Newtek Business (NEWT) AI Stock Analysis

• Market Cap: $288.73M
• Dividend Yield: 7.22%
• Average Volume (3M): 283.95K
• Price to Earnings (P/E): 5.4
• Beta (1Y): 1.06
• Revenue Growth: 33.15%
• EPS Growth: 18.48%
• Country: US
• Employees: 591
• Sector: Financial
• Sector Strength: 85
• Industry: Asset Management
• EPS (TTM): 1.94
• Shares Outstanding: 27,289,871
• 10 Day Avg. Volume: 221,877
• 30 Day Avg. Volume: 283,955
• PEG Ratio: 0.29
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 5.76
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 6.99
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $14.67
• Price Target Upside: 38.66% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

Newtek's overall stock score is moderately low at 56. This reflects significant financial challenges, with zero revenue reported in 2024 and liquidity concerns. However, the stock appears undervalued with a low P/E ratio and high dividend yield, and the earnings call points to potential growth. Technical analysis indicates bearish momentum, suggesting caution. Strengthening revenue and cash flow are crucial for future stability, while the company must navigate credit risks and macroeconomic challenges.

Newtek Business Business Overview & Revenue Model

Company Description

Newtek Business Services Corp. is a business development company specializing in providing financial and business services to the small-and medium-sized business market in the United States. The firm also seeks to invest in early stage businesses. The firm seeks to makes both debt and equity investments. Under debt investments, it focuses on first lien loans, which have terms of 1 to 25 years; second lien loans, which have terms of 5 to 25 years, and unsecured loans, which are provided to meet short-term funding needs and are repaid within 6 to 12 months. It operates through Electronic Payment Processing, Managed Technology Solutions, Small Business Finance, and Capcos segments. The company originates small business administration loans for the purpose of acquiring commercial real estate, machinery, equipment, and inventory, as well as to refinance debt and fund franchises, working capital, and business acquisitions; and offers small business loan servicing and consulting services to the Federal Deposit Insurance Corporation and various other financial institutions, as well as provides management services. Its electronic payment processing services include credit and debit card processing, check approval, ancillary processing equipment and software to merchants, eCommerce, electronic solutions to accept non-cash payments, check conversion, remote deposit capture, ACH processing, and electronic gift and loyalty card programs. The company also provides Website hosting, dedicated server, and cloud hosting services; Web design and development; Internet marketing; data storage and backup and other related services; and ecommerce services, such as payment processing, online shopping cart tools, Website design and Web related services; Accounts Receivable Financing, and The Secure Gateway. In addition, it offers Newtek Advantage, a mobile, real-time operating platform enabling a business to access data on a smartphone, tablet, laptop, or PC for eCommerce, credit/debit transactions, Website statistics, payroll, insurance, and business loans. Further, the company sells personal, commercial, and health/benefits lines of insurance products; and payroll management processing and employee tax filing services. It has strategic alliances with American International Group, CTAA, Navy Federal Credit Union, Credit Union National Association, Pershing, and others to provide agent services to small business clients. The firm seeks to invest in New York and Louisiana area. The firm seeks to invest $0.3 million to $3 million in businesses. It provides small business terms loans ranging from $0.05 million to $10 million. The firm also provides account receivable financing ranging from $0.05 million to $1.5 million. It also provides $0.05 million to $10 million financing to owner occupied real estate businesses whose average net income over the last 2 years must not exceed $2.5 million. Newtek Business Services Corp.,was founded in 1998 and converted to a BDC company in 2014 and is headquartered in Boca Raton, Florida with additional offices in Lake Success, New York, Garden City, New York; Miami, Florida; Milwaukee, Wisconsin; New Orleans, Louisiana; and New York, New York.

How the Company Makes Money

Newtek Business Services Corp. generates revenue through several key streams. Primarily, it earns income from interest and fees on its small business loans, including SBA 7(a) loans and other financing products. Additionally, the company makes money through fees from its electronic payment processing services, where it facilitates transactions for its clients. Newtek also earns revenue from its managed technology solutions, which include IT services and cloud computing, as well as from payroll and benefits processing services. These diversified revenue streams are supported by strategic partnerships with financial institutions and technology providers, enhancing Newtek's ability to deliver comprehensive solutions to its business clients.

Newtek Business Financial Statement Overview

Summary

Newtek Business faces significant financial challenges with zero revenue reported in 2024, despite previous growth. Debt reduction is positive, but profitability and cash flow sustainability remain concerns, especially with negative free cash flow.

Income Statement

Newtek Business has experienced inconsistent revenue growth, with a significant drop in revenue to zero in 2024 from $253 million in 2023. Historical data shows fluctuating profit margins, with a net profit margin of 18.7% in 2023. The company has struggled to maintain EBIT and EBITDA margins due to operational challenges.

Balance Sheet

The company has improved its debt position, with total debt dropping to zero in 2024, indicating strong debt management. However, the equity ratio decreased from 25.6% in 2023 to 14.4% in 2024, which may pose risks if asset growth does not translate into profitability.

Cash Flow

Newtek Business has faced significant cash flow challenges, as indicated by negative free cash flow in recent years. The operating cash flow to net income ratio was negative in 2023, showing inefficiencies in converting income to cash. The lack of free cash flow in 2024 raises concerns about liquidity and operational funding.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
237.74M	253.14M	105.17M	147.76M	74.96M
	Gross Profit
237.74M	208.83M	84.98M	117.95M	56.27M
	EBIT
-151.59M	97.53M	65.10M	85.47M	32.62M
	EBITDA
0.00	125.70M	23.24M	106.51M	51.95M
	Net Income Common Stockholders
50.85M	47.33M	32.31M	84.14M	33.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
30.86M	153.09M	72.86M	2.40M	2.07M
	Total Assets
2.06B	1.44B	998.90M	1.06B	840.98M
	Total Debt
714.54M	644.12M	547.30M	481.11M	460.48M
	Net Debt
-6.94M	644.12M	493.61M	478.71M	458.41M
	Total Liabilities
1.76B	1.18B	623.54M	652.67M	501.63M
	Stockholders Equity
296.28M	249.05M	375.36M	403.89M	339.35M
Cash Flow		Free Cash Flow
-153.45M	-89.06M	-62.43M	140.92M	17.75M
	Operating Cash Flow
-153.01M	-88.60M	-62.42M	140.92M	17.76M
	Investing Cash Flow
-209.05M	-172.24M	-11.00K	-32.34M	-10.00K
	Financing Cash Flow
560.90M	344.97M	1.18M	-5.49M	465.00K

Newtek Business Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEWT, the sentiment is Negative. The current price of 10.58 is above the 20-day moving average (MA) of 10.27, below the 50-day MA of 11.36, and below the 200-day MA of 12.29, indicating a neutral trend. The MACD of -0.20 indicates Negative momentum. The RSI at 46.49 is Neutral, neither overbought nor oversold. The STOCH value of 47.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NEWT.

Newtek Business Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SWKH	80 Outperform	$162.72M	11.30	5.13%	―	23.75%	-5.64%
LIEN	75 Outperform	$237.33M	11.18	4.98%	11.25%	―	―
SAR	68 Neutral	$357.37M	10.03	9.28%	12.04%	-24.05%	28.25%
WHF	67 Neutral	$222.90M	20.54	3.60%	16.13%	-27.52%	-46.85%
Sector *	64 Neutral	$12.65B	9.74	8.04%	17044.64%	12.65%	-5.11%
TPVG	59 Neutral	$241.23M	7.33	9.26%	21.63%	22.53%	―
NEWT	56 Neutral	$288.73M	5.41	18.65%	7.22%	33.15%	18.48%

Newtek Business Corporate Events

Newtek Business Announces Leadership Changes at Newtek Bank

On April 21, 2025, Newtek Business announced leadership changes at Newtek Bank, N.A., with Nicolas Young resigning as President and COO, effective May 16, 2025. Peter Downs, previously the Chief Lending Officer, was appointed as the new President, effective April 22, 2025. Additionally, Frank DeMaria was named Chief Financial Officer of the company, while M. Scott Price continued as CFO of the bank. These appointments are part of strategic leadership restructuring aimed at strengthening the company’s operational and financial strategies.

Spark’s Take on NEWT Stock

According to Spark, TipRanks’ AI Analyst, NEWT is a Neutral.

Newtek’s overall stock score is moderately low at 56. This reflects significant financial challenges, with zero revenue reported in 2024 and liquidity concerns. However, the stock appears undervalued with a low P/E ratio and high dividend yield, and the earnings call points to potential growth. Technical analysis indicates bearish momentum, suggesting caution. Strengthening revenue and cash flow are crucial for future stability, while the company must navigate credit risks and macroeconomic challenges.

To see Spark’s full report on NEWT stock, click here.

Newtek Business Board Restructures After Director Retirement

On April 1, 2025, Salvatore Mulia retired from the NewtekOne, Inc. Board of Directors, where he had served since 2004. Following his retirement, the Board reduced its size from eight to seven members, and Fernando Perez-Hickman was appointed to the Audit Committee, potentially impacting the company’s governance dynamics.