PennyMac Financial (PFSI)
NYSE:PFSI
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PennyMac Financial
(NYSE:PFSI)
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Rating:56Neutral
Price Target:
$93.00
▼(-1.66% Downside)
Action:Reiterated
Date:05/09/26
The score is held back primarily by fundamentals: high leverage and weak recent cash-flow conversion despite solid profitability. Technicals add a mild headwind due to a still-negative longer-term trend and bearish MACD. Offsetting these, valuation is reasonable (mid-teens P/E) and the latest earnings call indicates steady operations with planned efficiency gains, though tempered by lowered near-term ROE guidance and softer demand expectations.
Positive Factors
Servicing scale and fee income
A large servicing portfolio (UPB ~$720B) producing positive pretax servicing income ex-valuation (3.1 bps) gives durable fee revenue and operating leverage. Scale enables spread of fixed costs and supports long-term margin improvement as cost-per-loan targets are achieved.
Negative Factors
Elevated leverage
Very high debt-to-equity amplifies sensitivity to funding stress and market shocks in the mortgage cycle. Elevated leverage limits strategic flexibility, increases refinancing and funding risk, and can magnify earnings volatility during rate or credit dislocations, burdening long-term stability.
Read all positive and negative factors
Positive Factors
Negative Factors
Servicing scale and fee income
A large servicing portfolio (UPB ~$720B) producing positive pretax servicing income ex-valuation (3.1 bps) gives durable fee revenue and operating leverage. Scale enables spread of fixed costs and supports long-term margin improvement as cost-per-loan targets are achieved.
Read all positive factors
PennyMac Financial (PFSI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.60B
Dividend Yield0.9%
Average Volume (3M)667.77K
Price to Earnings (P/E)13.8
Beta (1Y)0.57
Revenue Growth24.55%
EPS Growth43.82%
CountryUS
Employees4,457
SectorFinancial
Sector Strength70
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)9.78
Shares Outstanding51,924,873
10 Day Avg. Volume535,032
30 Day Avg. Volume667,775
Financial Highlights & Ratios
PEG Ratio0.23
Price to Book (P/B)1.58
Price to Sales (P/S)1.56
P/FCF Ratio-4.83
Enterprise Value/Market Cap4.71
Enterprise Value/Revenue6.12
Enterprise Value/Gross Profit8.68
Enterprise Value/Ebitda20.87
Forecast
1Y Price Target
$112.83Price Target Upside19.31% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)11.88
Revenue Forecast (FY)$2.48B
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 Produ...
How the Company Makes Money
PennyMac primarily earns money through (1) mortgage production revenues and (2) mortgage servicing-related revenues, with results influenced by interest rates, loan volumes, home prices, credit performance, and the value of mortgage-related assets...
PennyMac Financial Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 28, 2026
Earnings Call Sentiment Positive
The call presents a generally constructive operational story: strong adjusted earnings, production pretax income at multi-year highs, improving consumer direct recapture, clear technology-driven efficiency gains and disciplined capital returns (buybacks/dividend). Offsetting items include notable hedge and valuation-related losses, sequential declines in origination and lock volumes, elevated leverage and a lowered near-term ROE guide due to accelerated tech investment and softer market activity. Management emphasizes long-term targets (high-teens to low-20s ROE), expects technology benefits to materialize in H2 2026, and is actively managing leverage and MSR positioning.Positive Updates
Solid Adjusted Earnings and ROE
Net income $82M GAAP ($1.53/share) with adjusted net income $118M ($2.19/share); annualized GAAP ROE 8% and adjusted ROE 11%.
Negative Updates
Origination and Lock Volume Declines
Total acquisition and origination volumes $37B UPB, down 12% QoQ; total lock volumes $44B UPB, down 4% QoQ; correspondent acquisitions $24B, down 20% QoQ.
Read all updates
Q1-2026 Updates
Positive
Negative
Solid Adjusted Earnings and ROE
Net income $82M GAAP ($1.53/share) with adjusted net income $118M ($2.19/share); annualized GAAP ROE 8% and adjusted ROE 11%.
Read all positive updates
Company Guidance
PennyMac guided adjusted ROEs to remain near current levels in Q2 and to rise to the low‑to‑mid‑teens in H2 2026 (revising down from prior mid‑to‑high‑teens guidance) due to accelerated technology investment and lower expected origination demand, while reiterating a medium‑to‑long‑term target of high‑teens to low‑20% ROEs; management expects tech benefits to materialize in H2 2026 (tech spend near peak now, then declining over the following 12–18 months) and a 24–36 month goal to drive servicing costs to $55 per loan, with the Cenlar subservicing acquisition expected to close in H2 and add strong returns once integrated. Capital and liquidity expectations are to keep total debt/equity near ~4.0x and non‑funding debt/equity near ~1.7x, with $4.2 billion of total liquidity; Q1 actions included a $0.30/share dividend and repurchase of 560,000 shares for $50 million (avg $89.28). Management anchored the outlook to recent results and operating metrics: Q1 net income $82m (GAAP EPS $1.53, annualized ROE 8%), adjusted net income $118m (adjusted EPS $2.19, annualized adjusted ROE 11%), mortgage banking operating pretax income $190m, production pretax income $134m, servicing UPB $720bn (including $320bn with note rates >5%, >50% of that >6%), servicing pretax excl. valuation $57m (3.1 bps of avg UPB), servicing operating expenses 4.5 bps, consumer direct direct expenses down 26% vs 2022, and a near‑100% hedge ratio (hedge costs $14m; hedge FV losses $221m; MSR FV increase $177m).PennyMac Financial Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
52
Neutral
Cash Flow
38
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.54B | 4.36B | 1.59B | 2.04B | 2.32B | 3.56B |
| Gross Profit | 2.50B | 3.99B | 1.56B | 847.47M | 1.31B | 2.13B |
| EBITDA | 1.04B | 1.51B | 473.17M | 424.06M | 738.93M | 1.40B |
| Net Income | 507.12M | 501.08M | 311.42M | 144.66M | 475.51M | 1.00B |
Balance Sheet | ||||||
| Total Assets | 31.94B | 29.39B | 26.09B | 18.84B | 16.82B | 18.78B |
| Cash, Cash Equivalents and Short-Term Investments | 219.51M | 711.72M | 659.03M | 948.64M | 1.34B | 346.94M |
| Total Debt | 6.26B | 23.06B | 20.55B | 13.49B | 11.80B | 13.99B |
| Total Liabilities | 27.62B | 25.08B | 22.26B | 15.31B | 13.35B | 15.36B |
| Stockholders Equity | 4.33B | 4.31B | 3.83B | 3.54B | 3.47B | 3.42B |
Cash Flow | ||||||
| Free Cash Flow | -3.73B | -1.41B | -4.56B | -1.62B | 5.95B | 2.51B |
| Operating Cash Flow | -3.70B | -1.40B | -4.53B | -1.58B | 6.03B | 2.56B |
| Investing Cash Flow | 20.93M | 300.42M | -1.89B | -273.29M | -721.58M | -304.37M |
| Financing Cash Flow | 3.69B | 1.16B | 5.72B | 1.47B | -4.32B | -2.45B |
PennyMac Financial Technical Analysis
Neutral
94.57
Price Trends
89.95
Positive
111.96
Negative
112.69
Negative
Market Momentum
0.43
Negative
60.02
Neutral
74.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PFSI, the sentiment is Neutral. The current price of 94.57 is above the 20-day moving average (MA) of 89.00, above the 50-day MA of 89.95, and below the 200-day MA of 112.69, indicating a neutral trend. The MACD of 0.43 indicates Negative momentum. The RSI at 60.02 is Neutral, neither overbought nor oversold. The STOCH value of 74.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PFSI.
PennyMac Financial Risk Analysis
PennyMac Financial disclosed 65 risk factors in its most recent earnings report. PennyMac Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PennyMac Financial Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
56 Neutral | $4.60B | 13.84 | 12.02% | 0.90% | 24.55% | 43.82% | |
52 Neutral | $41.73B | 33.93 | 1.53% | ― | 73.75% | 269.75% | |
51 Neutral | $5.24B | 10.45 | 12.32% | 8.64% | 37.10% | ― | |
43 Neutral | $421.28M | -2.17 | -24.39% | ― | 14.29% | 21.88% |
* Financial Sector Average
PFSI
PennyMac Financial
88.63
-9.31
-9.50%
LDI
loanDepot
1.25
0.04
3.31%
UWMC
UWM Holding
3.25
-0.52
-13.77%
RKT
Rocket Companies
14.80
2.20
17.46%
PennyMac Financial Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
PennyMac Financial Updates Bylaws to Refine Governance
Positive
Mar 18, 2026
On March 16, 2026, PennyMac Financial Services, Inc.’s board of directors approved an amendment and restatement of the company’s bylaws, effective the same day, to update references to the company’s legal name and remove referenc...
Business Operations and StrategyM&A Transactions
PennyMac Financial to Acquire Cenlar Mortgage Subservicing Business
Positive
Feb 11, 2026
PennyMac Financial Services announced on February 11, 2026 that it has signed a definitive agreement to acquire the subservicing business of Cenlar Capital Corporation in an all-cash deal valued at $172.5 million upfront and up to $85 million in c...
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.