PENNYMAC FINANCIAL SERVICES (PFSI) Stock Fundamental Analysis
NYSE:PFSI - US70932M1071 - Common Stock
110.1 USD
+1.24 (+1.14%)
110.1 USD
0 (0%)
Taking everything into account, PFSI scores 4 out of 10 in our fundamental rating. PFSI was compared to 100 industry peers in the Financial Services industry. Both the profitability and financial health of PFSI have multiple concerns. PFSI is not overvalued while it is showing excellent growth. This is an interesting combination.
1. Profitability
1.1 Basic Checks
PFSI had positive earnings in the past year.
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
The Return On Assets of PFSI (1.60%) is comparable to the rest of the industry.
The Return On Equity of PFSI (9.59%) is comparable to the rest of the industry.
PFSI has a Return On Invested Capital (1.41%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for PFSI is significantly below the industry average of 7.71%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.6% | ||
| ROE | 9.59% | ||
| ROIC | 1.41% |
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's Profit Margin of 14.58% is fine compared to the rest of the industry. PFSI outperforms 64.00% of its industry peers.
In the last couple of years the Profit Margin of PFSI has declined.
The Operating Margin of PFSI (15.30%) is comparable to the rest of the industry.
PFSI's Operating Margin has declined in the last couple of years.
With a decent Gross Margin value of 66.30%, PFSI is doing good in the industry, outperforming 79.00% of the companies in the same industry.
PFSI's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.3% | ||
| PM (TTM) | 14.58% | ||
| GM | 66.3% |
OM growth 3Y-24.13%
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.
Compared to 1 year ago, PFSI has more shares outstanding
Compared to 5 years ago, PFSI has less shares outstanding
PFSI has a worse debt/assets ratio than last year.
2.2 Solvency
PFSI has an Altman-Z score of 0.09. This is a bad value and indicates that PFSI is not financially healthy and even has some risk of bankruptcy.
PFSI's Altman-Z score of 0.09 is on the low side compared to the rest of the industry. PFSI is outperformed by 60.00% of its industry peers.
PFSI has a Debt/Equity ratio of 3.34. This is a high value indicating a heavy dependency on external financing.
PFSI has a worse Debt to Equity ratio (3.34) than 77.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.34 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.09 |
ROIC/WACC0.17
WACC8.45%
2.3 Liquidity
PFSI has a Current Ratio of 0.02. 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 Current ratio (0.02) than 83.00% of its industry peers.
PFSI has a Quick Ratio of 0.02. 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's Quick ratio of 0.02 is on the low side compared to the rest of the industry. PFSI is outperformed by 83.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.02 | ||
| Quick Ratio | 0.02 |
3. Growth
3.1 Past
PFSI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 34.51%, which is quite impressive.
Measured over the past years, PFSI shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.16% on average per year.
PFSI shows a strong growth in Revenue. In the last year, the Revenue has grown by 21.88%.
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)34.51%
EPS 3Y-19.77%
EPS 5Y9.16%
EPS Q2Q%37.3%
Revenue 1Y (TTM)21.88%
Revenue growth 3Y-12.14%
Revenue growth 5Y7.39%
Sales Q2Q%9.51%
3.2 Future
PFSI is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 30.55% yearly.
Based on estimates for the next years, PFSI will show a very strong growth in Revenue. The Revenue will grow by 20.08% on average per year.
EPS Next Y26.52%
EPS Next 2Y38.34%
EPS Next 3Y30.55%
EPS Next 5YN/A
Revenue Next Year26.61%
Revenue Next 2Y25.05%
Revenue Next 3Y20.08%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 15.27, PFSI is valued correctly.
PFSI's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.08, PFSI is valued a bit cheaper.
With a Price/Forward Earnings ratio of 7.59, the valuation of PFSI can be described as very cheap.
Based on the Price/Forward Earnings ratio, PFSI is valued a bit cheaper than 75.00% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.72, PFSI is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.27 | ||
| Fwd PE | 7.59 |
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 | 23.08 |
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.
A more expensive valuation may be justified as PFSI's earnings are expected to grow with 30.55% in the coming years.
PEG (NY)0.58
PEG (5Y)1.67
EPS Next 2Y38.34%
EPS Next 3Y30.55%
5. Dividend
5.1 Amount
PFSI has a Yearly Dividend Yield of 1.16%.
PFSI's Dividend Yield is comparable with the industry average which is at 4.27.
With a Dividend Yield of 1.16, PFSI pays less dividend than the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
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 16.08% 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.
DP16.08%
EPS Next 2Y38.34%
EPS Next 3Y30.55%
110.1
+1.24 (+1.14%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners62.2%
Inst Owner Change-2.47%
Ins Owners4.73%
Ins Owner Change-0.35%
Market Cap5.69B
Analysts80
Price Target124.15 (12.76%)
Short Float %5.41%
Short Ratio4.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
Yearly Dividend1.03
Dividend Growth(5Y)52.53%
DP16.08%
Div Incr Years1
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-31.14%
Min EPS beat(2)-49.34%
Max EPS beat(2)-12.94%
EPS beat(4)0
Avg EPS beat(4)-39.28%
Min EPS beat(4)-56.05%
Max EPS beat(4)-12.94%
EPS beat(8)2
Avg EPS beat(8)-40.93%
EPS beat(12)3
Avg EPS beat(12)-26.91%
EPS beat(16)6
Avg EPS beat(16)-13.72%
Revenue beat(2)0
Avg Revenue beat(2)-21.13%
Min Revenue beat(2)-21.27%
Max Revenue beat(2)-20.99%
Revenue beat(4)0
Avg Revenue beat(4)-18.77%
Min Revenue beat(4)-21.27%
Max Revenue beat(4)-11.77%
Revenue beat(8)0
Avg Revenue beat(8)-17.07%
Revenue beat(12)2
Avg Revenue beat(12)-9.01%
Revenue beat(16)6
Avg Revenue beat(16)-4.29%
PT rev (1m)-2.73%
PT rev (3m)-2.34%
EPS NQ rev (1m)-16.99%
EPS NQ rev (3m)-22.71%
EPS NY rev (1m)-12.73%
EPS NY rev (3m)-14.52%
Revenue NQ rev (1m)-0.78%
Revenue NQ rev (3m)-7.58%
Revenue NY rev (1m)-4.29%
Revenue NY rev (3m)-5.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.27 | ||
| Fwd PE | 7.59 | ||
| P/S | 2.15 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.41 | ||
| P/tB | N/A | ||
| EV/EBITDA | 23.08 |
EPS(TTM)7.21
EY6.55%
EPS(NY)14.51
Fwd EY13.18%
FCF(TTM)-31.67
FCFYN/A
OCF(TTM)-31.09
OCFYN/A
SpS51.27
BVpS77.98
TBVpS-108.51
PEG (NY)0.58
PEG (5Y)1.67
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.6% | ||
| ROE | 9.59% | ||
| ROCE | 2.8% | ||
| ROIC | 1.41% | ||
| ROICexc | 1.42% | ||
| ROICexgc | 4.79% | ||
| OM | 15.3% | ||
| PM (TTM) | 14.58% | ||
| GM | 66.3% | ||
| 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-15.06%
ROICexc growth 3Y-40.19%
ROICexc growth 5Y-21.68%
OM growth 3Y-24.13%
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 | 3.34 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 28.29 | ||
| Cap/Depr | 42.94% | ||
| Cap/Sales | 1.13% | ||
| Interest Coverage | 0.46 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.02 | ||
| Quick Ratio | 0.02 | ||
| Altman-Z | 0.09 |
F-Score4
WACC8.45%
ROIC/WACC0.17
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)34.51%
EPS 3Y-19.77%
EPS 5Y9.16%
EPS Q2Q%37.3%
EPS Next Y26.52%
EPS Next 2Y38.34%
EPS Next 3Y30.55%
EPS Next 5YN/A
Revenue 1Y (TTM)21.88%
Revenue growth 3Y-12.14%
Revenue growth 5Y7.39%
Sales Q2Q%9.51%
Revenue Next Year26.61%
Revenue Next 2Y25.05%
Revenue Next 3Y20.08%
Revenue Next 5YN/A
EBIT growth 1Y-2.15%
EBIT growth 3Y-33.34%
EBIT growth 5Y-5.32%
EBIT Next Year87.51%
EBIT Next 3Y41.46%
EBIT Next 5YN/A
FCF growth 1Y-37.12%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-41.67%
OCF growth 3YN/A
OCF growth 5YN/A