Onity Group (ONIT)
NYSE:ONIT
Top Page
Onity Group
(NYSE:ONIT)
Select Model
Select Model
Rating:54Neutral
Price Target:
$38.00
▼(-10.97% Downside)
Action:ReiteratedDate:02/25/26
The score is held down primarily by high leverage and very weak cash flow despite improved reported profitability. Technicals are also bearish with the stock below key moving averages and negative MACD. Offsetting these, valuation appears very cheap (P/E ~2) and the latest call provided constructive 2026 ROE guidance and growth/liquidity initiatives, but execution risks (delinquencies and transition/restructuring costs) remain meaningful.
Positive Factors
Subservicing and Servicing UPB Growth
Large, recurring subservicing wins and rising owned servicing UPB create a durable fee revenue base and scale economics. Continued boardings and a healthy pipeline reduce originations cyclicality, improving predictable cash fees and long-term earnings visibility for the servicing franchise.
Negative Factors
Very High Leverage
Extremely elevated debt relative to equity constrains financial flexibility and magnifies downside risk from credit stress or market dislocations. High leverage increases refinancing and covenant risk, making the company more sensitive to funding costs and impairing capacity to invest or absorb operational shocks.
Read all positive and negative factors
Positive Factors
Negative Factors
Subservicing and Servicing UPB Growth
Large, recurring subservicing wins and rising owned servicing UPB create a durable fee revenue base and scale economics. Continued boardings and a healthy pipeline reduce originations cyclicality, improving predictable cash fees and long-term earnings visibility for the servicing franchise.
Read all positive factors
Onity Group (ONIT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$363.70M
Dividend YieldN/A
Average Volume (3M)38.11K
Price to Earnings (P/E)1.9
Beta (1Y)1.17
Revenue Growth-6.28%
EPS Growth112.66%
CountryUS
Employees4,200
SectorFinancial
Sector Strength70
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)14.24
Shares Outstanding8,521,636
10 Day Avg. Volume41,595
30 Day Avg. Volume38,107
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.54
Price to Sales (P/S)0.34
P/FCF Ratio-0.49
Enterprise Value/Market Cap40.91
Enterprise Value/Revenue12.60
Enterprise Value/Gross Profit20.90
Enterprise Value/Ebitda53.75
Forecast
1Y Price Target
$60.00Price Target Upside40.58% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)11
Revenue Forecast (FY)$1.18B
Onity Group Business Overview & Revenue Model
Company Description
Onity 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 segme...
How the Company Makes Money
Onity Group makes money primarily through mortgage-related operations. Key revenue sources include: (1) Mortgage origination revenue: income earned from originating residential mortgage loans, which can include gains on sale when loans are sold in...
Onity Group Key Performance Indicators (KPIs)
Onity Group Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call emphasized strong operational execution and several material positives—record origination volumes (44% YoY), revenue growth (+25% YoY in Q4), effective MSR hedging, a $120M valuation allowance release that materially increased book value, robust subservicing growth, and improved liquidity actions. Key near-term challenges include elevated delinquencies and ~$14M incremental MSR runoff in Q4 driven by FHA rule changes and a government shutdown, transition costs and restructuring related to the Rithm portfolio (~$19M–$20M), and higher projected effective tax rates. On balance, the positive drivers (large origination growth, profitability improvements, capital and hedging actions, and technology investments) materially outweigh the manageable and largely identifiable near-term headwinds.Positive Updates
Record Origination Volume and Revenue Growth
Originations delivered record funded volume in Q4; originations volume grew 44% year-over-year in 2025 versus 18% for the overall industry. Company revenue was up 25% year-over-year in Q4 and 6% sequentially, and originations adjusted pretax income was significantly higher both YoY and sequentially.
Negative Updates
Incremental MSR Runoff from FHA Rule Changes and Government Shutdown
Q4 was impacted by approximately $14,000,000 of incremental MSR runoff driven by higher delinquencies caused by FHA loan modification rule changes (effective 10/1/2025) and a six-week government shutdown; FHA borrower delinquency rate rose about 80 basis points Q4 vs Q3.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Origination Volume and Revenue Growth
Originations delivered record funded volume in Q4; originations volume grew 44% year-over-year in 2025 versus 18% for the overall industry. Company revenue was up 25% year-over-year in Q4 and 6% sequentially, and originations adjusted pretax income was significantly higher both YoY and sequentially.
Read all positive updates
Company Guidance
For 2026 the company is guiding to an adjusted ROE of 13%–15% (16%–18% on a pretax-equivalent basis absent the $120 million deferred tax valuation allowance release), noting the valuation release increased equity (reducing ROE by roughly 300 bps) and left a remaining valuation allowance of about $26 million; management expects an effective tax rate of 28%–30%, combined Rithm-related restructuring and Finance of America indemnifications of $19–20 million (GAAP-impacting but excluded from adjusted ROE), servicing book UPB growth of 5%–15% (which assumes the nonrenewal of the Rithm contract that had ~$32 billion UPB at year-end 2025), continued high hedge effectiveness, projected subservicing additions of $28 billion (with eight new clients to board and eight agreements under negotiation), roughly $100 million of proceeds expected from the Finance of America Reverse MSR transaction upon closing, year-end liquidity of $2.5 billion (including $181 million unrestricted cash), a recent $200 million add-on high‑yield note issued at an effective 8.5%, and a debt-to-equity ratio of about 2.6x.Onity Group Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
18
Very Negative
Cash Flow
12
Very Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.07B | 1.07B | 1.14B | 999.50M | 1.08B |
| Gross Profit | 1.01B | 495.60M | 584.50M | 459.20M | 521.00M |
| EBITDA | 580.33M | 256.10M | 238.80M | 285.50M | 235.80M |
| Net Income | 189.50M | 33.90M | -63.70M | 25.70M | 18.10M |
Balance Sheet | |||||
| Total Assets | 16.17B | 16.44B | 12.51B | 12.40B | 12.15B |
| Cash, Cash Equivalents and Short-Term Investments | 180.50M | 184.80M | 201.60M | 208.00M | 192.80M |
| Total Debt | 14.69B | 14.74B | 10.93B | 10.46B | 10.47B |
| Total Liabilities | 15.49B | 15.94B | 12.11B | 11.94B | 11.67B |
| Stockholders Equity | 677.80M | 492.90M | 401.80M | 456.70M | 476.70M |
Cash Flow | |||||
| Free Cash Flow | -748.00M | -688.70M | -111.80M | -31.70M | -1.30B |
| Operating Cash Flow | -748.00M | -651.00M | 10.40M | 173.20M | -468.40M |
| Investing Cash Flow | 1.85B | 478.50M | -100.30M | -149.10M | -1.01B |
| Financing Cash Flow | -1.10B | 182.90M | 70.80M | -13.40M | 1.38B |
Onity Group Technical Analysis
Positive
42.68
Price Trends
41.06
Positive
43.49
Negative
41.46
Positive
Market Momentum
0.34
Negative
61.42
Neutral
90.75
Negative
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 42.68 is above the 20-day moving average (MA) of 39.29, above the 50-day MA of 41.06, and above the 200-day MA of 41.46, indicating a bullish trend. The MACD of 0.34 indicates Negative momentum. The RSI at 61.42 is Neutral, neither overbought nor oversold. The STOCH value of 90.75 is Negative, 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 67 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $247.49M | 3.56 | 8.71% | ― | 3.25% | -37.79% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
62 Neutral | $750.96M | 7.28 | 16.95% | ― | 36.73% | 27.50% | |
54 Neutral | $363.70M | 1.94 | 33.38% | ― | -6.28% | 112.66% | |
53 Neutral | $74.57M | 17.89 | 3.21% | ― | ― | -30.69% | |
49 Neutral | $21.53M | -0.19 | -1.25% | ― | ― | ― | |
46 Neutral | $120.06M | -20.98 | -2.01% | 18.74% | -12.56% | -69.72% |
* Financial Sector Average
ONIT
Onity Group
42.68
12.82
42.93%
GHI
Greystone Housing Impact Investors
5.16
-4.77
-48.06%
SNFCA
Security National Financial
9.55
0.83
9.48%
CNF
CNFinance Holdings
3.14
-3.61
-53.48%
IOR
Income Opportunity Realty Investors
18.34
0.59
3.32%
VEL
Velocity Financial
19.14
1.93
11.21%
Onity Group Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Onity Group Hosts Presentation at Leveraged Finance Conference
Neutral
Mar 3, 2026
On March 3, 2026, Onity Group Inc.’s Executive Vice President and Chief Financial Officer, Sean O’Neil, was scheduled to host an investor presentation at the J.P. Morgan 2026 Global Leveraged Finance Conference. The company made the as...
Executive/Board Changes
Onity Group Appoints New Senior Vice President, CAO
Positive
Feb 24, 2026
Onity Group Inc., a leading non-bank mortgage servicing and originations provider, operates through its PHH Mortgage and Liberty Reverse Mortgage brands across the United States and select international locations. The company focuses on large-scal...
Business Operations and StrategyStock BuybackFinancial Disclosures
Onity Group Announces Record 2025 Results, Buyback Plan
Positive
Feb 12, 2026
On February 12, 2026, Onity Group reported record 2025 results, with net income attributable to common stockholders of $185 million, diluted EPS of $21.46, a 35% ROE and a $17 year-on-year increase in book value per share to $74. Full-year GAAP re...
Business Operations and StrategyPrivate Placements and Financing
Onity Group Expands PHH Senior Notes Debt Financing
Positive
Feb 2, 2026
On January 30, 2026, Onity Group Inc. announced that its subsidiaries PHH Corporation and PHH Escrow Issuer LLC completed a $200 million issuance of 9.875% Senior Notes due 2029. These new PHH Senior Notes are an additional tranche to the existing...
Business Operations and StrategyPrivate Placements and Financing
Onity Group Adds $200M Senior Notes to 2029 Issue
Positive
Jan 30, 2026
On January 30, 2026, Onity Group Inc. announced that its subsidiaries PHH Corporation and PHH Escrow Issuer LLC had closed a $200 million offering of 9.875% Senior Notes due 2029, an additional issuance that forms a single series with $500 million...
Business Operations and StrategyPrivate Placements and Financing
Onity Group Prices Additional Senior Notes to 2029
Positive
Jan 26, 2026
On January 26, 2026, Onity Group announced that subsidiaries PHH Corporation and PHH Escrow Issuer LLC had priced an additional $200 million aggregate principal amount of 9.875% senior notes due 2029 at 103.25% of par, implying a yield-to-worst of...
Business Operations and StrategyPrivate Placements and Financing
Onity Group Announces Additional Senior Notes Offering
Positive
Jan 26, 2026
On January 26, 2026, Onity Group announced that subsidiaries PHH Corporation and PHH Escrow Issuer LLC launched an offering of $150 million in additional 9.875% senior notes due 2029, which will form a single series with the $500 million of identi...
Executive/Board ChangesShareholder Meetings
Onity Group Appoints New Independent Director to Board
Neutral
Jan 5, 2026
On December 30, 2025, Onity Group Inc. appointed Dawn C. Morris, founder and CEO of strategic consulting firm Growth Partners Group and an experienced financial services and marketing executive, to its board of directors effective January 1, 2026,...
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.