Guild Holdings (GHLD) AI Stock Analysis

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Guild Holdings

(NYSE:GHLD)

66Neutral

Guild Holdings is showing strong growth in revenue and profitability with strategic growth initiatives, despite challenges in cash flow management. The technical analysis indicates strong momentum, while the valuation suggests the stock is undervalued. The positive sentiment from the earnings call further supports a favorable outlook, though potential risks from interest rate fluctuations should be monitored.

Guild Holdings (GHLD) vs. S&P 500 (SPY)

Market Cap

$792.99M

Dividend Yield3.9%

Average Volume (3M)15.72K

Price to Earnings (P/E)8.2

Beta (1Y)0.22

Revenue Growth40.27%

EPS GrowthN/A

CountryUS

Employees5,270

SectorFinancial

Sector Strength86

IndustryFinancial - Mortgages

Share Statistics

EPS (TTM)1.54

Shares Outstanding21,570,827

10 Day Avg. Volume23,719

30 Day Avg. Volume15,717

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.11

Price to Cash Flow (P/CF)1.10

P/FCF Ratio1.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$15.50

Price Target Upside21.00% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering6

Guild Holdings Business Overview & Revenue Model

Company DescriptionGuild Holdings (GHLD) is a leading independent mortgage company that operates primarily in the United States. It specializes in residential mortgage lending, providing a wide range of mortgage products designed to meet the diverse needs of homebuyers. The company offers conventional loans, Federal Housing Administration (FHA) loans, Department of Veterans Affairs (VA) loans, and other government-backed loans, serving a broad customer base through its retail and correspondent channels.

How the Company Makes MoneyGuild Holdings generates revenue through the origination and sale of residential mortgage loans. The company earns money primarily from the fees and interest associated with originating mortgage loans and from selling these loans to secondary market investors, including government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac. Additionally, Guild Holdings generates income from the servicing of mortgage loans, earning fees for managing loan accounts and processing payments over the life of the loan. Significant partnerships with real estate agents, builders, and financial institutions help expand its customer base and drive loan origination volumes, contributing to its overall revenue.

Guild Holdings Financial Statement Overview

Summary

Guild Holdings exhibits revenue growth and some profitability improvements. However, the company faces significant challenges with cash flow and operational stability. Despite a decreased leverage indicated by the balance sheet, liquidity risks remain due to negative free cash flow and operational cash management issues.

Income Statement

Neutral

Guild Holdings shows a mixed performance in its income statement. The company has demonstrated significant revenue growth in the TTM (Trailing-Twelve-Months) with a revenue increase from $663.86M in 2023 to $969.89M. However, profitability remains a concern with a net profit margin of approximately 10.01% in the TTM, improved from a net loss in the previous year. The EBIT and EBITDA margins indicate better operational efficiency, but the prior periods show fluctuating performance, suggesting potential volatility.

Balance Sheet

Neutral

The balance sheet shows moderate financial health. The debt-to-equity ratio has improved to 0.24 in the TTM, down from previous years, indicating decreased leverage. However, the equity ratio remains relatively stable at around 26.29%, suggesting a balanced capital structure. Return on equity has improved to approximately 7.74% in the TTM, yet the stability of these metrics over time poses questions about sustained performance.

Cash Flow

Negative

The cash flow statement reveals challenges, with negative free cash flow in the TTM despite prior positive cash flow years. Free cash flow growth is negative, and the operating cash flow to net income ratio is unfavorable, indicating a need for enhanced cash management. This highlights potential liquidity risks and the need for improved operational cash generation.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.05B	663.86M	1.16B	1.58B	1.62B
	Gross Profit
1.05B	677.89M	473.93M	489.19M	1.59B
	EBIT
-219.69M	59.49M	487.22M	386.92M	494.07M
	EBITDA
24.55M	59.49M	840.77M	486.15M	619.94M
	Net Income Common Stockholders
97.13M	-39.01M	328.60M	283.77M	370.58M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
118.20M	136.82M	137.89M	243.11M	334.62M
	Total Assets
4.77B	3.68B	3.24B	4.38B	4.82B
	Total Debt
300.00M	526.78M	925.91M	2.28B	2.39B
	Net Debt
181.80M	406.52M	788.02M	2.04B	2.05B
	Total Liabilities
3.51B	2.49B	1.99B	3.46B	4.08B
	Stockholders Equity
1.25B	1.18B	1.25B	919.98M	735.99M
Cash Flow		Free Cash Flow
-668.99M	-97.23M	1.26B	675.85M	-476.27M
	Operating Cash Flow
-659.62M	-91.72M	1.26B	680.46M	-468.04M
	Investing Cash Flow
-152.39M	-136.60M	-7.18M	-104.66M	-18.02M
	Financing Cash Flow
809.69M	208.95M	-1.35B	-667.31M	718.96M

Guild Holdings Technical Analysis

Technical Analysis Sentiment

Negative

Last Price12.81

Price Trends

50DMA

12.87

Negative

100DMA

12.89

Negative

200DMA

13.81

Negative

Market Momentum

MACD

0.70

Negative

RSI

65.40

Neutral

STOCH

77.50

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GHLD, the sentiment is Negative. The current price of 12.81 is below the 20-day moving average (MA) of 13.95, below the 50-day MA of 12.87, and below the 200-day MA of 13.81, indicating a bearish trend. The MACD of 0.70 indicates Negative momentum. The RSI at 65.40 is Neutral, neither overbought nor oversold. The STOCH value of 77.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GHLD.

Guild Holdings Risk Analysis

Guild Holdings disclosed 43 risk factors in its most recent earnings report. Guild Holdings 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

Guild Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNOB	74 Outperform	$812.38M	12.06	5.99%	3.44%	6.06%	-15.21%
OCFC	73 Outperform	$861.70M	8.96	5.95%	5.42%	7.54%	-2.82%
BBDC	73 Outperform	$882.27M	8.03	9.24%	12.43%	3.82%	-12.74%
BRKL	68 Neutral	$857.32M	12.38	5.68%	5.64%	7.79%	-8.83%
GHLD	66 Neutral	$792.99M	8.19	7.97%	3.90%	40.27%	―
Sector *	64 Neutral	$13.37B	9.30	9.39%	4.85%	16.11%	-8.85%

* Financial Sector Average

Performance Comparison

GHLD

Guild Holdings

12.81

-0.18

-1.39%

BRKL

Brookline Bancorp

9.57

0.89

10.25%

OCFC

Oceanfirst Financial

14.76

0.75

5.35%

BBDC

Barings BDC

8.37

0.18

2.20%

CNOB

ConnectOne Bancorp

20.95

3.62

20.89%

Guild Holdings Earnings Call Summary

Earnings Call Date: Mar 6, 2025 | % Change Since: 1.67% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant growth in originations, net income, and purchase volumes, alongside strategic acquisitions and industry recognition. However, challenges such as the decrease in retained MSR and ongoing rate headwinds were noted. Overall, the highlights significantly outweigh the lowlights.

Highlights

Exceptional Growth in Originations

Total originations increased 57% year over year to $24 billion, outpacing the industry's 22% growth as per the Mortgage Bankers Association.

Record Net Income and Revenue

Net income attributable to Guild was $97.1 million compared to a net loss of $39 million in the prior year. Adjusted net income rose 88% to $90.2 million.

Strong Performance in Purchase Originations

Purchase originations accounted for 88% of closed loan volumes, significantly outperforming the industry average of 72%.

Expansion of Servicing Portfolio

Servicing portfolio grew to $93 billion, a 9% increase from the previous year, maintaining high quality.

Successful Integration and Growth

Acquisitions and organic growth resulted in doubling the number of loan officers since 2020, contributing to above-industry-average loan production.

Industry Recognition and Awards

Guild received multiple industry awards, including being named the most reviewed lender on Zillow.com and receiving Fannie Mae's star performer recognition for the eighth consecutive year.

Lowlights

Decrease in Retained MSR

The UPB of retained MSR has been gradually decreasing, down 13% to 15% year over year, influenced by aggressive service release correspondent pricing.

Challenges with Rate Environment

Expectations of ongoing rate headwinds may lead to quarter-to-quarter variability, affecting the potential for refinance activity.

Company Guidance

In the Guild Holdings Company's fourth quarter and full year 2024 earnings call, the company reported significant growth across various metrics. Total originations increased by 57% year-over-year to $24 billion, surpassing the industry's 22% growth. Net revenue rose by 60% to $1 billion, while expenses increased by only 33%, highlighting operational efficiency. The company achieved a net income of $97.1 million compared to a prior year net loss of $39 million. Adjusted net income grew by 88% to $90.2 million, and adjusted EBITDA increased by 80% to $134.8 million. The company's gain on sale margin for the year was 332 basis points, with a fourth-quarter margin of 317 basis points. The purchase origination segment represented 88% of the closed loan volume, outperforming the industry average of 72%. The servicing portfolio grew to $93 billion, with a 9% increase from the prior year, and the refinance capture rate improved to 44%. The company maintained a HUD tier one rating for its servicing business. Looking ahead, Guild Holdings plans to continue leveraging its expanded loan officer network and make strategic investments in technology to further drive growth and market share gains.

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.