent Freeze

Potential rent freezes will likely remain an overhang on the stock until November.

Flagstar Financial Business Overview & Revenue Model

Company Description

Flagstar Financial, Inc. operates as the bank holding company for Flagstar Bank, N.A. that provides banking products and services in the United States. The company's deposit products include interest-bearing checking and money market, savings, non-interest-bearing, and retirement accounts, as well as certificates of deposit. Its loan products comprise multi-family loans; commercial real estate loans; acquisition, development, and construction loans; commercial and industrial loans; one-to-four family loans; specialty finance loans and leases; warehouse loans; and other loans, such as home equity lines of credit, boat and recreational vehicle indirect lending, point of sale consumer loans, and other consumer loans, including overdraft loans. The company offers cash management products; non-deposit investment and insurance products; and online banking, mobile banking, and bank-by-phone services. It primarily serves individuals, small and mid-size businesses, and professional associations. The company was formerly known as New York Community Bancorp, Inc. and changed its name to Flagstar Financial, Inc. in October 2024. Flagstar Financial, Inc. was founded in 1859 and is headquartered in Hicksville, New York.

How the Company Makes Money

Flagstar Financial generates revenue through multiple streams, predominantly from interest income and non-interest income. A significant portion of its revenue comes from the origination and servicing of residential mortgages, where it earns fees for processing loans and servicing them over time. Additionally, the company generates income through its banking operations, including interest earned on loans and mortgages issued to customers. Non-interest income is derived from service fees, investment income, and wealth management services. Flagstar also engages in strategic partnerships, which can enhance its product offerings and expand its customer base, further contributing to its earnings.

Flagstar Financial Financial Statement Overview

Summary

Flagstar Financial is facing significant financial difficulties. The income statement reflects declining revenues and persistent losses, with a deeply negative net profit margin. The balance sheet indicates high leverage and insufficient equity, while cash flow analysis underscores liquidity issues. Overall, the company needs to address operational inefficiencies and improve its financial structure.

Income Statement

Flagstar Financial's income statement reveals significant challenges. The TTM (Trailing-Twelve-Months) gross profit margin is approximately 24.46%, indicating some ability to generate profit from revenue. However, the net profit margin is deeply negative at -14.88%, reflecting substantial losses. Revenue has declined by 6.24% from the previous year, and both EBIT and EBITDA margins are negative, suggesting operational inefficiencies and high costs.

Balance Sheet

The balance sheet shows a debt-to-equity ratio of 1.74, indicating a high level of leverage, which poses financial risk. The equity ratio stands at 8.35%, reflecting a low proportion of equity financing. Return on equity is negative, highlighting the company's inability to generate profits from shareholders' equity. Overall, the balance sheet suggests financial instability and a need for improved capital management.

Cash Flow

Cash flow analysis reveals a concerning trend. The free cash flow growth rate is negative, indicating a decline in available cash. The operating cash flow to net income ratio is negative, suggesting that the company is not generating sufficient cash from operations to cover its losses. Similarly, the free cash flow to net income ratio is also negative, further emphasizing liquidity challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.99B	6.38B	6.05B	2.18B	1.75B	1.77B
Gross Profit	1.46B	1.49B	2.80B	1.35B	1.35B	1.10B
EBITDA	-941.00M	-1.19B	115.00M	849.00M	827.00M	612.00M
Net Income	-891.00M	-1.12B	-79.00M	650.00M	596.00M	511.00M
Balance Sheet
Total Assets	97.63B	100.16B	114.06B	90.14B	59.53B	56.31B
Cash, Cash Equivalents and Short-Term Investments	25.44B	25.83B	20.62B	10.66B	6.82B	6.48B
Total Debt	14.18B	14.43B	28.62B	31.66B	20.56B	16.35B
Total Liabilities	89.47B	91.99B	105.69B	81.32B	52.48B	49.46B
Stockholders Equity	8.15B	8.17B	8.37B	8.82B	7.04B	6.84B
Cash Flow
Free Cash Flow	-220.00M	50.00M	197.00M	1.02B	286.00M	334.00M
Operating Cash Flow	-210.00M	86.00M	263.00M	1.03B	290.00M	334.00M
Investing Cash Flow	13.07B	15.45B	20.67B	-6.32B	-2.76B	-1.02B
Financing Cash Flow	-13.24B	-11.59B	-11.41B	5.17B	2.73B	1.90B

Flagstar Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FLG, the sentiment is Positive. The current price of 12.95 is above the 20-day moving average (MA) of 12.27, above the 50-day MA of 11.71, and above the 200-day MA of 11.32, indicating a bullish trend. The MACD of 0.36 indicates Negative momentum. The RSI at 67.67 is Neutral, neither overbought nor oversold. The STOCH value of 71.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FLG.

Flagstar Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OZK	80 Outperform	$5.94B	8.49	12.68%	3.21%	7.12%	2.47%
COLB	79 Outperform	$8.01B	10.56	10.24%	5.38%	-1.39%	11.31%
FNB	78 Outperform	$5.89B	12.73	7.40%	2.86%	7.73%	8.39%
GBCI	74 Outperform	$5.78B	25.31	6.60%	2.65%	8.37%	17.00%
VLY	72 Outperform	$5.83B	13.33	6.33%	4.19%	0.20%	9.86%
Sector *	68 Neutral	$18.05B	11.73	10.24%	3.73%	9.66%	1.70%
FLG	50 Neutral	$5.38B	―	-7.62%	0.31%	-13.26%	86.72%

Flagstar Financial Corporate Events

Flagstar Financial Plans to Streamline Operations

Flagstar Financial, Inc. announced plans to streamline its operations by eliminating its bank holding company structure, aiming to reduce duplicative supervision and regulation, and achieve annual cost savings of approximately $15 million. The company intends to issue a preliminary proxy in August 2025, with a shareholder meeting scheduled for October 2025, and expects to complete the merger by the fourth quarter of 2025, pending necessary approvals.

Flagstar Financial Announces Merger with Flagstar Bank

On July 24, 2025, Flagstar Financial, Inc. announced an internal reorganization plan to merge with its wholly-owned subsidiary, Flagstar Bank, N.A. This merger, approved by the boards of both entities, aims to streamline the corporate structure, reduce costs, and eliminate redundant activities. The merger will result in Flagstar Bank, N.A. continuing as the surviving entity, maintaining the same brand name, management, and board of directors. The reorganization is subject to regulatory and shareholder approval, with expectations to complete it by the end of 2025. The move is intended to enhance the company’s focus on its customers and communities, while also maintaining its position as a publicly traded company on the NYSE under the ticker symbol ‘FLG’.

Flagstar Financial Appoints New Executive Vice President

On July 1, 2025, Flagstar Bank entered into an employment agreement with Richard Raffetto, appointing him as the Senior Executive Vice President and President of Commercial and Private Banking. The agreement includes a base salary of $700,000, eligibility for a cash bonus, and participation in the company’s long-term equity incentive program. It also outlines conditions for termination and post-employment covenants, impacting the company’s executive management and potentially its strategic direction.

Flagstar Financial Holds Virtual Shareholders’ Meeting

On June 4, 2025, Flagstar Financial, Inc. held its annual shareholders’ meeting virtually. At this meeting, shareholders elected three directors for three-year terms and ratified KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. Additionally, the shareholders approved, on a non-binding advisory basis, the compensation of the company’s named executive officers.