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Onity Group (ONIT)
NYSE:ONIT
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Onity Group
(NYSE:ONIT)
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Rating:64Neutral
Price Target:
$42.00
▼(-4.52% Downside)
Onity Group's overall stock score is driven by its strong earnings call performance, indicating robust net income and book value growth. Technical analysis supports a positive trend, but financial performance is hindered by high leverage and cash flow challenges. Valuation is reasonable, but the lack of a dividend yield is a drawback.
Onity Group (ONIT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$353.62M
Dividend YieldN/A
Average Volume (3M)54.24K
Price to Earnings (P/E)11.2
Beta (1Y)1.30
Revenue Growth-2.84%
EPS Growth2420.57%
CountryUS
Employees4,200
SectorFinancial
Sector Strength70
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)2.40
Shares Outstanding8,055,222
10 Day Avg. Volume50,944
30 Day Avg. Volume54,239
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap43.67
Enterprise Value/Revenue14.06
Enterprise Value/Gross Profit29.94
Enterprise Value/Ebitda64.75
Forecast
1Y Price Target
$55.00Price Target Upside25.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Onity Group Business Overview & Revenue Model
Company DescriptionOnity Group (ONIT) is a leading provider of electronic locking solutions and security technologies primarily serving the hospitality, education, and commercial sectors. The company specializes in advanced locking systems, mobile access solutions, and integrated security management systems, enabling properties to enhance their operational efficiency and guest experience. With a focus on innovation and customer satisfaction, Onity offers a comprehensive range of products including electronic locks, keyless entry systems, and mobile access applications.
How the Company Makes MoneyOnity 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 Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
Overall, Onity Group demonstrated strong financial performance with robust net income, book value growth, and significant advancements in technology and servicing. However, the company faced challenges from market volatility impacting originations and increased MSR runoff.Q2-2025 Updates
Positive Updates
Robust Net Income and Book Value Growth
Onity Group reported a GAAP net income of $20 million or $2.40 per share, reflecting an annualized ROE of 17%. Book value increased to $60 per share, up 5% versus the prior year, demonstrating strong financial performance despite market volatility.
Strong Originations and Servicing Performance
The company achieved a 35% year-over-year growth in originations, surpassing the industry's 23% growth. The average servicing UPB grew steadily, with $36 billion in servicing additions, net of runoff.
Top-Tier Servicing Platform
Onity's servicing platform was recognized for industry-leading performance, including high satisfaction ratings from borrowers and clients. Fitch upgraded all 6 residential servicing ratings, highlighting effective risk management and technology enhancements.
Successful Technology Strategy
Investments in AI and robotic process automation resulted in significant process improvements, saving approximately 57,000 hours of manual efforts per month. 88% of customer inquiries were resolved via digital interfaces supported by AI.
Negative Updates
Negative Impact of Market Volatility on Originations
April's market volatility negatively impacted originations profitability by over $4 million, leading to lower adjusted pretax income compared to the previous year.
Higher MSR Runoff
The company experienced higher MSR runoff, driven by increased prepayment speeds, which negatively affected the servicing segment's pretax income.
Challenges in Reverse Origination
Reverse origination faced profitability challenges due to an uncertain interest rate environment, with higher rates limiting the benefits for borrowers.
Company Guidance
During the Onity Group's second quarter 2025 earnings call, key financial metrics were highlighted, including a robust GAAP net income attributable to common shareholders of $20 million or $2.40 per share fully diluted, reflecting an annualized ROE of 17%. The company reported an adjusted pretax income of $16 million, leading to an annualized adjusted ROE of 14%. Despite market volatility, the company experienced a 5% year-over-year increase in book value, reaching $60 per share. Originations demonstrated a 35% year-over-year growth, outperforming the industry’s 23% growth, while the Mortgage Bankers Association Refinance Application Index increased by 43% from the previous year. The servicing portfolio saw a 2% year-over-year increase, ending the quarter up approximately $5 billion. However, origination margins were impacted by an unfavorable $4 million due to market volatility. The company maintained its annual adjusted ROE guidance of 16% to 18% for the full year 2025, emphasizing its robust strategy and resilience in navigating market challenges.Onity Group Financial Statement Overview
Summary
Onity Group's financial performance is challenged by high leverage, inconsistent profitability, and strained cash flow management. The balance sheet indicates financial risk due to high debt levels, and cash flow analysis shows negative free cash flow growth.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.45
Neutral
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.40
Negative
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.35
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.10B | 1.07B | 1.14B | 999.50M | 1.08B | 976.80M |
| Gross Profit | 515.80M | 495.60M | 584.50M | 459.20M | 521.00M | 524.80M |
| EBITDA | 238.50M | 256.10M | 238.80M | 285.50M | 235.80M | 175.50M |
| Net Income | 36.90M | 33.90M | -63.70M | 25.70M | 18.10M | -40.20M |
Balance Sheet | ||||||
| Total Assets | 16.53B | 16.44B | 12.51B | 12.40B | 12.15B | 10.65B |
| Cash, Cash Equivalents and Short-Term Investments | 194.30M | 184.80M | 213.10M | 274.20M | 263.45M | 357.26M |
| Total Debt | 15.32B | 14.74B | 10.93B | 10.46B | 10.47B | 9.29B |
| Total Liabilities | 16.00B | 15.94B | 12.11B | 11.94B | 11.67B | 10.24B |
| Stockholders Equity | 531.80M | 492.90M | 401.80M | 456.70M | 476.70M | 415.37M |
Cash Flow | ||||||
| Free Cash Flow | -1.27B | -807.00M | -111.80M | -31.70M | -1.30B | -16.30M |
| Operating Cash Flow | -945.70M | -573.80M | 10.40M | 173.20M | -468.40M | 261.00M |
| Investing Cash Flow | 1.16B | 401.30M | -100.30M | -120.80M | -1.01B | -527.90M |
| Financing Cash Flow | -206.50M | 182.90M | 70.80M | -13.40M | 1.38B | 131.80M |
Onity Group Technical Analysis
Positive
43.99
Price Trends
40.10
Positive
38.81
Positive
35.53
Positive
Market Momentum
1.18
Positive
59.16
Neutral
48.15
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 43.99 is above the 20-day moving average (MA) of 42.57, above the 50-day MA of 40.10, and above the 200-day MA of 35.53, indicating a bullish trend. The MACD of 1.18 indicates Positive momentum. The RSI at 59.16 is Neutral, neither overbought nor oversold. The STOCH value of 48.15 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 (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | 229.02M | 10.35 | 6.38% | ― | 5.49% | 4.30% | |
68 Neutral | 703.04M | 8.44 | 0.00% | ― | 35.12% | 25.28% | |
66 Neutral | 2.91B | 26.31 | 6.26% | 3.04% | 11.18% | 24.94% | |
64 Neutral | $353.62M | 11.18 | 7.55% | ― | -2.84% | 2420.57% | |
61 Neutral | 1.51B | -12.15 | -15.29% | ― | 6.60% | 44.77% | |
58 Neutral | 1.24B | 51.21 | 2.12% | ― | 34.62% | -7.94% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
ONIT
Onity Group
43.99
15.82
56.16%
SNFCA
Security National Financial
9.09
0.76
9.12%
WD
Walker & Dunlop
87.54
-20.12
-18.69%
LDI
loanDepot
4.11
1.28
45.23%
VEL
Velocity Financial
18.44
-1.12
-5.73%
GHLD
Guild Holdings
19.94
4.04
25.41%
Onity Group Corporate Events
Shareholder Meetings
Onity Group Holds Annual Shareholder Meeting
Neutral
May 21, 2025
On May 21, 2025, Onity Group held its Annual Meeting of Shareholders where three key proposals were voted on. Shareholders elected directors for one-year terms, ratified Deloitte & Touche LLP as the independent registered public accounting firm for 2025, and approved the executive compensation on a non-binding advisory basis.
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.