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Onity Group
(NYSE:ONIT)
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Rating:58Neutral
Price Target:
$35.00
▼(-23.63% Downside)
Action:Reiterated
Date:06/02/26
The score is held back primarily by financial risk—very high leverage and persistently negative operating/free cash flow—despite strong recent profitability. Valuation is a major positive due to the extremely low P/E, but technicals remain bearish (below key moving averages with negative MACD). Earnings-call commentary is mixed, combining strong growth metrics and remediation plans with lowered ROE guidance and servicing volatility; recent corporate actions modestly add support.
Positive Factors
Servicing portfolio scale
A $338B servicing footprint and double-digit UPB growth create durable, fee‑based revenue and scale advantages. Large servicing volumes generate recurring cash flows, client stickiness and cross-sell potential, helping stabilize earnings versus cyclical origination swings.
Negative Factors
Extreme leverage
Very high leverage magnifies upside but greatly increases vulnerability to funding stress, rising rates, or asset losses. With a thin equity buffer, capital flexibility is limited and refinancing or covenant risk could materially constrain operations during adverse credit or housing cycles.
Read all positive and negative factors
Positive Factors
Negative Factors
Servicing portfolio scale
A $338B servicing footprint and double-digit UPB growth create durable, fee‑based revenue and scale advantages. Large servicing volumes generate recurring cash flows, client stickiness and cross-sell potential, helping stabilize earnings versus cyclical origination swings.
Read all positive factors
Onity Group Key Performance Indicators (KPIs)
Any
Income Before Taxes by Segment
Reports pre-tax profit contribution from each segment, making it clear which parts of Onity Group are truly profitable versus those that simply boost revenue. Helps spot margin strengths or weaknesses, the impact of one-time items, and where operational improvements or pricing changes could lift overall profitability.
Reports pre-tax profit contribution from each segment, making it clear which parts of Onity Group are truly profitable versus those that simply boost revenue. Helps spot margin strengths or weaknesses, the impact of one-time items, and where operational improvements or pricing changes could lift overall profitability.
Data provided by:
The Fly
The FlyOnity Group (ONIT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$335.18M
Dividend YieldN/A
Average Volume (3M)38.11K
Price to Earnings (P/E)1.9
Beta (1Y)1.04
Revenue Growth18.45%
EPS Growth580.80%
CountryUS
Employees4,200
SectorFinancial
Sector Strength70
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)20.94
Shares Outstanding8,432,137
10 Day Avg. Volume41,595
30 Day Avg. Volume38,107
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.59
Price to Sales (P/S)0.34
P/FCF Ratio-0.33
Enterprise Value/Market Cap47.85
Enterprise Value/Revenue13.38
Enterprise Value/Gross Profit20.08
Enterprise Value/Ebitda50.19
Forecast
1Y Price Target
$52.33Price Target Upside14.19% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)5.84
Revenue Forecast (FY)$1.18B
Onity Group Business Overview & Revenue Model
Company Description
Onity Group Inc. operates as a financial services firm focused on the creation and administration of both conventional (forward) and reverse mortgage loans. Its business activities extend across the United States, the U.S. Virgin Islands, India, a...
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 Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Neutral
The call presented a mix of strong growth and strategic progress alongside notable short-term operational and market-driven headwinds. Highlights include robust origination volume (nearly 4x YoY), 26% revenue growth, 94% YoY subservicing additions, expansion of servicing UPB (+11% YoY), and measurable AI-driven improvements in lead conversion and scalability. Lowlights included a drop in net income to $7 million, an adjusted pretax loss of $6 million, a tripling of MSR runoff to $99 million, servicing income down $54 million YoY, and pressure from FHA delinquencies and hedge ineffectiveness due to market volatility. Management outlined specific remediation actions (staffing increases, AI investments, hedging and sales improvements) and quantified potential incremental adjusted pretax income of up to $27 million, but also lowered adjusted ROE guidance to 10%–15%. Overall, the company shows durable growth levers and a clear action plan to address the problems, while near-term results and guidance reflect meaningful volatility and execution challenges.Positive Updates
Double-Digit Revenue and Broad Growth
Revenue increased 26% year-over-year, driven by double-digit growth in adjusted revenue, origination volume, subservicing additions, and total servicing UPB.
Negative Updates
Net Income and Adjusted Pretax Results Declined
Net income attributable to common shareholders was $7 million ($0.74 diluted) vs $21 million a year ago; the company reported an adjusted pretax loss of $6 million for the quarter, below prior year and prior quarter adjusted pretax income levels.
Read all updates
Q1-2026 Updates
Positive
Negative
Double-Digit Revenue and Broad Growth
Revenue increased 26% year-over-year, driven by double-digit growth in adjusted revenue, origination volume, subservicing additions, and total servicing UPB.
Read all positive updates
Company Guidance
On the call management revised full‑year 2026 adjusted ROE guidance to 10%–15% (from 13%–15%), reiterated growth in a total servicing book of $338 billion (up 11% YoY) and subservicing additions targets of $28 billion in H1 and >$50 billion for the year, and described a Finance of America Reverse sale of ~57% of owned reverse servicing (~77% of reverse MSR investment) expected to generate $70–$80 million of proceeds (pre‑adjustments) with ~70% of the remaining reverse portfolio expected to run off in four years; they said FHA delinquencies should normalize by end of Q2 and that addressing Q1 issues could deliver up to $27 million of incremental quarterly adjusted pretax income (roughly $5–$7M from pipeline/loan‑sale improvements, $8–$14M from origination capacity, and $4–$6M from FHA normalization), noting Q1 results included net income of $7M ($0.74 diluted EPS), an adjusted pretax loss of $6M (versus $34M originations adjusted pretax income, up 3.5x YoY), overall revenue +26% YoY, originations and Consumer Direct volumes up ~2x–4x YoY, subservicing additions +94% YoY, servicing‑owned UPB +18% YoY, total servicing UPB +11% YoY, runoff impact tripled to $99M from $33M, and Consumer Direct staffing up 34% since Q4.Onity Group Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
28
Negative
Cash Flow
18
Very Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.20B | 1.07B | 1.07B | 1.14B | 999.50M | 1.08B |
| Gross Profit | 798.50M | 1.01B | 495.60M | 584.50M | 459.20M | 521.00M |
| EBITDA | 319.50M | 580.33M | 256.10M | 238.80M | 285.50M | 235.80M |
| Net Income | 175.00M | 189.50M | 33.90M | -63.70M | 25.70M | 18.10M |
Balance Sheet | ||||||
| Total Assets | 17.74B | 16.17B | 16.44B | 12.51B | 12.40B | 12.15B |
| Cash, Cash Equivalents and Short-Term Investments | 182.50M | 180.50M | 184.80M | 201.60M | 208.00M | 192.80M |
| Total Debt | 15.90B | 15.18B | 14.74B | 10.93B | 10.46B | 10.47B |
| Total Liabilities | 17.11B | 15.54B | 15.94B | 12.11B | 11.94B | 11.67B |
| Stockholders Equity | 629.30M | 628.00M | 492.90M | 401.80M | 456.70M | 476.70M |
Cash Flow | ||||||
| Free Cash Flow | -2.65B | -1.12B | -688.70M | -111.80M | -31.70M | -1.30B |
| Operating Cash Flow | -2.19B | -748.00M | -651.00M | 10.40M | 173.20M | -468.40M |
| Investing Cash Flow | 1.82B | 1.85B | 478.50M | -100.30M | -149.10M | -1.01B |
| Financing Cash Flow | 442.40M | -1.10B | 182.90M | 70.80M | -13.40M | 1.38B |
Onity Group Technical Analysis
Positive
45.83
Price Trends
38.72
Positive
39.88
Negative
41.40
Negative
Market Momentum
-0.31
Negative
50.32
Neutral
61.56
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 45.83 is above the 20-day moving average (MA) of 36.96, above the 50-day MA of 38.72, and above the 200-day MA of 41.40, indicating a neutral trend. The MACD of -0.31 indicates Negative momentum. The RSI at 50.32 is Neutral, neither overbought nor oversold. The STOCH value of 61.56 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 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $251.29M | 6.56 | 0.03% | ― | 1.64% | 57.25% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | $724.65M | 6.43 | 16.69% | ― | 38.14% | 34.02% | |
58 Neutral | $335.18M | 1.94 | 30.56% | ― | 18.45% | 580.80% | |
53 Neutral | $75.33M | 18.82 | 3.20% | ― | ― | -9.83% | |
49 Neutral | $134.95M | -13.62 | -0.01% | 18.74% | -21.39% | -231.70% | |
44 Neutral | $19.00M | -0.14 | -1.25% | ― | ― | ― |
* Financial Sector Average
ONIT
Onity Group
39.75
1.31
3.41%
GHI
Greystone Housing Impact Investors
6.04
-4.23
-41.21%
SNFCA
Security National Financial
9.69
-0.05
-0.53%
CNF
CNFinance Holdings
2.77
-4.53
-62.05%
IOR
Income Opportunity Realty Investors
18.53
-0.43
-2.24%
VEL
Velocity Financial
18.46
-0.27
-1.44%
Onity Group Corporate Events
Business Operations and StrategyStock BuybackM&A Transactions
Onity Group Announces Share Buyback After Reverse Mortgage Exit
Positive
Jun 2, 2026
On May 28, 2026, Onity Group Inc. received regulatory approval to sell its reverse mortgage servicing portfolio and certain reverse originations assets to Finance of America Reverse LLC, including servicing rights on about 20,000 Ginnie Mae home e...
Executive/Board ChangesShareholder Meetings
Onity Group Shareholders Back Board, Pay and Auditor
Positive
May 19, 2026
Onity Group held its Annual Meeting of Shareholders on May 19, 2026, where investors elected all nominated directors, including Glen A. Messina and six other board members, to one-year terms. The meeting also reinforced governance stability and bo...
Business Operations and StrategyStock BuybackFinancial DisclosuresM&A TransactionsPrivate Placements and Financing
Onity Group Restructures Reverse Mortgage Servicing Operations
Neutral
May 5, 2026
On April 30, 2026, Onity, via Onity Mortgage Corporation, amended its deal with Finance of America Reverse to sell reverse mortgage servicing rights on about 20,000 Ginnie Mae HECM loans with $5.1 billion unpaid principal, along with its reverse m...
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...
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.