Onity Group (ONIT) AI Stock Analysis

• Market Cap: $358.62M
• Dividend Yield: N/A
• Average Volume (3M): 36.33K
• Price to Earnings (P/E): 13.5
• Beta (1Y): 1.20
• Revenue Growth: -6.28%
• EPS Growth: 112.66%
• Country: US
• Employees: 4,200
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Mortgages
• EPS (TTM): 2.03
• Shares Outstanding: 8,058,874
• 10 Day Avg. Volume: 46,611
• 30 Day Avg. Volume: 36,334
• PEG Ratio: -0.05
• Price to Book (P/B): 0.49
• Price to Sales (P/S): 0.22
• P/FCF Ratio: -0.30
• Enterprise Value/Market Cap: 41.76
• Enterprise Value/Revenue: 13.30
• Enterprise Value/Gross Profit: 28.45
• Enterprise Value/Ebitda: 65.14
• 1Y Price Target: $55.00
• Price Target Upside: 23.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 9.5
• Revenue Forecast (FY): $997.80M

• Rating: 65 Neutral
• Price Target: $46.00 ▲(3.37% Upside)

Onity Group's overall stock score is driven by strong technical momentum and positive earnings call highlights. However, financial performance challenges, particularly in cash flow and leverage, weigh down the score. The valuation is reasonable, but the lack of a dividend yield is a minor negative.

Positive Factors

Technological Advancements

Onity's focus on AI and technology investments enhances its competitive edge, improving operational efficiency and customer satisfaction, which can drive long-term growth.

Record Origination Volume

Strong origination volume growth indicates robust demand for Onity's products, suggesting effective market positioning and potential for sustained revenue expansion.

Strong Financial Metrics

Exceeding financial guidance with strong pretax income and ROE reflects effective management and operational efficiency, supporting long-term financial health.

Negative Factors

High Leverage

High leverage increases financial risk, potentially limiting Onity's ability to invest in growth opportunities and manage economic downturns effectively.

Cash Flow Challenges

Negative cash flow growth suggests operational cash challenges, which could hinder Onity's ability to fund new projects and maintain financial flexibility.

Nonrenewal of Key Subservicing Portfolio

The nonrenewal of a significant subservicing portfolio could impact Onity's revenue and profitability, necessitating strategic adjustments to offset potential losses.

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 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 Money

Onity generates revenue through the sale of its electronic locking solutions and security products, which are typically sold directly to hotels, educational institutions, and commercial enterprises. Key revenue streams include hardware sales from electronic locks and access control devices, software licensing for security management systems, and ongoing maintenance and support services. Additionally, Onity benefits from partnerships with hospitality management companies and technology integrators, which help expand its market reach and customer base. The company's focus on innovation, such as the development of mobile access solutions, also plays a significant role in driving revenue growth by meeting evolving customer demands for convenience and security.

Onity Group Financial Statement Overview

Summary

Onity Group's financial statements reflect challenges in profitability, leverage, and cash flow management. High debt levels and inconsistent profitability pose risks, despite some operational efficiencies.

Income Statement

Onity Group's income statement shows a mixed performance. The gross profit margin has been relatively stable, but the net profit margin is weak due to inconsistent net income, with a recent return to profitability. Revenue growth has been inconsistent, with a decline in the latest year. EBIT and EBITDA margins are moderate, indicating operational efficiency but also highlighting challenges in maintaining profitability.

Balance Sheet

The balance sheet reveals high leverage, with a debt-to-equity ratio indicating significant reliance on debt financing. Return on equity is low, reflecting challenges in generating returns for shareholders. The equity ratio is weak, suggesting limited buffer against liabilities. Overall, the balance sheet indicates financial risk due to high debt levels.

Cash Flow

Cash flow analysis shows negative free cash flow growth, indicating cash outflows exceeding inflows. The operating cash flow to net income ratio is negative, highlighting operational cash challenges. Free cash flow to net income is also negative, suggesting difficulties in generating cash from operations. Overall, cash flow management appears strained.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.13B	1.07B	1.14B	999.50M	1.08B	976.80M
Gross Profit	526.50M	495.60M	584.50M	459.20M	521.00M	524.80M
EBITDA	229.90M	256.10M	238.80M	285.50M	235.80M	175.50M
Net Income	34.20M	33.90M	-63.70M	25.70M	18.10M	-40.20M
Balance Sheet
Total Assets	16.11B	16.44B	12.51B	12.40B	12.15B	10.65B
Cash, Cash Equivalents and Short-Term Investments	172.80M	184.80M	201.60M	208.00M	192.80M	284.80M
Total Debt	0.00	14.74B	10.93B	10.46B	10.47B	9.29B
Total Liabilities	15.56B	15.94B	12.11B	11.94B	11.67B	10.24B
Stockholders Equity	551.30M	492.90M	401.80M	456.70M	476.70M	415.37M
Cash Flow
Free Cash Flow	-1.09B	-688.70M	-111.80M	-31.70M	-1.30B	-16.30M
Operating Cash Flow	-735.40M	-651.00M	10.40M	173.20M	-468.40M	261.00M
Investing Cash Flow	1.51B	478.50M	-100.30M	-149.10M	-1.01B	-527.90M
Financing Cash Flow	-788.40M	182.90M	70.80M	-13.40M	1.38B	131.80M

Onity Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 44.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 44.5 is above the 20-day moving average (MA) of 41.05, above the 50-day MA of 39.63, and above the 200-day MA of 37.13, indicating a bullish trend. The MACD of 1.36 indicates Negative momentum. The RSI at 63.63 is Neutral, neither overbought nor oversold. The STOCH value of 83.58 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ONIT.

Onity Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VEL	68 Neutral	$755.44M	8.11	16.04%	―	36.73%	27.50%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
ONIT	65 Neutral	$358.62M	13.48	6.71%	―	-6.28%	112.66%
IOR	64 Neutral	$74.31M	17.31	3.36%	―	―	-30.69%
GHI	61 Neutral	$160.12M	35.89	1.99%	19.73%	-12.56%	-69.72%
SNFCA	61 Neutral	$205.99M	9.06	5.23%	―	3.25%	-37.79%
CNF	56 Neutral	$34.36M	―	―	―	―	―

Onity Group Corporate Events

Onity Group Inc. Reports Strong Earnings Call Performance

The recent earnings call of Onity Group Inc. painted a picture of robust performance, highlighting substantial growth in originations and financial metrics. The company showcased significant technological advancements and subservicing growth, although the nonrenewal of a key subservicing portfolio and higher runoff in servicing slightly dampened the overall positive sentiment.

Onity Group Reports Strong Q3 2025 Earnings

Onity Group Inc. is a prominent non-bank financial services company specializing in mortgage servicing and originations through its brands PHH Mortgage and Liberty Reverse Mortgage, with operations across the United States and internationally. In its third quarter of 2025, Onity Group reported a net income of $18 million, with a diluted EPS of $2.03 and a return on equity of 14%. The company also achieved a significant increase in originations volume, reaching $12 billion, which is a 39% year-over-year growth, surpassing the industry average. Additionally, the book value per share rose to $62, reflecting a $2.71 increase from the previous year. Key highlights from the quarter include a robust adjusted pre-tax income of $31 million and an annualized adjusted return on equity of 25%. The company added nine new subservicing clients and saw a 32% year-over-year increase in commercial servicing UPB. Despite the non-renewal of subservicing agreements with Rithm Capital Corp., which represented 10% of PHH’s total servicing UPB, Onity expects no material financial impact due to the portfolio’s low profitability and plans to replace it with more lucrative consumer and commercial relationships. Looking ahead, Onity Group anticipates exceeding its adjusted ROE guidance for 2025, driven by its strategic focus on profitable growth and technological advancements, underscoring its commitment to delivering strong shareholder returns.

Onity Group Faces Client Non-Renewal, Plans Restructuring

On October 31, 2025, Onity Group Inc. announced that Rithm Capital Corp., one of its largest subservicing clients, will not renew its subservicing agreements, effective January 31, 2026. These agreements accounted for a significant portion of Onity’s servicing portfolio, including a large share of delinquent loans. Despite the expected restructuring obligation, Onity does not foresee a material financial impact for 2026, as it plans to replace the earnings with more profitable consumer and commercial relationships. In its third-quarter 2025 results, Onity reported a net income of $18 million and a 39% year-over-year increase in originations volume, highlighting strong performance and growth in its servicing and originations business.

The most recent analyst rating on (ONIT) stock is a Hold with a $38.00 price target. To see the full list of analyst forecasts on Onity Group stock, see the ONIT Stock Forecast page.

Onity Group Appoints Robert Welborn as New Director

On September 30, 2025, Onity Group Inc. announced the appointment of Robert S. Welborn as a director, effective October 1, 2025. The Board temporarily increased its size to eight directors to accommodate Mr. Welborn, who is recognized as an independent director under NYSE and SEC standards. Mr. Welborn, a marketing technology consultant, brings extensive experience from his previous roles at Meta Inc., General Motors, and USAA. He will serve on the Company’s Risk and Compliance Committee. Additionally, DeForest B. Soaries, Jr. will not stand for re-election at the 2026 annual shareholder meeting, and the Board will reduce its size to seven directors at that time. Onity expressed gratitude for Dr. Soaries’ 11 years of service, noting his departure is not due to any disagreements with the company.

The most recent analyst rating on (ONIT) stock is a Hold with a $39.00 price target. To see the full list of analyst forecasts on Onity Group stock, see the ONIT Stock Forecast page.