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Onity Group (ONIT)
NYSE:ONIT
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Onity Group
(NYSE:ONIT)
64Neutral
Onity Group (ONIT) vs. S&P 500 (SPY)
Market Cap
$247.61M
Dividend YieldN/A
Average Volume (3M)46.86K
Price to Earnings (P/E)7.9
Beta (1Y)1.41
Revenue Growth-7.86%
EPS GrowthN/A
CountryUS
Employees4,300
SectorFinancial
Sector Strength82
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)4.09
Shares Outstanding7,873,053
10 Day Avg. Volume43,381
30 Day Avg. Volume46,856
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.27
Price to Cash Flow (P/CF)-0.30
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$42.50Price Target Upside31.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Onity Group Business Overview & Revenue Model
Company DescriptionOnity Group Inc., a financial services company, originates and services forward and reserve mortgage loans in the United States, the United States Virgin Islands, India, and the Philippines. It operates through the Servicing and Originations segments. The company offers owned mortgage servicing rights and subservicing products; conventional, government-insured, and non-agency mortgage loans, as well as reverse mortgage and multi-family loans; and residential forward mortgage and small commercial mortgage loans. It also originates and purchases conventional and government-insured residential forward and reverse mortgage loans through its correspondent lending arrangements, broker relationships, and retail channels. The company offers its services under the PHH Mortgage and Liberty Reverse Mortgage brands. It serves financial institutions. The company was formerly known as Ocwen Financial Corporation and changed its name to Onity Group Inc. in June 2024. Onity Group Inc. was founded in 1988 and is headquartered in West Palm Beach, Florida.
How the Company Makes Moneynull
Onity Group Financial Statement Overview
Summary
Onity Group faces significant financial challenges, highlighted by declining revenue, high leverage, and negative cash flows. Improvements in net income and stockholders' equity are overshadowed by operational and cash flow difficulties.Income Statement
The company's income statement shows mixed results. There is a declining trend in revenue from 2023 to 2024, with total revenue dropping from $1.14 billion to $1.07 billion. The gross profit margin has decreased, and the net income moved from a loss in 2023 to a modest profit in 2024. However, EBIT is zero in 2024, indicating operational challenges. The net profit margin improved from a negative in 2023 to a positive, but still low, in 2024, suggesting an ongoing struggle to convert revenue into profit.55
Neutral
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio, indicating significant leverage, which increases financial risk. Stockholders' equity has increased since 2023, which is a positive sign of improved equity position, yet the equity ratio remains low due to high total liabilities. The return on equity remains low, reflecting limited profitability relative to equity.45
Neutral
Cash Flow
Cash flow analysis shows considerable challenges, with negative operating cash flow and free cash flow in 2024 indicating cash outflows. The operating cash flow to net income ratio is unfavorable, suggesting difficulties in converting net income into cash. The negative free cash flow growth rate emphasizes ongoing struggles in generating cash from operations.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.07B | 1.14B | 877.20M | 1.05B | 951.06M |
| Gross Profit | ||||
| 495.60M | 584.50M | 797.50M | 927.00M | 854.67M |
| EBIT | ||||
| 0.00 | 392.40M | 14.80M | 10.27M | 19.12M |
| EBITDA | ||||
| 256.10M | 238.80M | 408.70M | 451.90M | 175.50M |
| Net Income Common Stockholders | ||||
| 33.90M | -63.70M | 25.70M | -4.37M | -105.68M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 184.80M | 213.10M | 274.20M | 263.45M | 357.26M |
| Total Assets | ||||
| 16.44B | 12.51B | 1.10B | 1.34B | 963.59M |
| Total Debt | ||||
| 14.74B | 10.93B | 8.44B | 8.56B | 7.90B |
| Net Debt | ||||
| 14.55B | 10.73B | 8.17B | 8.30B | 7.54B |
| Total Liabilities | ||||
| 15.94B | 12.11B | 100.00K | 92.00K | 87.00K |
| Stockholders Equity | ||||
| 492.90M | 401.80M | 12.40B | 12.15B | 10.65B |
| Cash Flow | Free Cash Flow | |||
| -807.00M | -111.80M | -61.80M | -1.34B | -229.64M |
| Operating Cash Flow | ||||
| -573.80M | 10.40M | 144.90M | -492.77M | 47.68M |
| Investing Cash Flow | ||||
| 401.30M | -100.30M | -120.80M | -980.83M | -314.58M |
| Financing Cash Flow | ||||
| 182.90M | 70.80M | -13.40M | 1.38B | 131.83M |
Onity Group Technical Analysis
Positive
32.27
Price Trends
33.54
Negative
32.42
Negative
30.00
Positive
Market Momentum
-0.07
Negative
50.90
Neutral
33.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ONIT, the sentiment is Positive. The current price of 32.27 is above the 20-day moving average (MA) of 31.31, below the 50-day MA of 33.54, and above the 200-day MA of 30.00, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 50.90 is Neutral, neither overbought nor oversold. The STOCH value of 33.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ONIT.
Onity Group Risk Analysis
Onity Group disclosed 64 risk factors in its most recent earnings report. Onity Group reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Onity Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $40.99B | 110.06 | 19.10% | ― | 33.32% | 111.64% | |
78 Outperform | $7.10B | 15.57 | 14.41% | 2.72% | -13.19% | 10.03% | |
77 Outperform | $52.88B | 30.59 | 9.80% | 1.86% | -4.53% | -14.72% | |
68 Neutral | $11.26B | 19.13 | 42.39% | 1.47% | 3.33% | 11.51% | |
64 Neutral | $247.61M | 7.90 | 7.58% | ― | -7.86% | ― | |
63 Neutral | $14.36B | 9.94 | 8.93% | 4.37% | 16.37% | -11.73% | |
60 Neutral | $14.56B | 18.30 | -118.61% | 1.72% | -1.74% | -6.91% |
* Financial Sector Average
Performance Comparison
ONIT
Onity Group
32.27
7.04
27.90%
JCI
Johnson Controls
81.40
17.16
26.71%
MAS
Masco
69.84
-6.14
-8.08%
AXON
Axon Enterprise
541.20
231.84
74.94%
ALLE
Allegion
131.00
1.38
1.06%
ADT
Adt
8.16
1.97
31.83%
Onity Group Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -17.78% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance for Onity Group in 2024, with significant achievements in adjusted ROE, net income, servicing and origination growth, and successful debt restructuring. However, the fourth quarter GAAP net loss due to debt restructuring charges and some decline in reverse servicing revenue were notable lowlights. Overall, the positive achievements outweigh the negatives.Highlights
Adjusted ROE and Net Income Achievement
For the full year 2024, Onity Group delivered an adjusted ROE of 20% and the highest net income since 2013, despite previously disclosed debt restructuring costs.
Debt Restructuring Success
The company successfully restructured corporate debt, reducing both the level and average effective cost, extending maturity, and simplifying the structure.
Servicing Additions and Client Growth
Total servicing additions increased by 70% over 2023, growing the portfolio to over $300 billion, including a record addition of 16 new subservicing clients and $30 billion of subservicing additions.
Origination Volume Growth
Origination volume was up 33% in 2024 versus 2023, outperforming the industry average of 17% growth.
AI and Technology Investments
Investments in artificial intelligence applications and technology have led to significant improvements in business performance, including over 30 bots saving 50,000 hours monthly and 88% of customer inquiries resolved digitally.
Lowlights
Fourth Quarter GAAP Net Loss
The fourth quarter GAAP net loss reflects a charge to earnings of $41 million for the restructuring of corporate debt, resulting in a negative 25% ROE for the quarter.
Reverse Servicing Revenue Decline
Full-year reverse servicing revenue declined due to substantial prior-year gains not repeated in 2024 and lower revenue as UPB declined.
Company Guidance
During the Onity Group’s Fourth Quarter Earnings Call, significant metrics were highlighted, showcasing the company's robust performance in 2024. The company reported a 20% adjusted Return on Equity (ROE), exceeding their guidance of 12% plus, and achieved the highest net income since 2013 despite restructuring costs. They reduced corporate debt levels and costs, maintaining a target hedge coverage ratio of 90% to 110%, and reported a favorable MSR valuation adjustment. Total servicing additions increased by 70% compared to 2023, with a portfolio growth to over $300 billion, including $15 billion in MSR sales. The fourth quarter alone saw $25 billion in servicing additions, marking the highest since Q2 2022. For the full year, adjusted pretax income was reported at $90 million, an 84% increase from 2023, and the GAAP net income attributable to common stockholders stood at $33 million. For 2025, the company increased their adjusted ROE guidance and affirmed their strategic focus on leveraging technology and expanding their product offerings to sustain growth and profitability.Onity Group Corporate Events
Business Operations and StrategyFinancial Disclosures
Onity Group Reports Strong Q1 2025 Performance
Positive
Mar 20, 2025
On March 20, 2025, Onity Group Inc. hosted an investor presentation at the Sidoti March Virtual Investor Conference, where they provided a preliminary update on their financial and operating performance for the first quarter of 2025. The company reported a significant increase in originations volume compared to the first quarter of 2024, driven by their Correspondent and Co-Issue channels. Additionally, Onity launched an improved closed-end second originations product in February 2025, which has been well received by borrowers. The company also made progress in servicing growth, completing bulk MSR purchases, and adding new subservicing clients. Effective hedging strategies have contributed to consistent net income and GAAP ROE results, and there is potential for releasing some or all of the valuation allowance against its $180 million net U.S. deferred tax asset by year-end 2025.
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.