Synchrony Financial (SYF) AI Stock Analysis

• Market Cap: $17.03B
• Dividend Yield: 2.28%
• Average Volume (3M): 5.19M
• Price to Earnings (P/E): 5.1
• Beta (1Y): 1.36
• Revenue Growth: 19.73%
• EPS Growth: 65.57%
• Country: US
• Employees: 20,000
• Sector: Financial
• Sector Strength: 81
• Industry: Financial - Credit Services
• EPS (TTM): 8.53
• Shares Outstanding: 388,749,480
• 10 Day Avg. Volume: 4,943,345
• 30 Day Avg. Volume: 5,186,114
• PEG Ratio: 0.08
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.08
• Price to Cash Flow (P/CF): 2.20
• P/FCF Ratio: 1.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $72.07
• Price Target Upside: 60.83% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

Synchrony Financial demonstrates robust financial health with strong revenue growth and profitability. Despite a challenging credit environment with increased charge-offs, the company's strategic partnerships and digital expansion are positive. However, technical indicators suggest caution with recent downward momentum. Valuation metrics indicate potential undervaluation, providing an opportunity for long-term investors.

Positive Factors

Credit Metrics

January credit metrics were encouraging, indicating an improvement in loss rates and potential for better financial performance.

Financial Performance

The mitigant-driven APR increases are boosting consensus net interest margin forecasts, indicating potential financial growth.

Valuation

The valuation of Synchrony Financial is considered attractive, even if mitigants are pulled back faster.

Negative Factors

Consumer Sentiment

Synchrony was more negative on the consumer, implying that spending and lending volumes will be particularly weak.

Loan Growth

Loan growth printed its lowest year-over-year growth rate in several quarters.

Macroeconomic Risks

A key risk for Synchrony Financial is macroeconomic uncertainty or an increase in unemployment.

Synchrony Financial Business Overview & Revenue Model

Company Description

Synchrony Financial (SYF) is a premier consumer financial services company headquartered in the United States. It specializes in offering a wide range of credit products, including private label credit cards, dual cards, and consumer installment loans. The company partners with retailers, healthcare providers, manufacturers, and other entities to provide customized financial solutions that enhance consumer purchasing power and foster brand loyalty.

How the Company Makes Money

Synchrony Financial primarily generates revenue through interest income earned from its credit products. The company's key revenue streams include interest on outstanding credit card balances, fees charged on credit card transactions, and merchant fees from retail partners. Synchrony's strategic partnerships with major retailers and service providers allow it to leverage their customer bases to drive credit card usage and increase transaction volumes. Additionally, the company benefits from cross-selling opportunities with its partners, enhancing its revenue through value-added services such as promotional financing and loyalty programs.

Synchrony Financial Financial Statement Overview

Summary

Synchrony Financial shows strong financial health with consistent revenue growth, robust profitability, and a solid balance sheet. The absence of debt and strong cash flows mitigate risks, positioning the company well in the credit finance industry.

Income Statement

Synchrony Financial's income statement shows strong financial performance with consistent revenue growth from $7.66 billion to $22.64 billion in the most recent year. The gross profit margin remains stable as the company reports high EBIT margins, though the absence of EBITDA figures suggests potential volatility in operating costs. Net profit margin and revenue growth are commendable, demonstrating robust profitability and expansion.

Balance Sheet

The balance sheet reflects a healthy financial position with no total debt in the most recent year, enhancing stability. The company has a solid equity base, and the return on equity is strong, reflecting efficient use of equity. The equity ratio has improved, indicating a better capital structure and reduced financial risk.

Cash Flow

Cash flow analysis highlights strong operating cash flow relative to net income, indicating effective cash management. Free cash flow has grown significantly, suggesting robust cash generation capability. The free cash flow to net income ratio is favorable, indicating potential for reinvestment and shareholder returns.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
9.39B	7.66B	16.00B	10.19B	11.16B
	Gross Profit
16.63B	7.66B	14.63B	9.29B	9.74B
	EBIT
5.26B	3.66B	5.44B	5.50B	1.80B
	EBITDA
0.00	0.00	4.89B	6.36B	2.84B
	Net Income Common Stockholders
3.50B	2.24B	3.02B	4.22B	1.39B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
17.79B	18.06B	15.17B	13.62B	18.99B
	Total Assets
119.46B	117.48B	104.56B	95.75B	95.95B
	Total Debt
15.46B	15.98B	14.19B	14.51B	15.78B
	Net Debt
751.00M	1.72B	3.90B	6.17B	4.25B
	Total Liabilities
102.88B	103.58B	91.69B	82.09B	83.25B
	Stockholders Equity
16.58B	13.90B	12.87B	13.65B	12.70B
Cash Flow		Free Cash Flow
9.85B	8.59B	6.69B	7.10B	7.49B
	Operating Cash Flow
9.85B	8.59B	6.69B	7.10B	7.49B
	Investing Cash Flow
-8.90B	-14.23B	-10.23B	-4.81B	-498.00M
	Financing Cash Flow
-611.00M	9.63B	5.28B	-5.20B	-8.03B

Synchrony Financial Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 44.81
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SYF, the sentiment is Negative. The current price of 44.81 is below the 20-day moving average (MA) of 52.48, below the 50-day MA of 58.80, and below the 200-day MA of 56.12, indicating a bearish trend. The MACD of -1.76 indicates Negative momentum. The RSI at 39.11 is Neutral, neither overbought nor oversold. The STOCH value of 30.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SYF.

Synchrony Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DFS	77 Outperform	$37.00B	8.30	24.68%	1.90%	15.46%	45.83%
IX	71 Outperform	$21.35B	8.21	10.07%	3.47%	0.31%	34.40%
ALLY	69 Neutral	$9.87B	17.85	6.63%	3.74%	3.41%	-12.41%
OMF	66 Neutral	$4.90B	9.68	15.96%	10.14%	7.96%	-20.11%
SYF	65 Neutral	$17.03B	5.12	22.96%	2.28%	19.73%	65.57%
SOFI	64 Neutral	$10.49B	25.80	8.26%	―	29.33%	―
Sector *	63 Neutral	$12.88B	9.21	9.18%	4.78%	16.30%	-8.66%

Synchrony Financial Corporate Events

Synchrony Financial Releases January 2025 Charge-Off Data

Synchrony Financial has released its monthly charge-off and delinquency statistics for the thirteen months ending January 31, 2025. The company plans to continue providing these statistics each month, highlighting trends in its financial performance that could impact stakeholders and reflect its operational focus on maintaining transparency.

Synchrony Financial Releases Charge-Off and Delinquency Data

Synchrony Financial has released its monthly charge-off and delinquency statistics for the thirteen months ending December 31, 2024. The data shows that the 30+ delinquency rate remained flat year-over-year, attributed to credit actions, while the net charge-off rate increased due to moderation in customer payment rates and additional charge-off cycles. This release is part of a regular monthly update, with statistics for the last month of each calendar quarter coinciding with financial results announcements.