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Finance of America Companies (FOA)
NYSE:FOA
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Finance of America Companies (FOA) AI Stock Analysis

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FOA

Finance of America Companies

(NYSE:FOA)

Rating:64Neutral
Price Target:
$29.00
▲(4.32% Upside)
Finance of America Companies' stock score is driven by strong earnings call outcomes and positive corporate events, indicating strategic progress. However, financial performance and valuation concerns, particularly around profitability and cash flow, temper 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 (FOA) is a diversified financial services firm that operates primarily in the mortgage and real estate sectors. The company provides a wide range of services including residential and commercial mortgage lending, reverse mortgages, and other real estate-related financial products. FOA aims to serve various customer segments, from individual homebuyers to institutional investors, through its innovative lending solutions and technology-driven platforms.
How the Company Makes MoneyFinance of America Companies generates revenue primarily through the origination and servicing of loans. The company's key revenue streams include interest income from mortgage loans, fees collected from loan origination and servicing, and revenue from its reverse mortgage products. Additionally, FOA benefits from partnerships with various real estate agents and brokers, enhancing its distribution channels. The firm also generates income from its investment in mortgage-backed securities, as well as from servicing fees associated with managing existing loans. Factors contributing to its earnings include market demand for housing, interest rates, and the overall economic environment influencing consumer borrowing behavior.

Finance of America Companies Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call highlighted several positive developments including significant volume growth, improved profitability, successful securitization efforts, and advancements in digital tools. However, the company also faces challenges with higher expenses and ongoing debt obligations. Overall, the positive aspects appear to outweigh the negatives.
Q2-2025 Updates
Positive Updates
Record Volume Growth
Finance of America funded $602 million in volume, a 35% increase from Q2 2024 and a 7% increase from the prior quarter, marking the fifth consecutive quarter of volume growth.
GAAP Net Income Turnaround
The company reported GAAP net income of $80 million or $3.16 per basic share, compared to a loss of $5 million in the same period last year.
Successful Securitization
Completed a $1 billion-plus HomeSafe securitization in July, highlighting strong investor demand.
Market Share and Origination Growth
Wholesale volume growth of nearly 55% in Q2 2025 compared to Q2 2024, with HMBS issuance market share increasing to over 29%.
Digital Advancements
Launched the industry's first digital prequalification experience and saw a 10% increase in digital channel leads.
Capital Markets Achievement
Securitized over $800 million in proprietary loans and closed a $1.2 billion transaction, the largest in company history.
Negative Updates
Higher Expenses
Total expenses increased by approximately $2.7 million quarter-over-quarter due to higher variable expenses such as compensation and marketing.
Continued Debt Obligations
Although the company has made progress in reducing debt, it still faces significant debt repayment obligations in the coming years.
Company Guidance
During the Finance of America Second Quarter 2025 Earnings Call, key metrics and guidance were discussed highlighting the company's strong performance and future outlook. The company reported a funded volume of $602 million, marking a 35% increase from the second quarter of 2024 and a 7% rise from the previous quarter. GAAP net income reached $80 million, equating to $3.16 per share, while adjusted net income was $14 million or $0.55 per share, with an adjusted EBITDA of $30 million. Year-to-date adjusted net income totaled $27 million, a significant improvement from a $7 million loss in the first half of the previous year. The company achieved a major milestone with its first $1 billion-plus HomeSafe securitization in July, demonstrating strong investor demand. Finance of America reaffirmed its full-year guidance, projecting $2.4 billion to $2.7 billion in originations and adjusted EPS of $2.60 to $3. For the third quarter, they anticipate funded volume between $600 million and $630 million. Additionally, strategic initiatives are underway to enhance digital tools and customer experience, with the launch of a digital prequalification experience and plans to introduce an AI-powered virtual call agent by year-end.

Finance of America Companies Financial Statement Overview

Summary
Finance of America Companies shows improvement in revenue and debt reduction, but profitability and cash flow generation remain weak. The company needs to convert revenue growth into sustainable profits and positive cash flows.
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 Revenue1.23B338.17M234.25M686.96M1.80B1.74B
Gross Profit671.01M338.17M177.03M-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 Price27.80
Price Trends
50DMA
24.96
Positive
100DMA
23.05
Positive
200DMA
23.36
Positive
Market Momentum
MACD
0.74
Positive
RSI
58.57
Neutral
STOCH
63.22
Neutral
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 27.8 is above the 20-day moving average (MA) of 27.23, above the 50-day MA of 24.96, and above the 200-day MA of 23.36, indicating a bullish trend. The MACD of 0.74 indicates Positive momentum. The RSI at 58.57 is Neutral, neither overbought nor oversold. The STOCH value of 63.22 is Neutral, 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 70 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 (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$500.29M2.8213.64%6.81%12.69%-35.36%
70
Outperform
$741.42M10.494.57%-39.25%
69
Neutral
$957.15M11.6719.08%0.77%12.08%
68
Neutral
$17.81B11.8710.24%3.74%9.75%1.30%
65
Neutral
$758.88M-2.68%22.15%57.64%
65
Neutral
$662.69M7.407.38%18.67%2254.86%
64
Neutral
$675.50M30.1233.40%276.86%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FOA
Finance of America Companies
27.80
15.37
123.65%
GDOT
Green Dot
13.72
2.04
17.47%
PRAA
Pra Group
17.18
-3.31
-16.15%
WRLD
World Acceptance
173.01
61.06
54.54%
YRD
Yiren Digital
5.73
1.55
37.08%
QD
Qudian
4.44
2.69
153.71%

Finance of America Companies Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Finance of America Repurchases Blackstone’s Equity Stake
Positive
Aug 5, 2025

On August 4, 2025, Finance of America Companies Inc. announced the repurchase of Blackstone’s equity stake and the repayment of its working capital facility, marking a significant milestone in its strategic evolution. The company also entered into a new convertible debt facility with existing institutional investors, enhancing its financial position and supporting strategic expansion. These transactions are expected to strengthen the company’s balance sheet, reduce costs, and position it for future growth, reflecting a commitment to long-term value creation.

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.

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: Aug 19, 2025