Onity Group (ONIT) AI Stock Analysis

• Market Cap: $373.50M
• Dividend Yield: N/A
• Average Volume (3M): 38.11K
• Price to Earnings (P/E): 2.0
• Beta (1Y): 1.18
• Revenue Growth: -6.28%
• EPS Growth: 112.66%
• Country: US
• Employees: 4,200
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Mortgages
• EPS (TTM): 14.24
• Shares Outstanding: 8,521,636
• 10 Day Avg. Volume: 41,595
• 30 Day Avg. Volume: 38,107
• 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 Cap: 39.82
• Enterprise Value/Revenue: 12.60
• Enterprise Value/Gross Profit: 20.89
• Enterprise Value/Ebitda: 53.73
• 1Y Price Target: $60.00
• Price Target Upside: 42.35% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: $46.00 ▲(9.13% Upside)
• Action: Reiterated Date: 02/19/26
• Date: Action: Reiterated 02/19/26

The score is held back primarily by weak and deteriorating cash flow and elevated leverage risk despite improved reported profitability. Offsetting factors include very inexpensive valuation (low P/E) and generally constructive earnings-call guidance and execution commentary, while technical signals remain mildly bearish in the near term.

Positive Factors

Profitability Recovery

Onity’s reported profitability has meaningfully improved, with TTM net margins near 17% and sizable year‑over‑year improvement. Durable higher margins provide stronger internal earnings generation, support targeted adjusted ROE, and create a wider buffer to fund reinvestment and servicing operations over the next several quarters.

Scale in Servicing and Subservicing

The company’s large servicing footprint and rapid subservicing gains (tens of billions of UPB added) create durable fee revenue and client lock‑in effects. Scale improves bargaining power, spreads fixed servicing costs, and supports predictable recurring revenue that should underpin margins and ROE over the next 2–6 months.

Hedge Effectiveness and Technology Investment

Effective MSR hedging reduces structural earnings volatility from rate moves, while investments in AI/RPA/LLMs and automation materially improved refinance recapture and borrower experience. Together these durable capabilities lower servicing operating costs and enhance long‑term cash profitability and competitive positioning.

Negative Factors

Weak Cash Generation

Despite reported profitability, the company’s deeply negative operating and free cash flow undermines earnings quality and limits internal funding for debt reduction or investments. Persistent negative cash conversion increases reliance on external financing and raises refinancing and liquidity risk over the medium term.

High Leverage

Onity’s highly leveraged balance sheet sharply reduces financial flexibility and magnifies sensitivity to credit spreads or funding shocks. Elevated leverage increases interest burden and constrains the company’s ability to absorb operational setbacks or invest opportunistically during the next several quarters.

Delinquencies and Liquidity Concentration

Incremental MSR runoff tied to FHA rule changes and elevated delinquencies reduce expected servicing cashflows and create near‑term uncertainty in portfolio performance. Coupled with much of liquidity pledged to MSRs (only limited unrestricted cash), this structural concentration can constrain immediate flexibility and transaction timing.

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 Group generates revenue primarily through the sale of its electronic locking systems and services, including installation and maintenance. Key revenue streams include direct sales of locking hardware, software solutions for access management, and ongoing service agreements for system support. The company also benefits from partnerships with major hospitality chains and property management companies, which facilitate bulk procurement of its products. Additionally, Onity capitalizes on trends in mobile access technology by offering innovative solutions that integrate with customer operations, further driving revenue through value-added services.

Onity Group Financial Statement Overview

Summary

Reported profitability has improved materially (income statement score 62), but this is outweighed by very weak cash generation (cash flow score 12; deeply negative operating/FCF) and high leverage risk flagged in the balance sheet assessment (score 18). Overall earnings durability and quality are key concerns despite stronger margins.

Income Statement

TTM (Trailing-Twelve-Months) profitability is strong on paper with a healthy net margin (~16.9%) and solid operating profitability, a major improvement versus 2024 (low single-digit net margin) and 2023 (net loss). However, revenue is slightly declining (TTM down ~5.3%), and results have been volatile over the last several years, which reduces confidence in the durability of earnings.

Balance Sheet

The balance sheet is highly leveraged. Total debt is very large relative to equity (TTM debt-to-equity ~21.7x; 2024 even higher), which limits financial flexibility and increases sensitivity to credit conditions. Equity has improved versus 2023–2024, and TTM return on equity is strong, but the leverage level remains the dominant risk factor.

Cash Flow

Cash generation is weak and deteriorating: operating cash flow and free cash flow are deeply negative in TTM (about -$748M) and were also significantly negative in 2024, following only modestly positive/near-breakeven periods earlier. Free cash flow trends are negative (TTM down ~31.6%), and the overall pattern suggests earnings quality risk given the large gap between reported profitability and cash flow.

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

• Technical Analysis Sentiment: Negative
• Last Price: 42.15
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ONIT, the sentiment is Negative. The current price of 42.15 is below the 20-day moving average (MA) of 44.92, below the 50-day MA of 45.98, and above the 200-day MA of 41.09, indicating a neutral trend. The MACD of -1.10 indicates Positive momentum. The RSI at 39.70 is Neutral, neither overbought nor oversold. The STOCH value of 38.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ONIT.

Onity Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VEL	72 Outperform	$765.55M	8.02	16.04%	―	36.73%	27.50%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SNFCA	64 Neutral	$232.93M	12.36	5.23%	―	3.25%	-37.79%
IOR	63 Neutral	$79.17M	18.82	3.36%	―	―	-30.69%
GHI	62 Neutral	$187.48M	42.02	1.99%	18.74%	-12.56%	-69.72%
ONIT	60 Neutral	$373.50M	2.00	6.71%	―	-6.28%	112.66%
CNF	49 Neutral	$38.06M	―	―	―	―	―

Onity Group Corporate Events

Onity Group Announces Record 2025 Results, Buyback Plan

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 revenue rose 9% to $1.1 billion, servicing additions reached $85 billion, originations volume climbed 43% to $43 billion, and total servicing UPB grew to $328 billion, while the company also released a $120 million deferred tax valuation allowance and simplified its business through planned asset sales and warrant settlement.

In the fourth quarter of 2025, net income jumped to $126 million with diluted EPS of $14.24 and ROE of 89%, supported by $29 billion in servicing additions, although adjusted pre-tax income of $9 million reflected higher MSR runoff tied to policy changes and a government shutdown. On February 10, 2026, the board authorized a share repurchase program of up to $10 million running through August 2026, underscoring management’s confidence as Onity targets double‑digit adjusted ROE in 2026 and positions itself for continued profitable growth and deleveraging.

The most recent analyst rating on (ONIT) stock is a Hold with a $49.00 price target. To see the full list of analyst forecasts on Onity Group stock, see the ONIT Stock Forecast page.

Onity Group Expands PHH Senior Notes Debt Financing

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 $500 million of 9.875% Senior Notes due 2029 originally issued on November 6, 2024, forming a single series of debt securities, which further expands PHH’s overall debt financing structure and may enhance the company’s financial flexibility and capital resources for its ongoing corporate purposes.

The most recent analyst rating on (ONIT) stock is a Hold with a $49.00 price target. To see the full list of analyst forecasts on Onity Group stock, see the ONIT Stock Forecast page.

Onity Group Adds $200M Senior Notes to 2029 Issue

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 of notes originally issued on November 6, 2024. The notes, guaranteed on a senior secured basis by Onity and key PHH subsidiaries, were sold to qualified institutional buyers and certain non-U.S. investors, with net proceeds earmarked for general corporate purposes, including repayment of mortgage servicing rights indebtedness, a move management said further strengthens the company’s capital structure, lowers its effective borrowing cost versus the 2024 issuance, and enhances financial flexibility to manage leverage and support business growth in its mortgage servicing and reverse mortgage operations.

The most recent analyst rating on (ONIT) stock is a Hold with a $52.00 price target. To see the full list of analyst forecasts on Onity Group stock, see the ONIT Stock Forecast page.

Onity Group Prices Additional Senior Notes to 2029

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 8.515%, with closing expected on January 30, 2026 subject to customary conditions. The new notes will be fungible with the existing $500 million 9.875% senior notes issued in November 2024, are guaranteed on a senior secured basis by Onity and key PHH subsidiaries, and will provide net proceeds for general corporate purposes including repayment of mortgage servicing rights indebtedness, effectively expanding the group’s secured funding base while targeting balance sheet and leverage management within its mortgage servicing and origination operations.

The most recent analyst rating on (ONIT) stock is a Hold with a $55.00 price target. To see the full list of analyst forecasts on Onity Group stock, see the ONIT Stock Forecast page.

Onity Group Announces Additional Senior Notes Offering

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 identical notes issued on November 6, 2024. The new senior secured notes, guaranteed by Onity and key PHH subsidiaries including PHH Mortgage Corporation and PHH Asset Services LLC, are being privately placed with qualified institutional buyers and certain non-U.S. investors, with net proceeds earmarked for general corporate purposes, including repayment of indebtedness at PHH Mortgage Corporation and PHH Asset Services LLC, a move that is expected to further manage and optimize the group’s capital structure and debt profile.

The most recent analyst rating on (ONIT) stock is a Buy with a $58.00 price target. To see the full list of analyst forecasts on Onity Group stock, see the ONIT Stock Forecast page.

Onity Group Appoints New Independent Director to Board

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, temporarily expanding the board to nine members and designating her as an independent director under NYSE and SEC rules. The company also disclosed that long-standing director Dr. Jenne Britell will not stand for re-election and will retire from the board at the 2026 annual shareholder meeting scheduled for May 19, 2026, alongside previously announced retiree Dr. DeForest B. Soaries, Jr., after which the board will be reduced to seven members, signaling an ongoing refresh of its governance structure without any reported disagreements over company operations or policies.

The most recent analyst rating on (ONIT) stock is a Hold with a $48.00 price target. To see the full list of analyst forecasts on Onity Group stock, see the ONIT Stock Forecast page.

Onity Group Settles Oaktree Warrants via Net Share Issuance

On December 5, 2025, Oaktree Capital Management exercised warrants held by two of its funds to purchase 1,184,768 shares of Onity Group Inc. common stock that were originally exercisable through March 4, 2027 at $26.82 per share. To preserve liquidity for growth and capital structure initiatives, Onity chose to settle the exercise via a net issuance of 462,762 shares based on a trailing average share price of $44.01, leaving the company with no warrants outstanding and removing uncertainty about future dilution; the transaction also followed Oaktree’s loss of Board observer rights in September 2025 and resulted in an implied book value per share dilution of $3.38, or 5.4%, based on a post-issuance share count of 8,521,636 as of September 30, 2025.

The most recent analyst rating on (ONIT) stock is a Buy with a $60.00 price target. To see the full list of analyst forecasts on Onity Group stock, see the ONIT Stock Forecast page.

Onity Group CFO to Present at Finance Conference

On December 2, 2025, Sean O’Neil, Executive Vice President and Chief Financial Officer of Onity Group Inc., will present at the Bank of America Leveraged Finance Conference. This event signifies Onity Group’s engagement with investors and its strategic positioning in the financial market.

The most recent analyst rating on (ONIT) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Onity Group stock, see the ONIT Stock Forecast page.