PENNYMAC FINANCIAL SERVICES (PFSI) Stock Fundamental Analysis
NYSE:PFSI - New York Stock Exchange, Inc. - US70932M1071 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to PFSI. PFSI was compared to 100 industry peers in the Financial Services industry. PFSI has a medium profitability rating, but doesn't score so well on its financial health evaluation. PFSI is growing strongly while it is still valued neutral. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year PFSI was profitable.
In the past year PFSI has reported a negative cash flow from operations.
PFSI had positive earnings in each of the past 5 years.
The reported operating cash flow has been mixed in the past 5 years: PFSI reported negative operating cash flow in multiple years.
1.2 Ratios
With a Return On Assets value of 1.46%, PFSI perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
With a Return On Equity value of 8.92%, PFSI perfoms like the industry average, outperforming 48.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 1.68%, PFSI is in line with its industry, outperforming 44.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for PFSI is significantly below the industry average of 11.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.46% | ||
| ROE | 8.92% | ||
| ROIC | 1.68% |
ROA(3y)1.6%
ROA(5y)3.07%
ROE(3y)8.64%
ROE(5y)20.77%
ROIC(3y)2.11%
ROIC(5y)3.65%
1.3 Margins
PFSI has a Profit Margin of 13.50%. This is comparable to the rest of the industry: PFSI outperforms 60.00% of its industry peers.
In the last couple of years the Profit Margin of PFSI has declined.
PFSI's Operating Margin of 17.94% is fine compared to the rest of the industry. PFSI outperforms 64.00% of its industry peers.
In the last couple of years the Operating Margin of PFSI has declined.
Looking at the Gross Margin, with a value of 66.61%, PFSI belongs to the top of the industry, outperforming 81.00% of the companies in the same industry.
PFSI's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.94% | ||
| PM (TTM) | 13.5% | ||
| GM | 66.61% |
OM growth 3Y-24.14%
OM growth 5Y-11.84%
PM growth 3Y-22.94%
PM growth 5Y-11.12%
GM growth 3Y-9.47%
GM growth 5Y-5.46%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PFSI is destroying value.
PFSI has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, PFSI has less shares outstanding
The debt/assets ratio for PFSI is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.07, we must say that PFSI is in the distress zone and has some risk of bankruptcy.
PFSI's Altman-Z score of 0.07 is on the low side compared to the rest of the industry. PFSI is outperformed by 65.00% of its industry peers.
A Debt/Equity ratio of 3.24 is on the high side and indicates that PFSI has dependencies on debt financing.
The Debt to Equity ratio of PFSI (3.24) is worse than 74.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.24 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.07 |
ROIC/WACC0.26
WACC6.5%
2.3 Liquidity
PFSI has a Current Ratio of 0.03. This is a bad value and indicates that PFSI is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of PFSI (0.03) is worse than 82.00% of its industry peers.
PFSI has a Quick Ratio of 0.03. This is a bad value and indicates that PFSI is not financially healthy enough and could expect problems in meeting its short term obligations.
PFSI has a worse Quick ratio (0.03) than 82.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.03 | ||
| Quick Ratio | 0.03 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 41.13% over the past year.
The Earnings Per Share has been growing by 9.16% on average over the past years. This is quite good.
PFSI shows a strong growth in Revenue. In the last year, the Revenue has grown by 24.29%.
PFSI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.39% yearly.
EPS 1Y (TTM)41.13%
EPS 3Y-19.77%
EPS 5Y9.16%
EPS Q2Q%-42.74%
Revenue 1Y (TTM)24.29%
Revenue growth 3Y-12.14%
Revenue growth 5Y7.39%
Sales Q2Q%40.97%
3.2 Future
Based on estimates for the next years, PFSI will show a very strong growth in Earnings Per Share. The EPS will grow by 34.14% on average per year.
The Revenue is expected to grow by 20.70% on average over the next years. This is a very strong growth
EPS Next Y48.53%
EPS Next 2Y42.3%
EPS Next 3Y34.14%
EPS Next 5YN/A
Revenue Next Year33.05%
Revenue Next 2Y24.67%
Revenue Next 3Y20.7%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 15.47, PFSI is valued correctly.
Compared to the rest of the industry, the Price/Earnings ratio of PFSI is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 27.15, PFSI is valued a bit cheaper.
With a Price/Forward Earnings ratio of 6.57, the valuation of PFSI can be described as very cheap.
Based on the Price/Forward Earnings ratio, PFSI is valued cheaply inside the industry as 81.00% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.60, PFSI is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.47 | ||
| Fwd PE | 6.57 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PFSI is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 19.9 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PFSI's earnings are expected to grow with 34.14% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.32
PEG (5Y)1.69
EPS Next 2Y42.3%
EPS Next 3Y34.14%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.20%, PFSI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.97, PFSI has a dividend in line with its industry peers.
With a Dividend Yield of 1.20, PFSI pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.2% |
5.2 History
On average, the dividend of PFSI grows each year by 52.53%, which is quite nice.
PFSI has been paying a dividend for over 5 years, so it has already some track record.
The dividend of PFSI decreased in the last 3 years.
Dividend Growth(5Y)52.53%
Div Incr Years1
Div Non Decr Years2
5.3 Sustainability
PFSI pays out 16.29% of its income as dividend. This is a sustainable payout ratio.
PFSI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP16.29%
EPS Next 2Y42.3%
EPS Next 3Y34.14%
NYSE:PFSI (7/1/2025, 11:46:46 AM)
100.86
+1.22 (+1.22%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners62.3%
Inst Owner Change4.36%
Ins Owners4.78%
Ins Owner Change-0.14%
Market Cap5.21B
Analysts82.86
Price Target127.12 (26.04%)
Short Float %5.06%
Short Ratio5.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.2% |
Yearly Dividend1.03
Dividend Growth(5Y)52.53%
DP16.29%
Div Incr Years1
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-44.06%
Min EPS beat(2)-49.34%
Max EPS beat(2)-38.77%
EPS beat(4)0
Avg EPS beat(4)-43.46%
Min EPS beat(4)-56.05%
Max EPS beat(4)-29.68%
EPS beat(8)2
Avg EPS beat(8)-42.7%
EPS beat(12)4
Avg EPS beat(12)-17.27%
EPS beat(16)6
Avg EPS beat(16)-13.54%
Revenue beat(2)0
Avg Revenue beat(2)-16.38%
Min Revenue beat(2)-20.99%
Max Revenue beat(2)-11.77%
Revenue beat(4)0
Avg Revenue beat(4)-17.12%
Min Revenue beat(4)-21.05%
Max Revenue beat(4)-11.77%
Revenue beat(8)0
Avg Revenue beat(8)-16.5%
Revenue beat(12)3
Avg Revenue beat(12)-5.72%
Revenue beat(16)7
Avg Revenue beat(16)-2.68%
PT rev (1m)0%
PT rev (3m)-0.89%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-6.82%
EPS NY rev (1m)0.34%
EPS NY rev (3m)-13.89%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.16%
Revenue NY rev (1m)-0.76%
Revenue NY rev (3m)-6.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.47 | ||
| Fwd PE | 6.57 | ||
| P/S | 2.02 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.33 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.9 |
EPS(TTM)6.52
EY6.46%
EPS(NY)15.35
Fwd EY15.22%
FCF(TTM)-50.22
FCFYN/A
OCF(TTM)-49.74
OCFYN/A
SpS49.95
BVpS75.57
TBVpS-97.95
PEG (NY)0.32
PEG (5Y)1.69
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.46% | ||
| ROE | 8.92% | ||
| ROCE | 3.31% | ||
| ROIC | 1.68% | ||
| ROICexc | 1.7% | ||
| ROICexgc | 5.86% | ||
| OM | 17.94% | ||
| PM (TTM) | 13.5% | ||
| GM | 66.61% | ||
| FCFM | N/A |
ROA(3y)1.6%
ROA(5y)3.07%
ROE(3y)8.64%
ROE(5y)20.77%
ROIC(3y)2.11%
ROIC(5y)3.65%
ROICexc(3y)2.25%
ROICexc(5y)3.78%
ROICexgc(3y)12.97%
ROICexgc(5y)13.6%
ROCE(3y)3.67%
ROCE(5y)7.27%
ROICexcg growth 3Y-29.91%
ROICexcg growth 5Y-15.07%
ROICexc growth 3Y-40.2%
ROICexc growth 5Y-21.69%
OM growth 3Y-24.14%
OM growth 5Y-11.84%
PM growth 3Y-22.94%
PM growth 5Y-11.12%
GM growth 3Y-9.47%
GM growth 5Y-5.46%
F-Score4
Asset Turnover0.11
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.24 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 23.6 | ||
| Cap/Depr | 34.1% | ||
| Cap/Sales | 0.96% | ||
| Interest Coverage | 0.54 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.03 | ||
| Quick Ratio | 0.03 | ||
| Altman-Z | 0.07 |
F-Score4
WACC6.5%
ROIC/WACC0.26
Cap/Depr(3y)108.32%
Cap/Depr(5y)170.56%
Cap/Sales(3y)2.09%
Cap/Sales(5y)2%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)41.13%
EPS 3Y-19.77%
EPS 5Y9.16%
EPS Q2Q%-42.74%
EPS Next Y48.53%
EPS Next 2Y42.3%
EPS Next 3Y34.14%
EPS Next 5YN/A
Revenue 1Y (TTM)24.29%
Revenue growth 3Y-12.14%
Revenue growth 5Y7.39%
Sales Q2Q%40.97%
Revenue Next Year33.05%
Revenue Next 2Y24.67%
Revenue Next 3Y20.7%
Revenue Next 5YN/A
EBIT growth 1Y30.9%
EBIT growth 3Y-33.35%
EBIT growth 5Y-5.33%
EBIT Next Year109.59%
EBIT Next 3Y42.61%
EBIT Next 5YN/A
FCF growth 1Y-49.87%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-54.87%
OCF growth 3YN/A
OCF growth 5YN/A