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 99 industry peers in the Financial Services industry. There are concerns on the financial health of PFSI while its profitability can be described as average. PFSI is not priced too expensively while it is growing strongly. Keep and eye on this one!
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.
In the past 5 years PFSI has always been profitable.
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
PFSI's Return On Assets of 1.46% is in line compared to the rest of the industry. PFSI outperforms 48.48% of its industry peers.
PFSI's Return On Equity of 8.92% is in line compared to the rest of the industry. PFSI outperforms 47.47% of its industry peers.
PFSI has a Return On Invested Capital (1.68%) which is in line with its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PFSI is significantly below the industry average of 11.83%.
| 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
With a decent Profit Margin value of 13.50%, PFSI is doing good in the industry, outperforming 60.61% of the companies in the same industry.
PFSI's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 17.94%, PFSI is doing good in the industry, outperforming 63.64% of the companies in the same industry.
In the last couple of years the Operating Margin of PFSI has declined.
With an excellent Gross Margin value of 66.61%, PFSI belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
In the last couple of years the Gross Margin of PFSI has declined.
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PFSI is destroying value.
PFSI has more shares outstanding than it did 1 year ago.
PFSI has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, PFSI has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.06, we must say that PFSI is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of PFSI (0.06) is worse than 65.66% 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.
PFSI's Debt to Equity ratio of 3.24 is on the low side compared to the rest of the industry. PFSI is outperformed by 74.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.24 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.06 |
ROIC/WACC0.2
WACC8.47%
2.3 Liquidity
A Current Ratio of 0.03 indicates that PFSI may have some problems paying its short term obligations.
The Current ratio of PFSI (0.03) is worse than 80.81% of its industry peers.
A Quick Ratio of 0.03 indicates that PFSI may have some problems paying its short term obligations.
PFSI has a worse Quick ratio (0.03) than 80.81% 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%.
Measured over the past years, PFSI shows a small growth in Revenue. The Revenue has been growing by 7.39% on average per year.
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.
PFSI is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 20.70% yearly.
EPS Next Y48.03%
EPS Next 2Y42.68%
EPS Next 3Y34.14%
EPS Next 5YN/A
Revenue Next Year34.07%
Revenue Next 2Y25.62%
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 14.53, 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.
PFSI's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.43.
With a Price/Forward Earnings ratio of 6.14, the valuation of PFSI can be described as very cheap.
PFSI's Price/Forward Earnings ratio is rather cheap when compared to the industry. PFSI is cheaper than 80.81% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.17, PFSI is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.53 | ||
| Fwd PE | 6.14 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as PFSI.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 19.45 |
4.3 Compensation for Growth
PFSI's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as PFSI's earnings are expected to grow with 34.14% in the coming years.
PEG (NY)0.3
PEG (5Y)1.59
EPS Next 2Y42.68%
EPS Next 3Y34.14%
5. Dividend
5.1 Amount
PFSI has a Yearly Dividend Yield of 1.24%. Purely for dividend investing, there may be better candidates out there.
PFSI's Dividend Yield is comparable with the industry average which is at 4.90.
With a Dividend Yield of 1.24, PFSI pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
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.
PFSI has decreased its dividend 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.
The dividend of PFSI is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP16.29%
EPS Next 2Y42.68%
EPS Next 3Y34.14%
NYSE:PFSI (6/5/2025, 10:23:15 AM)
94.74
-0.21 (-0.22%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners60.7%
Inst Owner Change4.36%
Ins Owners5.31%
Ins Owner Change-0.14%
Market Cap4.89B
Analysts82.86
Price Target127.12 (34.18%)
Short Float %5.29%
Short Ratio4.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
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)-3.83%
EPS NY rev (1m)-15.2%
EPS NY rev (3m)-14.73%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.65%
Revenue NY rev (1m)-1.53%
Revenue NY rev (3m)-6.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.53 | ||
| Fwd PE | 6.14 | ||
| P/S | 1.9 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.25 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.45 |
EPS(TTM)6.52
EY6.88%
EPS(NY)15.43
Fwd EY16.29%
FCF(TTM)-50.22
FCFYN/A
OCF(TTM)-49.74
OCFYN/A
SpS49.95
BVpS75.57
TBVpS-97.95
PEG (NY)0.3
PEG (5Y)1.59
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 | 0.06 |
F-Score4
WACC8.47%
ROIC/WACC0.2
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 Y48.03%
EPS Next 2Y42.68%
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 Year34.07%
Revenue Next 2Y25.62%
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