PennyMac Financial (PFSI) AI Stock Analysis

• Market Cap: $4.89B
• Dividend Yield: 1.27%
• Average Volume (3M): 282.89K
• Price to Earnings (P/E): 14.5
• Beta (1Y): 0.60
• Revenue Growth: 23.79%
• EPS Growth: 121.61%
• Country: US
• Employees: 4,457
• Sector: Financial
• Sector Strength: 74
• Industry: Financial - Mortgages
• EPS (TTM): 1.42
• Shares Outstanding: 51,663,586
• 10 Day Avg. Volume: 312,933
• 30 Day Avg. Volume: 282,894
• PEG Ratio: -0.15
• Price to Book (P/B): 0.87
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.51
• Enterprise Value/Market Cap: 2.76
• Enterprise Value/Revenue: 1.20
• Enterprise Value/Gross Profit: 5.40
• Enterprise Value/Ebitda: 3.90
• 1Y Price Target: $123.40
• Price Target Upside: 30.36% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 61 Neutral
• Price Target: $101.00 ▲(6.70%Upside)

PennyMac Financial's overall stock score reflects a balanced view. The company shows strong servicing portfolio growth and strategic partnerships, but challenges in profitability and cash flow contribute to a moderate score. Fair valuation and recent corporate actions provide support, though technical indicators and financial performance highlight areas of concern.

Positive Factors

Brand Elevation

PFSI's partnership with Team USA for the 2028 Olympics is expected to elevate PennyMac's brand, aiding portfolio recapture and customer acquisition.

Financial Performance

The stock remains attractive below 8x earnings, and the company can maintain at least a low-teens ROE even if mortgage rates rise.

Growth Opportunities

The broker channel remains a large and compelling growth opportunity with robust originations up 51% year over year.

Negative Factors

Earnings Performance

EPS missed consensus estimates as revenue and expenses came in worse than expected.

Economic Uncertainty

Volatile and high mortgage rates create a challenging climate for the mortgage industry, adding uncertainty during the important spring homebuying season.

Interest Rate Volatility

Interest rate volatility is high, making the market sensitive to changes in rates and economic directives.

PennyMac Financial Business Overview & Revenue Model

Company Description

PennyMac Financial Services, Inc., through its subsidiaries, engages in the mortgage banking and investment management activities in the United States. It operates through three segments: Production, Servicing, and Investment Management. The Production segment is involved in the origination, acquisition, and sale of loans. It sources first-lien residential conventional and government-insured or guaranteed mortgage loans. The Servicing segment engages in the servicing of newly originated loans, and execution and management of early buyout transactions and servicing of loans. It performs loan administration, collection, and default management activities, including the collection and remittance of loan payments, response to customer inquiries, accounting for principal and interest, holding custodial funds for the payment of property taxes and insurance premiums, counseling delinquent borrowers, and supervising foreclosures and property dispositions, as well as administers loss mitigation activities, such as modification and forbearance programs. The Investment Management segment is involved in sourcing, performing diligence, bidding, and closing investment asset acquisitions; managing correspondent production activities for PennyMac Mortgage Investment Trust; and managing acquired assets. PennyMac Financial Services, Inc. was founded in 2008 and is headquartered in Westlake Village, California.

How the Company Makes Money

PennyMac Financial makes money through three primary revenue streams: loan production, loan servicing, and investment management. In loan production, the company generates revenue by originating and selling mortgage loans, earning fees and gain-on-sale margins. The loan servicing segment provides income through servicing fees collected on mortgage loans, along with ancillary services such as late fees and other borrower charges. Investment management contributes to revenue by managing mortgage-related investment funds and earning management fees. PennyMac Financial's earnings are also influenced by its strategic partnerships with institutional investors and financial institutions, which enhance its capacity to manage large volumes of mortgage transactions and investments.

PennyMac Financial Financial Statement Overview

Summary

PennyMac Financial shows mixed financial performance. While revenue and gross profit margins are strong, net profit margins and cash flow performance raise concerns about profitability and liquidity. The high leverage ratio suggests potential vulnerability to economic pressures. Attention to cash flow management and reducing debt levels could enhance financial stability.

Income Statement

The company's recent revenue growth is positive, with a TTM revenue increase from the previous year. Gross profit margins are strong and have been improving, indicating efficient cost management. However, net profit margins have decreased over the years, suggesting increased expenses or lower profitability in net terms. The EBIT margin is robust, but EBITDA margin shows some volatility, possibly due to fluctuating depreciation or amortization costs.

Balance Sheet

The debt-to-equity ratio is high, indicating significant leverage which could pose a risk in adverse economic conditions. However, the company maintains a stable equity ratio, suggesting a reasonable level of equity financing in its asset base. Return on equity is moderate, reflecting a balanced use of shareholder equity for generating net income. Overall, the balance sheet shows potential risks associated with high debt levels.

Cash Flow

The company is experiencing negative operating cash flow in recent periods, which is a concern for liquidity. Free cash flow has also been negative, driven by large capital expenditures and operating cash outflows. The operating cash flow to net income ratio is unfavorable, indicating cash flow generation issues relative to net income. These factors raise concerns about the company's short-term financial flexibility and ability to fund operations internally.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.62B	1.59B	2.04B	1.97B	3.98B	5.45B
	Gross Profit
2.49B	1.56B	1.94B	663.10M	2.14B	3.97B
	EBIT
1.06B	901.03M	1.03B	615.01M	1.32B	2.20B
	EBITDA
838.48M	473.17M	424.06M	665.25M	1.36B	2.24B
	Net Income Common Stockholders
348.39M	311.42M	144.66M	475.51M	1.00B	1.65B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
654.49M	659.03M	948.64M	1.34B	346.94M	547.93M
	Total Assets
23.87B	26.09B	18.84B	16.82B	18.78B	31.60B
	Total Debt
18.27B	20.55B	13.49B	11.80B	13.99B	26.89B
	Net Debt
18.06B	20.32B	12.55B	10.47B	13.65B	26.36B
	Total Liabilities
19.97B	22.26B	15.31B	13.35B	15.36B	28.21B
	Stockholders Equity
3.90B	3.83B	3.54B	3.47B	3.42B	3.39B
Cash Flow		Free Cash Flow
-2.65B	-4.56B	-1.62B	5.95B	2.51B	-6.28B
	Operating Cash Flow
-2.59B	-4.53B	-1.58B	6.03B	2.56B	-6.20B
	Investing Cash Flow
-22.14B	-1.89B	-273.29M	-721.58M	-304.37M	783.03M
	Financing Cash Flow
4.05B	5.72B	1.47B	-4.32B	-2.45B	5.76B

PennyMac Financial Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 94.66
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PFSI, the sentiment is Negative. The current price of 94.66 is below the 20-day moving average (MA) of 95.69, below the 50-day MA of 96.15, and below the 200-day MA of 101.98, indicating a bearish trend. The MACD of -0.57 indicates Positive momentum. The RSI at 45.38 is Neutral, neither overbought nor oversold. The STOCH value of 20.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PFSI.

PennyMac Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACT	84 Outperform	$5.38B	8.07	14.09%	2.34%	4.33%	10.21%
MTG	79 Outperform	$6.40B	8.96	15.12%	1.93%	4.64%	15.36%
ESNT	79 Outperform	$5.99B	8.65	13.29%	2.10%	9.87%	3.41%
RDN	78 Outperform	$4.66B	8.83	13.22%	2.94%	2.95%	4.08%
Sector *	64 Neutral	$12.77B	9.78	7.84%	78.83%	12.06%	-7.99%
PFSI	61 Neutral	$4.89B	14.53	9.32%	1.27%	23.79%	121.61%
DJT		$5.13B	―	-19.06%	―	―	―

PennyMac Financial Corporate Events

PennyMac Financial Holds Annual Stockholders Meeting

On June 18, 2025, PennyMac Financial held its Annual Meeting of Stockholders to elect eleven directors for a one-year term, ratify Deloitte & Touche LLP as the independent public accounting firm for 2025, and approve executive compensation. The meeting saw a high participation rate with 96.1% of eligible votes cast, resulting in the election of all director nominees and the approval of the accounting firm and executive compensation.

The most recent analyst rating on (PFSI) stock is a Buy with a $130.00 price target. To see the full list of analyst forecasts on PennyMac Financial stock, see the PFSI Stock Forecast page.

PennyMac Financial Closes $850M Senior Notes Offering

On May 8, 2025, PennyMac Financial Services closed an offering of $850 million in 6.875% Senior Notes due 2032. The proceeds will be used to redeem existing notes and repay borrowings, impacting the company’s financial structure and potentially enhancing its market position.