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Finance of America Companies (FOA)
NYSE:FOA
US Market

Finance of America Companies (FOA) AI Stock Analysis

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Finance of America Companies

(NYSE:FOA)

Rating:62Neutral
Price Target:
$23.50
▼(-0.38%Downside)
Finance of America Companies shows signs of improvement, particularly in operational efficiency and debt reduction, as highlighted in the recent earnings call. However, profitability and cash flow weaknesses, along with a challenging valuation, weigh on the overall score.

Finance of America Companies (FOA) vs. SPDR S&P 500 ETF (SPY)

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 generates revenue through a diversified array of financial services and products. Key revenue streams include mortgage lending, home improvement loans, and reverse mortgages, targeting both individual homeowners and commercial entities. The company also earns through its retirement solutions by providing financial products aimed at helping individuals manage and maximize their retirement income. Additionally, FOA has strategic partnerships and collaborations with real estate professionals, financial advisors, and other businesses, which facilitate cross-selling opportunities and enhance its market reach. This diversified approach allows FOA to capitalize on various financial needs across different market segments.

Finance of America Companies Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
% Change Since: 21.29%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Finance of America's strong financial performance in the first quarter of 2025, with significant improvements in funded volume, net income, and operational efficiency. The company's strategic initiatives and cost management efforts have yielded positive results, although some challenges remain with revenue margins and rate environment. Overall, the company appears to be on a positive trajectory with a balanced outlook.
Q1-2025 Updates
Positive Updates
Exceeding Funded Volume Guidance
Finance of America delivered $561 million in funded volume during the first quarter, surpassing the guidance range of $525 million to $550 million and marking a 32% improvement over the first quarter of 2024.
GAAP Net Income Turnaround
Generated $80 million in GAAP net income or $3.17 basic earnings per share, compared to a GAAP net loss of $16 million or $0.58 per basic share in the first quarter of 2024.
Operational Improvements
Doubled the percentage of retail loans funded within the first 30 days from submission, increased initial 30-day sales conversion rates by 40%, and reduced cost per opportunity by 12% quarter-over-quarter.
Adjusted Net Income Improvement
Adjusted net income improved by $20 million year-over-year, reaching $13 million or $0.52 per share, up from an adjusted net loss of $7 million in the first quarter of 2024.
Cost Management Success
General and administrative expenses declined by $4.3 million, a 25% year-over-year reduction, and a 35% decrease in communication and data processing expenses.
Negative Updates
Flat Revenue Margins
Despite product level margin improvements, total Retirement Solutions revenue margin was flat sequentially due to a shift in channel mix, with the wholesale channel carrying lower margins.
Rate Environment Challenges
The company faced modestly lower rate environment challenges, with a 10-year treasury falling roughly 35 basis points, partially offset by widening spreads.
Company Guidance
During the Finance of America First Quarter 2025 Earnings Call, the company reported strong performance metrics, with $561 million in funded volume surpassing their guidance range of $525 million to $550 million, marking a 32% increase over the previous year and their fourth consecutive quarter of volume growth. The company achieved a GAAP net income of $80 million, translating to $3.17 basic earnings per share, while adjusted net income reached $13 million or $0.52 per share, reflecting a $20 million improvement year-over-year. Additionally, the company maintained full-year guidance targets of $2.4 billion to $2.7 billion in funded volume and adjusted earnings per share of $2.60 to $3. Operational efficiencies were evident as they doubled the percentage of retail loans funded within 30 days, increased initial 30-day sales conversion rates by 40%, and reduced cost per opportunity by 12% quarter-over-quarter. Adjusted EBITDA improved to $29 million, up from $18 million in the previous quarter, with significant cost reductions achieved through disciplined vendor management. The company continues to focus on expanding its reverse mortgage offerings, targeting homeowners aged 55 and up, as part of a strategic campaign to reposition the product in the financial planning landscape.

Finance of America Companies Financial Statement Overview

Summary
Finance of America Companies shows a mixed financial performance. Revenue growth is strong, but profitability and cash flow generation remain weak points. The company has improved its debt situation, but challenges in cash flow and low net profit margins persist.
Income Statement
55
Neutral
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.
Balance Sheet
60
Neutral
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.
Cash Flow
50
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.23B1.95B234.25M686.96M1.80B1.74B
Gross Profit671.01M270.64M177.03M-32.38M1.71B1.74B
EBITDA739.15M81.76M-119.30M-278.01M-271.48M0.00
Net Income53.23M15.49M-80.09M-190.68M-251.94M-17.66M
Balance Sheet
Total Assets29.69T29.16B27.11B20.87B21.79B19.57B
Cash, Cash Equivalents and Short-Term Investments52.02B47.38M46.48M76.78M141.24M233.10M
Total Debt0.0028.72B26.29B20.12B20.23B18.42B
Total Liabilities29.29T28.84B26.84B20.47B20.71B18.94B
Stockholders Equity394.89B255.30M232.31M253.93M387.90M628.18M
Cash Flow
Free Cash Flow-383.19M-423.81M-71.57M1.41B-140.65M-709.21M
Operating Cash Flow-383.65M-423.81M-71.57M1.41B-96.59M-686.09M
Investing Cash Flow110.80M114.80M158.14M-1.82B-1.62B-875.11M
Financing Cash Flow281.14M386.21M-139.23M225.21M1.67B1.72B

Finance of America Companies Technical Analysis

Technical Analysis Sentiment
Positive
Last Price23.59
Price Trends
50DMA
21.42
Positive
100DMA
21.70
Positive
200DMA
20.40
Positive
Market Momentum
MACD
0.44
Negative
RSI
60.82
Neutral
STOCH
84.42
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FOA, the sentiment is Positive. The current price of 23.59 is above the 20-day moving average (MA) of 22.11, above the 50-day MA of 21.42, and above the 200-day MA of 20.40, indicating a bullish trend. The MACD of 0.44 indicates Negative momentum. The RSI at 60.82 is Neutral, neither overbought nor oversold. The STOCH value of 84.42 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$301.61M15.926.38%2.93%-8.20%-22.46%
69
Neutral
$205.75M17.037.16%10.74%-27.38%
69
Neutral
$211.16M9.769.67%2.82%10.36%10.16%
68
Neutral
$241.04M11.525.58%0.86%22.97%27.73%
FOFOA
62
Neutral
$258.90M4.0921.28%4215.36%
CICIA
59
Neutral
$181.04M20.644.23%1.80%-39.04%
58
Neutral
$12.52B5.23-2.71%5.27%5.88%-56.03%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FOA
Finance of America Companies
23.59
18.79
391.46%
CFFI
C&F Financial
65.19
23.16
55.10%
CIA
Citizens
3.57
0.80
28.88%
INBK
First Internet Bancorp
27.81
0.75
2.77%
MVBF
MVB Financial
23.24
6.27
36.95%
FINW
FinWise
15.72
5.27
50.43%

Finance of America Companies Corporate Events

Executive/Board ChangesShareholder Meetings
Finance of America Holds Annual Stockholders Meeting
Neutral
May 21, 2025

On May 16, 2025, Finance of America Companies Inc. held its Annual Meeting of Stockholders, where three key proposals were voted on. The stockholders elected six directors to the board for terms expiring at the 2026 annual meeting. Additionally, the compensation of the named executive officers was approved on an advisory basis, and the appointment of BDO USA, P.C. as the independent registered public accounting firm for the fiscal year ending December 31, 2025, was ratified.

The most recent analyst rating on (FOA) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on Finance of America Companies stock, see the FOA Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 24, 2025