PennyMac Financial (PFSI) AI Stock Analysis

• Market Cap: $6.86B
• Dividend Yield: 0.99%
• Average Volume (3M): 394.03K
• Price to Earnings (P/E): 14.3
• Beta (1Y): 0.51
• Revenue Growth: 21.86%
• EPS Growth: 190.85%
• Country: US
• Employees: 4,457
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Mortgages
• EPS (TTM): 3.37
• Shares Outstanding: 51,710,033
• 10 Day Avg. Volume: 379,080
• 30 Day Avg. Volume: 394,031
• PEG Ratio: 0.15
• Price to Book (P/B): 1.36
• Price to Sales (P/S): 3.27
• P/FCF Ratio: -1.14
• Enterprise Value/Market Cap: 2.67
• Enterprise Value/Revenue: 10.42
• Enterprise Value/Gross Profit: 10.69
• Enterprise Value/Ebitda: 22.67
• 1Y Price Target: $138.67
• Price Target Upside: 4.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 71 Outperform
• Price Target: $143.00 ▲(7.79% Upside)

PennyMac Financial's overall score reflects strong technical indicators and positive earnings call highlights, including strategic growth and AI advancements. However, financial performance is tempered by high debt levels and cash flow challenges, which are significant risks.

Positive Factors

Revenue Growth

The robust revenue growth indicates a strong market position and effective business strategies, supporting long-term financial health and expansion opportunities.

Market Leadership

Achieving a significant market share in correspondent lending showcases PennyMac's competitive edge and strengthens its position in the mortgage finance industry.

AI and Technology Advancements

The focus on AI and technology enhances operational efficiency and borrower experience, providing a sustainable competitive advantage and long-term cost savings.

Negative Factors

High Debt Levels

High debt levels can strain financial flexibility and increase risk, potentially impacting the company's ability to invest in growth and weather economic downturns.

Negative Cash Flows

Negative cash flows indicate potential liquidity issues, which could hinder the company's ability to fund operations and growth initiatives without additional financing.

Increased Loan Origination Expenses

Rising loan origination expenses can pressure profit margins, affecting overall profitability and necessitating cost management to maintain financial health.

PennyMac Financial Business Overview & Revenue Model

Company Description

PennyMac Financial Services, Inc. (PFSI) is a leading mortgage finance company based in the United States, primarily engaged in the origination, sale, and servicing of residential mortgage loans. The company operates through two main segments: Mortgage Banking and Investment Management. Its core products include various mortgage loan offerings such as fixed-rate and adjustable-rate mortgages, as well as a comprehensive range of mortgage servicing solutions. PennyMac is known for its technology-driven approach, focusing on enhancing the borrower experience and streamlining mortgage processes.

How the Company Makes Money

PennyMac Financial generates revenue through multiple channels, primarily within its Mortgage Banking segment, which includes loan origination fees, gain on sale of loans, and servicing fees. The company earns income from the origination of mortgage loans by charging origination fees and earning a profit margin on the sale of these loans to investors in the secondary market. Additionally, PennyMac collects servicing fees for managing loans in its portfolio, which constitutes a significant revenue stream. The Investment Management segment contributes to earnings through management fees and performance-based fees from its investment funds. Relationships with various investors and strategic partnerships also enhance its access to capital markets, facilitating loan sales and improving liquidity.

PennyMac Financial Financial Statement Overview

Summary

PennyMac Financial shows strong revenue growth and operational efficiency with high gross profit and improved EBIT margins. However, high debt levels and negative cash flows present significant risks, necessitating attention to leverage and cash flow issues for long-term stability.

Income Statement

PennyMac Financial's income statement shows strong revenue growth of 106.58% in the TTM period, indicating a robust recovery. The gross profit margin is exceptionally high at 94.32%, reflecting efficient cost management. However, the net profit margin has decreased to 16.43% from 19.54% in the previous year, suggesting increased expenses or other financial pressures. EBIT and EBITDA margins have improved, indicating better operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 4.59, which is a concern for financial stability. Return on equity has improved to 9.97% in the TTM period, showing better profitability from shareholders' equity. The equity ratio is relatively low, indicating a high reliance on debt financing, which could pose risks if market conditions change.

Cash Flow

Cash flow analysis shows negative operating and free cash flows, with a significant decline in free cash flow growth by 38.09%. The operating cash flow to net income ratio is negative, indicating cash flow challenges. However, the free cash flow to net income ratio is slightly above 1, suggesting that despite negative cash flows, the company is generating enough cash to cover its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.76B	1.59B	2.75B	2.73B	4.73B	5.18B
Gross Profit	1.71B	1.56B	2.46B	663.10M	2.14B	3.97B
EBITDA	807.99M	473.17M	424.06M	1.00B	1.68B	2.45B
Net Income	386.60M	311.42M	144.66M	475.51M	1.00B	1.65B
Balance Sheet
Total Assets	24.22B	26.09B	18.84B	16.82B	18.78B	31.60B
Cash, Cash Equivalents and Short-Term Investments	624.45M	659.03M	948.64M	1.34B	346.94M	547.93M
Total Debt	18.52B	20.55B	8.67B	7.10B	13.99B	26.89B
Total Liabilities	20.19B	22.26B	15.31B	13.35B	15.36B	28.21B
Stockholders Equity	4.03B	3.83B	3.54B	3.47B	3.42B	3.39B
Cash Flow
Free Cash Flow	-1.64B	-4.56B	-1.62B	5.95B	2.51B	-6.28B
Operating Cash Flow	-1.61B	-4.53B	-1.58B	6.03B	2.56B	-6.20B
Investing Cash Flow	-494.58M	-1.89B	-273.29M	-721.58M	-304.37M	783.03M
Financing Cash Flow	1.67B	5.72B	1.47B	-4.32B	-2.45B	5.76B

PennyMac Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 132.67
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PFSI, the sentiment is Positive. The current price of 132.67 is above the 20-day moving average (MA) of 121.54, above the 50-day MA of 118.45, and above the 200-day MA of 103.95, indicating a bullish trend. The MACD of 2.37 indicates Negative momentum. The RSI at 69.82 is Neutral, neither overbought nor oversold. The STOCH value of 78.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PFSI.

PennyMac Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PFSI	71 Outperform	$6.86B	14.29	12.55%	0.99%	21.86%	190.85%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
COOP	65 Neutral	―	―	―	―	2.27%	-17.46%
LDI	55 Neutral	$1.18B	-10.59	-23.67%	―	6.60%	44.77%
RKT	48 Neutral	$50.29B	―	>-0.01%	―	21.52%	-103.65%
UWMC	47 Neutral	$9.37B	―	8.18%	6.83%	12.27%	-21.43%
GHLD	46 Neutral	$1.24B	51.08	2.12%	―	34.62%	-7.94%

PennyMac Financial Corporate Events

PennyMac Financial Reports Strong Q3 2025 Results

PennyMac Financial Services, Inc. is a prominent specialty financial services firm focused on the production and servicing of U.S. mortgage loans and the management of related investments. It is recognized as a leader in the U.S. residential mortgage industry.

PennyMac Financial to Present at Barclays Conference

PennyMac Financial Services announced its participation in the Barclays Global Financial Services Conference on September 8, 2025, where it will present an investor update. The company reported growth in its servicing segment, with a total portfolio of $712 billion in unpaid principal balance as of August 31, 2025. PennyMac is also expanding its reach into the prime non-qualified mortgage loans market, aiming to leverage innovative technology and strategic partnerships to enhance its mortgage origination process.

The most recent analyst rating on (PFSI) stock is a Buy with a $121.00 price target. To see the full list of analyst forecasts on PennyMac Financial stock, see the PFSI Stock Forecast page.

PennyMac Financial Completes $650 Million Senior Notes Offering

On August 12, 2025, PennyMac Financial Services, Inc. completed a $650 million offering of 6.750% Senior Notes due 2034. The proceeds will be used to repay existing debts and for general corporate purposes, impacting the company’s financial strategy and positioning in the market.

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 Announces $650M Senior Notes Offering

On August 7, 2025, PennyMac Financial Services, Inc. announced the pricing of a $650 million private offering of 6.750% senior notes due in 2034. The proceeds from this offering will be used to repay borrowings under the company’s secured MSR facilities, other secured indebtedness, and for other general corporate purposes. This move is expected to impact the company’s financial structure by addressing existing debts and supporting broader corporate objectives.

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 Announces $650M Senior Notes Offering

On August 7, 2025, PennyMac Financial Services, Inc. announced its plan to offer $650 million in senior notes due 2034 through a private offering. The proceeds from this offering will be used to repay borrowings under the company’s secured MSR facilities, other secured indebtedness, and for general corporate purposes. This move is aimed at strengthening the company’s financial position and optimizing its capital structure, potentially impacting its operations and market positioning.

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’s Earnings Call: Strong Growth Amid Challenges

PennyMac Financial Services recently held its earnings call, revealing a generally positive sentiment driven by strong financial performance and strategic growth initiatives. The company showcased its achievements in correspondent lending and AI innovation, despite facing challenges such as lower operating ROE and high hedge costs. This indicates a need for continued focus on cost management and margin improvement.

PennyMac Financial Reports Strong Q2 2025 Results

PennyMac Financial Services, Inc. is a leading specialty financial services firm focused on the production and servicing of U.S. mortgage loans and the management of investments related to the U.S. mortgage market. Founded in 2008, the company is recognized as a top lender and servicer in the U.S. residential mortgage industry.