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OneMain Holdings (OMF)
NYSE:OMF
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OneMain Holdings
(NYSE:OMF)
66Neutral
Positive Factors
Credit Trends
The significant improvement in credit trends is in response to the company’s tightened underwriting, and not to any identifiable macro development.
Market Share
OMF commands a 20% market share of the $110B non-prime personal loan market.
Negative Factors
Earnings Expectations
There is downside to consensus adj-C&I EPS estimates based on a slower than expected pace of credit improvement.
Stock Valuation Pressure
OMF is added to the Evercore ISI Tactical Underperform List as recalibration of Street estimates could pressure the shares near term.
OneMain Holdings (OMF) vs. S&P 500 (SPY)
Market Cap
$5.78B
Dividend Yield8.6%
Average Volume (3M)1.11M
Price to Earnings (P/E)11.4
Beta (1Y)1.42
Revenue Growth7.96%
EPS Growth-20.11%
CountryUS
Employees9,000
SectorFinancial
Sector Strength81
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)4.24
Shares Outstanding119,368,020
10 Day Avg. Volume1,277,079
30 Day Avg. Volume1,112,385
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.44
Price to Cash Flow (P/CF)2.00
P/FCF Ratio1.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$62.67Price Target Upside29.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
OneMain Holdings Business Overview & Revenue Model
Company DescriptionOneMain Holdings, Inc. (OMF) is a leading financial services company in the United States, specializing in providing personal loans and other financial products to non-prime consumers. The company operates through a wide network of branches and its online platform, offering services like credit insurance and optional credit-related products alongside its core lending operations. Established to help individuals with limited access to traditional banking, OneMain focuses on delivering responsible lending solutions tailored to meet the needs of its customers.
How the Company Makes MoneyOneMain Holdings generates revenue primarily through the interest and fees charged on personal loans issued to its customers. These loans typically cater to non-prime borrowers who may not qualify for credit from traditional financial institutions, allowing OneMain to charge higher interest rates to mitigate risk. Additionally, the company earns money from the sale of credit insurance products, which are often bundled with its loans, providing customers with financial protection in the event of unforeseen circumstances. OneMain's revenue model is supported by its extensive network of branches and a robust online presence, enabling it to reach a broad customer base. Key factors contributing to its earnings include effective risk management strategies, customer retention initiatives, and strategic partnerships that enhance its service offerings.
OneMain Holdings Financial Statement Overview
Summary
OneMain Holdings shows strong revenue growth and profitability in the income statement, but a declining net profit margin raises concerns. The balance sheet reveals high leverage, posing potential risks if not managed carefully. Cash flow performance is robust, with strong cash conversion metrics, although free cash flow growth has slowed.Income Statement
The income statement demonstrates strong profitability, with high gross and EBIT margins of 75.68% and 71.67% respectively for the TTM. However, net profit margin decreased to 11.61% TTM from 25.04% in the previous year. Revenue growth was significant, with a TTM increase of 71.24% compared to the previous year. Despite this, the decline in net profit margin indicates potential pressure on net income.70
Positive
Balance Sheet
The balance sheet shows high leverage, with a debt-to-equity ratio of 6.72 TTM, indicating significant reliance on debt financing. The equity ratio is low at 12.32%, suggesting limited equity buffer. Return on Equity (ROE) is relatively modest at 15.95% TTM, reflecting moderate profitability against equity.60
Neutral
Cash Flow
The cash flow statement indicates strong cash generation with an operating cash flow to net income ratio of 3.84 TTM. Free cash flow remained stable, and the free cash flow to net income ratio was high at 3.84 TTM, suggesting efficient conversion of income to cash flow. However, the free cash flow growth rate is negative, indicating a decline from the previous year.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 695.00M | 2.56B | 4.20B | 4.04B | 3.91B | Gross Profit |
| -184.00M | -26.00M | 3.42B | 3.33B | 3.20B | EBIT |
| -2.13B | 1.63B | 1.79B | 1.74B | 977.00M | EBITDA |
| 0.00 | 2.12B | 2.34B | 0.00 | 2.34B | Net Income Common Stockholders |
| 509.00M | 641.00M | 872.00M | 1.31B | 730.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.06B | 1.55B | 498.00M | 1.02B | 2.42B | Total Assets |
| 25.91B | 24.29B | 22.53B | 22.08B | 22.47B | Total Debt |
| 21.44B | 19.81B | 18.28B | 17.75B | 17.80B | Net Debt |
| 20.98B | 18.80B | 17.78B | 17.21B | 15.53B | Total Liabilities |
| 22.72B | 21.11B | 19.50B | 17.75B | 17.84B | Stockholders Equity |
| 3.19B | 3.19B | 3.03B | 3.09B | 3.44B |
| Cash Flow | Free Cash Flow | |||
| 2.70B | 2.52B | 2.39B | 2.25B | 2.21B | Operating Cash Flow |
| 2.70B | 2.52B | 2.39B | 2.25B | 2.21B | Investing Cash Flow |
| -3.27B | -2.86B | -2.12B | -2.14B | -751.00M | Financing Cash Flow |
| 130.00M | 932.00M | -326.00M | -1.81B | -370.00M |
OneMain Holdings Technical Analysis
Negative
48.40
Price Trends
52.78
Negative
52.96
Negative
49.30
Negative
Market Momentum
-0.58
Negative
41.68
Neutral
40.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OMF, the sentiment is Negative. The current price of 48.4 is below the 20-day moving average (MA) of 49.24, below the 50-day MA of 52.78, and below the 200-day MA of 49.30, indicating a bearish trend. The MACD of -0.58 indicates Negative momentum. The RSI at 41.68 is Neutral, neither overbought nor oversold. The STOCH value of 40.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OMF.
OneMain Holdings Risk Analysis
OneMain Holdings disclosed 40 risk factors in its most recent earnings report. OneMain 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
OneMain 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $39.94B | 8.96 | 24.68% | 1.76% | 15.46% | 45.83% | |
74 Outperform | $6.17B | 25.84 | 14.15% | ― | 13.70% | -9.00% | |
70 Outperform | $11.50B | 20.82 | 6.63% | 3.20% | 3.41% | -12.41% | |
67 Neutral | $66.17B | 14.98 | 7.86% | 1.38% | 9.06% | -3.02% | |
66 Neutral | $5.78B | 11.42 | 15.96% | 8.60% | 7.96% | -20.11% | |
65 Neutral | $20.38B | 6.13 | 22.96% | 1.91% | 19.73% | 65.57% | |
64 Neutral | $14.24B | 10.27 | 8.97% | 4.33% | 16.38% | -11.94% |
* Financial Sector Average
Performance Comparison
OMF
OneMain Holdings
48.40
2.05
4.42%
COF
Capital One Financial
173.53
30.38
21.22%
CACC
Credit Acceptance
513.13
-31.41
-5.77%
DFS
Discover Financial Services
158.73
31.71
24.96%
ALLY
Ally Financial
37.45
-0.95
-2.47%
SYF
Synchrony Financial
52.43
11.48
28.03%
OneMain Holdings Earnings Call Summary
Earnings Call Date: Jan 31, 2025 | % Change Since: -14.09% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in customer growth, capital generation, and improved credit trends, along with recognition for business excellence. However, these positives were counterbalanced by decreased net income, increased operating expenses, and higher interest expenses. The sentiment of the call is balanced.Highlights
Strong Customer Growth
Customer base grew 15% to 3.4 million customers in 2024.
Capital Generation and Revenue Growth
Generated $685 million of capital in 2024 and total revenue grew 9% in the fourth quarter.
Receivables Increase
Receivables grew 11% to $24.7 billion in 2024.
Improved Credit and Delinquency Trends
30 to 89 delinquency was 3.06%, down 22 basis points year-over-year. Net charge-offs were 7.9%, indicating better than usual seasonal trends.
Recognition and Awards
OneMain was recognized in Newsweek's Excellence Index and Time Magazine's America's Best Midsize Companies list.
Lowlights
Decreased Net Income
Fourth quarter GAAP net income was $126 million or $1.05 per diluted share, down from $1.38 per diluted share in the fourth quarter of 2023.
Higher Operating Expenses
Operating expenses were $422 million in the fourth quarter, up 10% compared to a year ago.
Increased Interest Expense
Interest expense for the fourth quarter was $310 million, up $39 million versus the prior year.
Company Guidance
During the OneMain Financial Fourth Quarter 2024 earnings call, the company provided guidance indicating a positive outlook for 2025. Key metrics include a 15% increase in the customer base to 3.4 million and an 11% growth in receivables to $24.7 billion. Capital generation for 2024 was $685 million, with an expectation for increased earnings and capital generation in 2025. The auto receivables grew to $2.4 billion, and the credit card portfolio expanded to 780,000 accounts. The company maintained a strong balance sheet, raising $3.9 billion in funding, and projected a 7% yield on its regular dividend. For 2025, OneMain anticipates receivables growth of 5% to 8%, revenue growth of 6% to 8%, and C&I net charge-offs of 7.5% to 8.0%. The company remains committed to investing in growth areas such as data science, technology, and product innovation.OneMain Holdings Corporate Events
Executive/Board Changes
OneMain Holdings Elects Andrew Macdonald to Board
Positive
Mar 17, 2025
On March 17, 2025, OneMain Holdings, Inc. announced the election of Andrew D. Macdonald to its Board of Directors. Macdonald, who is the CEO of Consilio LLC, brings extensive experience in legal technology solutions and enterprise legal services. His appointment is expected to enhance OneMain’s mission of improving financial well-being through his proven track record in leveraging technology and data science for business growth. The company continues to seek additional independent directors to strengthen its board.
DividendsFinancial Disclosures
OneMain Holdings Reports Q4 2024 Financial Results
Neutral
Jan 31, 2025
On January 31, 2025, OneMain Holdings reported its financial results for the fourth quarter of 2024, highlighting a quarterly net income of $126 million, a decrease from the previous year, alongside declaring a dividend of $1.04 per share. The company’s managed receivables grew to $24.7 billion, reflecting an 11% increase, with improvements in credit trends and consumer loan originations up by 16% from the previous year, indicating positive momentum for future profitability and shareholder value.
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.