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Finance of America Companies (FOA)
NYSE:FOA
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Finance of America Companies
(NYSE:FOA)
54Neutral
Finance of America Companies (FOA) vs. S&P 500 (SPY)
Market Cap
$220.93M
Dividend YieldN/A
Average Volume (3M)131.28K
Price to Earnings (P/E)4.1
Beta (1Y)0.18
Revenue Growth4712.71%
EPS GrowthN/A
CountryUS
Employees751
SectorFinancial
Sector Strength81
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)-3.31
Shares Outstanding11,008,095
10 Day Avg. Volume103,481
30 Day Avg. Volume131,275
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.36
Price to Cash Flow (P/CF)-0.50
P/FCF Ratio2.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$26.25Price Target Upside31.51% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Finance of America Companies Business Overview & Revenue Model
Company DescriptionFinance of America Companies Inc. operates a consumer lending platform in the United States. The company operates through: Mortgage Originations, Reverse Originations, Commercial Originations, Lender Services, and Portfolio Management segments. It provides residential mortgage loans to the government sponsored entities; government-insured agricultural lending solutions to farmers; product development, loan securitization, loan sales, risk management, asset management, and servicing oversight services to enterprise and third-party funds; and ancillary business services, title agency and title insurance services, mortgage servicing rights valuation and trade brokerage, transactional fulfillment services, mortgage loan third party review or due diligence services, and appraisal and capital management services to residential mortgage, student lending, and commercial lending industry customers. The company was founded in 2013 and is based in Irving, Texas.
How the Company Makes MoneyFinance of America Companies makes money primarily through the origination and servicing of loans. The company's key revenue streams include interest income from mortgage lending, fees from reverse mortgage services, and income from commercial real estate lending. Additionally, FOA generates revenue through its asset management and distribution services, where it sells loans and securities to investors. Strategic partnerships with financial institutions and investors also play a significant role in generating earnings by facilitating better access to capital and expanding the reach of its lending products.
Finance of America Companies Financial Statement Overview
Summary
Finance of America Companies is seeing revenue growth and debt reduction, which are positive indicators. However, challenges with profitability and cash flow generation persist, as evidenced by low net income margins and negative free cash flow.Income Statement
Finance of America Companies shows a mixed performance in its income statement. The company experienced significant revenue growth of 44.33% from 2023 to 2024, which is a positive indicator. However, profitability is a concern as net income remains low relative to revenue, resulting in a low net profit margin. The EBIT margin is positive, indicating operational profitability, but the negative EBITDA suggests challenges in managing non-operating expenses.55
Neutral
Balance Sheet
The balance sheet reflects a strong equity position with the debt-to-equity ratio improving significantly, as total debt was reduced to zero in 2024. The equity ratio is low, indicating high leverage historically, but the company's efforts to reduce debt are promising. Return on Equity (ROE) is positive due to net income improvement, but the overall low equity base suggests potential risk.60
Neutral
Cash Flow
Cash flow analysis reveals challenges in generating positive cash flows. While the free cash flow growth rate is a concern with significant negative values in recent years, the company has improved its operating cash flow to net income ratio, indicating better cash management. However, free cash flow remains negative, raising sustainability concerns.50
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 796.26M | 338.17M | 234.25M | 573.24M | 1.74B | 1.74B | Gross Profit |
| 724.12M | 338.17M | 234.25M | 544.85M | 1.71B | 1.74B | EBIT |
| 870.24M | 40.42M | -54.67M | -87.41M | -271.48M | 520.73M | EBITDA |
| 1.10B | -1.56B | 0.00 | 0.00 | -271.48M | 0.00 | Net Income Common Stockholders |
| 148.47M | 40.42M | -80.09M | -715.53M | -1.18B | 518.39M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 224.80M | 47.38M | 46.48M | 18.67M | 141.24M | 247.29M | Total Assets |
| 27.11B | 29.16B | 27.11B | 20.87B | 21.79B | 19.57B | Total Debt |
| 26.63B | 0.00 | 26.29B | 20.19B | 20.23B | 18.42B | Net Debt |
| 26.40B | -47.38M | 26.24B | 20.10B | 20.09B | 18.17B | Total Liabilities |
| 26.84B | 28.84B | 26.84B | 20.47B | 20.71B | 18.94B | Stockholders Equity |
| 232.31M | 315.66M | 232.31M | 253.93M | 387.90M | 628.18M |
| Cash Flow | Free Cash Flow | ||||
| -259.33M | -423.81M | -71.57M | 1.40B | -140.65M | -709.21M | Operating Cash Flow |
| -378.94M | -423.81M | -71.57M | 1.41B | -96.59M | -686.09M | Investing Cash Flow |
| 164.40M | 114.80M | 158.14M | -1.82B | -1.62B | -875.11M | Financing Cash Flow |
| 152.29M | 386.21M | -139.23M | 225.21M | 1.67B | 1.72B |
Finance of America Companies Technical Analysis
Neutral
19.96
Price Trends
22.21
Negative
23.59
Negative
16.72
Positive
Market Momentum
-0.87
Positive
44.23
Neutral
49.32
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FOA, the sentiment is Neutral. The current price of 19.96 is below the 20-day moving average (MA) of 20.71, below the 50-day MA of 22.21, and above the 200-day MA of 16.72, indicating a neutral trend. The MACD of -0.87 indicates Positive momentum. The RSI at 44.23 is Neutral, neither overbought nor oversold. The STOCH value of 49.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FOA.
Finance of America Companies Risk Analysis
Finance of America Companies disclosed 69 risk factors in its most recent earnings report. Finance of America Companies reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Finance of America Companies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $186.16M | 9.56 | 8.95% | 3.18% | 10.65% | -12.80% | |
69 Neutral | $188.86M | 15.11 | 7.51% | ― | 14.11% | -28.06% | |
64 Neutral | $196.73M | 7.84 | 6.77% | 1.04% | 27.55% | 200.97% | |
63 Neutral | $12.75B | 9.36 | 8.64% | 84.32% | 13.82% | -3.89% | |
60 Neutral | $209.61M | 14.42 | 7.80% | ― | 1.80% | -39.04% | |
54 Neutral | $220.93M | 4.09 | 7.18% | ― | 4712.71% | ― | |
49 Neutral | $205.26M | 10.36 | 6.75% | 4.29% | 0.35% | 1.96% |
* Financial Sector Average
Performance Comparison
FOA
Finance of America Companies
19.96
13.63
215.32%
CFFI
C&F Financial
58.80
25.18
74.90%
CIA
Citizens
4.26
2.29
116.24%
INBK
First Internet Bancorp
23.43
-7.40
-24.00%
MVBF
MVB Financial
16.03
-3.34
-17.24%
FINW
FinWise
14.72
4.92
50.20%
Finance of America Companies Earnings Call Summary
Earnings Call Date: Mar 11, 2025 | % Change Since: -5.85% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
Finance of America demonstrated substantial growth in loan funding and financial performance in 2024, with successful cost efficiency improvements and a record securitization. However, the company faced challenges with a Q4 net loss and underperformance in market penetration for certain products. Overall, the positive aspects like revenue growth and cost efficiency outweigh the challenges faced.Highlights
Significant Loan Funding Growth
Finance of America funded over $1.9 billion in loans in 2024, marking a 19% increase in volume year-over-year. They project full-year origination volumes for 2025 to be in the range of $2.4 billion to $2.7 billion, a 26% to 42% increase from 2024.
Strong Financial Performance
The company recognized positive GAAP net income of $40 million, adjusted net income of $14 million, and adjusted EBITDA of $60 million in 2024. This represents a $200 million increase in GAAP net income and nearly $100 million increase in adjusted net income from 2023.
Revenue Margin Expansion
Finance of America experienced a 16% increase in revenue margins from 9.2% in 2023 to 10.7% in 2024 on $1.9 billion of production. This was driven by a higher margin product mix and improved execution of proprietary products.
Cost Efficiency Improvements
The company achieved $48 million in cost reductions through technology-driven process automation and lower corporate overhead, such as workforce optimization and real estate consolidations.
Record Securitization
In February 2025, Finance of America completed the largest securitization from non-agency proprietary products in its history, enhancing liquidity and supporting continued growth.
Lowlights
Q4 Net Loss
For the fourth quarter of 2024, the company reported a net loss of $143 million, or $5.95 per share, despite a full-year adjusted net income of $14 million.
Volatility in Interest Rates
There was some pressure on revenue margins in Q4 2024 due to volatile interest rates, which affected the net gain on originations line.
Underperformance in Market Penetration
Despite significant growth in the HomeSafe Second product with 77% growth between the first and second half of 2024, the market penetration remains low, accounting for only one-tenth of 1% of the total lending to the senior demographic.
Company Guidance
During the Finance of America 4Q and FY2024 earnings call, guidance for 2025 was provided, with key metrics highlighting a strong performance and strategic progress made in 2024. The company funded more than $1.9 billion in loans, marking a 19% increase in volume year-over-year. For 2025, they anticipate origination volumes between $2.4 billion to $2.7 billion, a projected 26% to 42% increase from 2024. Financially, Finance of America reported a GAAP net income of $40 million, adjusted net income of $14 million, and adjusted EBITDA of $60 million for 2024. They also achieved a $206 million increase in GAAP net income and nearly $100 million increase in adjusted net income from 2023 to 2024. Cost efficiencies were realized through a $48 million reduction in the cost base, attributed to technology-driven process automation and streamlined operations. For 2025, the company expects Q1 origination volume between $525 million to $550 million, with full-year adjusted net income projected between $2.60 to $3 per share.Finance of America Companies Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Finance of America Expands Board with New Appointments
Positive
Mar 20, 2025
On March 19, 2025, Finance of America Companies Inc. announced the appointment of Andrew Essex and Cory Gardner to its Board of Directors, expanding the board to seven members. Essex, with his expertise in marketing and brand strategy, and Gardner, with his background in legislative affairs and financial services, are expected to enhance the company’s strategic growth and relationships with policymakers. These appointments are part of FOA’s efforts to strengthen its leadership and continue its expansion in providing financial solutions for senior homeowners.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.