PENNYMAC FINANCIAL SERVICES (PFSI)
US70932M1071 - Common Stock
We assign a fundamental rating of 4 out of 10 to PFSI. PFSI was compared to 102 industry peers in the Financial Services industry. Both the profitability and financial health of PFSI have multiple concerns. PFSI is valued quite cheap, while showing a decent growth score. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year PFSI was profitable.
In the past year PFSI had a positive cash flow from operations.
Each year in the past 5 years PFSI has 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
Looking at the Return On Assets, with a value of 0.78%, PFSI is in line with its industry, outperforming 44.12% of the companies in the same industry.
Looking at the Return On Equity, with a value of 4.30%, PFSI is doing worse than 60.78% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 1.47%, PFSI is in line with its industry, outperforming 46.08% of the companies in the same industry.
PFSI had an Average Return On Invested Capital over the past 3 years of 3.56%. This is below the industry average of 7.89%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.78% | ||
| ROE | 4.3% | ||
| ROIC | 1.47% |
ROA(3y)2.98%
ROA(5y)3.6%
ROE(3y)15.72%
ROE(5y)22.96%
ROIC(3y)3.56%
ROIC(5y)4.1%
1.3 Margins
PFSI's Profit Margin of 7.40% is in line compared to the rest of the industry. PFSI outperforms 49.02% of its industry peers.
In the last couple of years the Profit Margin of PFSI has declined.
With a Operating Margin value of 17.03%, PFSI perfoms like the industry average, outperforming 57.84% of the companies in the same industry.
PFSI's Operating Margin has declined in the last couple of years.
With an excellent Gross Margin value of 67.64%, PFSI belongs to the best of the industry, outperforming 80.39% 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 | 17.03% | ||
| PM (TTM) | 7.4% | ||
| GM | 67.64% |
OM growth 3Y-33.08%
OM growth 5Y-6.45%
PM growth 3Y-44.46%
PM growth 5Y-1.8%
GM growth 3Y-9.65%
GM growth 5Y-4.65%
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
PFSI has less shares outstanding than it did 5 years ago.
PFSI has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.20, we must say that PFSI is in the distress zone and has some risk of bankruptcy.
PFSI has a Altman-Z score of 0.20. This is in the lower half of the industry: PFSI underperforms 62.75% of its industry peers.
The Debt to FCF ratio of PFSI is 13.64, which is on the high side as it means it would take PFSI, 13.64 years of fcf income to pay off all of its debts.
PFSI has a Debt to FCF ratio (13.64) which is comparable to the rest of the industry.
A Debt/Equity ratio of 2.81 is on the high side and indicates that PFSI has dependencies on debt financing.
PFSI's Debt to Equity ratio of 2.81 is on the low side compared to the rest of the industry. PFSI is outperformed by 76.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.81 | ||
| Debt/FCF | 13.64 | ||
| Altman-Z | 0.2 |
ROIC/WACC0.17
WACC8.61%
2.3 Liquidity
A Current Ratio of 0.13 indicates that PFSI may have some problems paying its short term obligations.
With a Current ratio value of 0.13, PFSI is not doing good in the industry: 78.43% of the companies in the same industry are doing better.
PFSI has a Quick Ratio of 0.13. This is a bad value and indicates that PFSI is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.13, PFSI is doing worse than 78.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.13 | ||
| Quick Ratio | 0.13 |
3. Growth
3.1 Past
PFSI shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -23.26%.
The Earnings Per Share has been growing slightly by 1.07% on average over the past years.
PFSI shows a small growth in Revenue. In the last year, the Revenue has grown by 2.73%.
The Revenue has been growing by 12.55% on average over the past years. This is quite good.
EPS 1Y (TTM)-23.26%
EPS 3Y-49.56%
EPS 5Y1.07%
EPS growth Q2Q335.09%
Revenue 1Y (TTM)2.73%
Revenue growth 3Y-19.96%
Revenue growth 5Y12.55%
Revenue growth Q2Q0.92%
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 80.29% on average per year.
The Revenue is expected to grow by 17.99% on average over the next years. This is quite good.
EPS Next Y288.94%
EPS Next 2Y115.28%
EPS Next 3Y80.29%
EPS Next 5YN/A
Revenue Next Year31.4%
Revenue Next 2Y21.83%
Revenue Next 3Y17.99%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
A Price/Earnings ratio of 20.33 indicates a rather expensive valuation of PFSI.
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 28.52.
Based on the Price/Forward Earnings ratio of 7.48, 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 84.31% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.13. PFSI is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.33 | ||
| Fwd PE | 7.48 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as PFSI.
PFSI's Price/Free Cash Flow ratio is rather cheap when compared to the industry. PFSI is cheaper than 88.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.34 | ||
| EV/EBITDA | 20.46 |
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 80.29% in the coming years.
PEG (NY)0.07
PEG (5Y)19.06
EPS Next 2Y115.28%
EPS Next 3Y80.29%
5. Dividend
5.1 Amount
PFSI has a yearly dividend return of 0.86%, which is pretty low.
PFSI's Dividend Yield is a higher than the industry average which is at 3.43.
Compared to an average S&P500 Dividend Yield of 2.32, PFSI's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
5.2 History
On average, the dividend of PFSI grows each year by 32.84%, 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 recently.
Dividend Growth(5Y)32.84%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
PFSI pays out 26.72% of its income as dividend. This is a sustainable payout ratio.
The dividend of PFSI is growing, but earnings are growing more, so the dividend growth is sustainable.
DP26.72%
EPS Next 2Y115.28%
EPS Next 3Y80.29%
PENNYMAC FINANCIAL SERVICES
NYSE:PFSI (5/21/2024, 7:04:00 PM)
After market: 93.92 0 (0%)93.92
-0.11 (-0.12%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap4.78B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.33 | ||
| Fwd PE | 7.48 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.07
PEG (5Y)19.06
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.78% | ||
| ROE | 4.3% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.03% | ||
| PM (TTM) | 7.4% | ||
| GM | 67.64% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.81 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.13 | ||
| Quick Ratio | 0.13 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-23.26%
EPS 3Y-49.56%
EPS 5Y
EPS growth Q2Q
EPS Next Y288.94%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)2.73%
Revenue growth 3Y-19.96%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y