PENNYMAC FINANCIAL SERVICES (PFSI) Stock Fundamental Analysis
NYSE:PFSI - New York Stock Exchange, Inc. - US70932M1071 - Common Stock - Currency: USD
Taking everything into account, PFSI scores 4 out of 10 in our fundamental rating. PFSI was compared to 101 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
PFSI had positive earnings in the past year.
PFSI had a negative operating cash flow in the past year.
Each year in the past 5 years PFSI has been profitable.
In multiple years PFSI reported negative operating cash flow during the last 5 years.
1.2 Ratios
PFSI has a Return On Assets (1.60%) which is in line with its industry peers.
PFSI has a Return On Equity (9.59%) which is comparable to the rest of the industry.
PFSI has a Return On Invested Capital (1.41%) 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 7.76%.
| 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 62.38% of its industry peers.
PFSI's Profit Margin has declined in the last couple of years.
The Operating Margin of PFSI (15.30%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of PFSI has declined.
PFSI's Gross Margin of 66.30% is amongst the best of the industry. PFSI outperforms 80.20% of its industry peers.
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-24.14%
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.
The number of shares outstanding for PFSI has been increased compared to 1 year ago.
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 0.07, we must say that PFSI is in the distress zone and has some risk of bankruptcy.
PFSI has a Altman-Z score of 0.07. This is in the lower half of the industry: PFSI underperforms 62.38% 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.
Looking at the Debt to Equity ratio, with a value of 3.34, PFSI is doing worse than 75.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.34 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.07 |
ROIC/WACC0.17
WACC8.13%
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 83.17% of its industry peers.
A Quick Ratio of 0.02 indicates that PFSI may have some problems paying its short term obligations.
PFSI has a Quick ratio of 0.02. This is amonst the worse of the industry: PFSI underperforms 83.17% 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.
PFSI shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.16% yearly.
Looking at the last year, PFSI shows a very strong growth in Revenue. The Revenue has grown by 21.88%.
The Revenue has been growing slightly by 7.39% on average over the past years.
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
Based on estimates for the next years, PFSI will show a very strong growth in Earnings Per Share. The EPS will grow by 33.70% on average per year.
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 Y44.98%
EPS Next 2Y41.85%
EPS Next 3Y33.7%
EPS Next 5YN/A
Revenue Next Year30.13%
Revenue Next 2Y23.98%
Revenue Next 3Y20.08%
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
The Price/Earnings ratio is 13.71, which indicates a correct valuation of PFSI.
The rest of the industry has a similar Price/Earnings ratio as PFSI.
The average S&P500 Price/Earnings ratio is at 26.99. PFSI is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 6.48 indicates a rather cheap valuation of PFSI.
PFSI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PFSI is cheaper than 78.22% of the companies in the same industry.
PFSI's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 36.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.71 | ||
| Fwd PE | 6.48 |
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 | 22.04 |
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.
PFSI's earnings are expected to grow with 33.70% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.3
PEG (5Y)1.5
EPS Next 2Y41.85%
EPS Next 3Y33.7%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.29%, PFSI has a reasonable but not impressive dividend return.
PFSI's Dividend Yield is comparable with the industry average which is at 5.32.
With a Dividend Yield of 1.29, PFSI pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.29% |
5.2 History
The dividend of PFSI is nicely growing with an annual growth rate of 52.53%!
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 2Y41.85%
EPS Next 3Y33.7%
98.82
-0.42 (-0.42%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners62.3%
Inst Owner Change0.01%
Ins Owners4.78%
Ins Owner Change-0.21%
Market Cap5.11B
Analysts81.33
Price Target127.63 (29.15%)
Short Float %4.71%
Short Ratio4.16
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.29% |
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)0.4%
PT rev (3m)0.4%
EPS NQ rev (1m)-17.31%
EPS NQ rev (3m)-21%
EPS NY rev (1m)-2.39%
EPS NY rev (3m)-16.95%
Revenue NQ rev (1m)-2.3%
Revenue NQ rev (3m)-7.01%
Revenue NY rev (1m)-2.2%
Revenue NY rev (3m)-4.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.71 | ||
| Fwd PE | 6.48 | ||
| P/S | 1.93 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.27 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.04 |
EPS(TTM)7.21
EY7.3%
EPS(NY)15.25
Fwd EY15.43%
FCF(TTM)-31.67
FCFYN/A
OCF(TTM)-31.09
OCFYN/A
SpS51.27
BVpS77.98
TBVpS-108.51
PEG (NY)0.3
PEG (5Y)1.5
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-15.07%
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 | 3.34 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 28.3 | ||
| 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 | 0.07 |
F-Score4
WACC8.13%
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 Y44.98%
EPS Next 2Y41.85%
EPS Next 3Y33.7%
EPS Next 5YN/A
Revenue 1Y (TTM)21.88%
Revenue growth 3Y-12.14%
Revenue growth 5Y7.39%
Sales Q2Q%9.51%
Revenue Next Year30.13%
Revenue Next 2Y23.98%
Revenue Next 3Y20.08%
Revenue Next 5YN/A
EBIT growth 1Y-2.19%
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-37.12%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-41.67%
OCF growth 3YN/A
OCF growth 5YN/A