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Finance Of America Companies Inc (FOA)
:FOA
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Finance of America Companies
(NYSE:FOA)
Rating:65Neutral
Price Target:
$26.00
▲(6.43%Upside)
Finance of America Companies (FOA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$593.13M
Dividend YieldN/A
Average Volume (3M)93.57K
Price to Earnings (P/E)4.1
Beta (1Y)0.40
Revenue Growth4215.36%
EPS GrowthN/A
CountryUS
Employees751
SectorFinancial
Sector Strength72
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)0.52
Shares Outstanding11,059,266
10 Day Avg. Volume75,764
30 Day Avg. Volume93,574
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)<0.01
Price to Sales (P/S)0.00
P/FCF Ratio-0.66
Enterprise Value/Market Cap-87.27
Enterprise Value/Revenue-14.63
Enterprise Value/Gross Profit-77.14
Enterprise Value/Ebitda-16.88
Forecast
1Y Price Target
$25.00Price Target Upside2.33% Upside
Rating ConsensusHold
Number of Analyst Covering1
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: 25.60%|
Next Earnings Date:Aug 05, 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 displays a mixed financial performance. Revenue growth is strong, but profitability and cash flow remain concerns. The balance sheet shows improvement through debt reduction, yet the company must convert revenue growth into sustainable profits.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 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.95B | 234.25M | 686.96M | 1.80B | 1.74B |
| Gross Profit | 270.64M | 177.03M | -32.38M | 1.71B | 1.74B |
| EBITDA | 81.76M | -119.30M | -278.01M | -271.48M | 0.00 |
| Net Income | 15.49M | -80.09M | -190.68M | -251.94M | -17.66M |
Balance Sheet | |||||
| Total Assets | 29.16B | 27.11B | 20.87B | 21.79B | 19.57B |
| Cash, Cash Equivalents and Short-Term Investments | 47.38M | 46.48M | 76.78M | 141.24M | 233.10M |
| Total Debt | 28.72B | 26.29B | 20.12B | 20.23B | 18.42B |
| Total Liabilities | 28.84B | 26.84B | 20.47B | 20.71B | 18.94B |
| Stockholders Equity | 255.30M | 232.31M | 253.93M | 387.90M | 628.18M |
Cash Flow | |||||
| Free Cash Flow | -423.81M | -71.57M | 1.41B | -140.65M | -709.21M |
| Operating Cash Flow | -423.81M | -71.57M | 1.41B | -96.59M | -686.09M |
| Investing Cash Flow | 114.80M | 158.14M | -1.82B | -1.62B | -875.11M |
| Financing Cash Flow | 386.21M | -139.23M | 225.21M | 1.67B | 1.72B |
Finance of America Companies Technical Analysis
Positive
24.43
Price Trends
22.57
Positive
21.66
Positive
21.43
Positive
Market Momentum
0.60
Negative
58.60
Neutral
80.99
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 24.43 is above the 20-day moving average (MA) of 23.71, above the 50-day MA of 22.57, and above the 200-day MA of 21.43, indicating a bullish trend. The MACD of 0.60 indicates Negative momentum. The RSI at 58.60 is Neutral, neither overbought nor oversold. The STOCH value of 80.99 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 (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $563.18M | ― | -0.62% | ― | 19.12% | 75.50% | |
74 Outperform | $549.55M | 2.97 | 14.69% | 0.94% | 12.45% | -36.64% | |
68 Neutral | $17.10B | 11.44 | 9.70% | 3.58% | 11.11% | -4.78% | |
66 Neutral | $632.16M | 8.91 | 6.03% | ― | 23.90% | ― | |
65 Neutral | $593.13M | 4.09 | 21.28% | ― | 4215.36% | ― | |
63 Neutral | $909.14M | 10.47 | 20.78% | ― | -1.46% | 25.24% | |
63 Neutral | $546.57M | 13.88 | 2.77% | ― | 0.54% | ― |
* Financial Sector Average
Performance Comparison
FOA
Finance of America Companies
24.43
16.71
216.45%
GDOT
Green Dot
10.26
0.66
6.88%
PRAA
Pra Group
15.94
-9.60
-37.59%
WRLD
World Acceptance
154.82
34.66
28.84%
YRD
Yiren Digital
6.36
2.02
46.54%
QD
Qudian
3.31
1.40
73.30%
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.