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 101 industry peers in the Financial Services industry. PFSI has a bad profitability rating. Also its financial health evaluation is rather negative. 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.
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 of 1.19%. This is comparable to the rest of the industry: PFSI outperforms 44.55% of its industry peers.
The Return On Equity of PFSI (8.13%) is comparable to the rest of the industry.
PFSI's Return On Invested Capital of 1.33% is on the low side compared to the rest of the industry. PFSI is outperformed by 60.40% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PFSI is significantly below the industry average of 11.85%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.19% | ||
| ROE | 8.13% | ||
| ROIC | 1.33% |
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 Profit Margin value of 12.91%, PFSI perfoms like the industry average, outperforming 58.42% of the companies in the same industry.
In the last couple of years the Profit Margin of PFSI has declined.
With a Operating Margin value of 16.75%, PFSI perfoms like the industry average, outperforming 56.44% 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 66.05%, PFSI belongs to the best of the industry, outperforming 81.19% 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 | 16.75% | ||
| PM (TTM) | 12.91% | ||
| GM | 66.05% |
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.
Compared to 1 year ago, PFSI has more shares outstanding
The number of shares outstanding for PFSI has been reduced compared to 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 -0.03, we must say that PFSI is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of PFSI (-0.03) is worse than 65.35% of its industry peers.
PFSI has a Debt/Equity ratio of 3.59. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 3.59, PFSI is not doing good in the industry: 77.23% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.59 | ||
| Debt/FCF | N/A | ||
| Altman-Z | -0.03 |
ROIC/WACC0.15
WACC8.64%
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.
PFSI has a Current ratio of 0.03. This is amonst the worse of the industry: PFSI underperforms 81.19% 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 81.19% 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.
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 24.29%.
The Revenue has been growing slightly by 7.39% on average over the past years.
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
The Earnings Per Share is expected to grow by 34.60% on average over the next years. This is a very strong growth
PFSI is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 20.34% yearly.
EPS Next Y74.56%
EPS Next 2Y45.83%
EPS Next 3Y34.6%
EPS Next 5YN/A
Revenue Next Year36.16%
Revenue Next 2Y25.77%
Revenue Next 3Y20.34%
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.
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
A Price/Earnings ratio of 15.05 indicates a correct valuation of PFSI.
PFSI's Price/Earnings ratio is in line with the industry average.
PFSI is valuated rather cheaply when we compare the Price/Earnings ratio to 28.22, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 6.09 indicates a rather cheap valuation of PFSI.
Based on the Price/Forward Earnings ratio, PFSI is valued cheaply inside the industry as 85.15% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.86. PFSI is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.05 | ||
| Fwd PE | 6.09 |
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 | 21.03 |
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 34.60% in the coming years.
PEG (NY)0.2
PEG (5Y)1.64
EPS Next 2Y45.83%
EPS Next 3Y34.6%
5. Dividend
5.1 Amount
PFSI has a Yearly Dividend Yield of 1.24%.
Compared to an average industry Dividend Yield of 4.91, PFSI has a dividend in line with its industry peers.
With a Dividend Yield of 1.24, PFSI pays less dividend than the S&P500 average, which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
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 16.75% 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.
DP16.75%
EPS Next 2Y45.83%
EPS Next 3Y34.6%
98.11
+1.1 (+1.13%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners60.7%
Inst Owner Change0.05%
Ins Owners5.31%
Ins Owner Change-0.02%
Market Cap5.07B
Analysts82.86
Price Target127.12 (29.57%)
Short Float %4.68%
Short Ratio3.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
Yearly Dividend1.03
Dividend Growth(5Y)52.53%
DP16.75%
Div Incr Years1
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-47.41%
Min EPS beat(2)-56.05%
Max EPS beat(2)-38.77%
EPS beat(4)1
Avg EPS beat(4)-29.79%
Min EPS beat(4)-56.05%
Max EPS beat(4)5.33%
EPS beat(8)2
Avg EPS beat(8)-42.44%
EPS beat(12)5
Avg EPS beat(12)-11.68%
EPS beat(16)6
Avg EPS beat(16)-11.21%
Revenue beat(2)0
Avg Revenue beat(2)-16.41%
Min Revenue beat(2)-21.05%
Max Revenue beat(2)-11.77%
Revenue beat(4)0
Avg Revenue beat(4)-19.54%
Min Revenue beat(4)-30.7%
Max Revenue beat(4)-11.77%
Revenue beat(8)0
Avg Revenue beat(8)-15.69%
Revenue beat(12)4
Avg Revenue beat(12)-2.78%
Revenue beat(16)8
Avg Revenue beat(16)-1.21%
PT rev (1m)-0.89%
PT rev (3m)-0.12%
EPS NQ rev (1m)0.83%
EPS NQ rev (3m)-8.95%
EPS NY rev (1m)1.2%
EPS NY rev (3m)-6.67%
Revenue NQ rev (1m)2.39%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)-4.72%
Revenue NY rev (3m)-4.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.05 | ||
| Fwd PE | 6.09 | ||
| P/S | 2.09 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.32 | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.03 |
EPS(TTM)6.52
EY6.65%
EPS(NY)16.12
Fwd EY16.43%
FCF(TTM)-88.57
FCFYN/A
OCF(TTM)-88.14
OCFYN/A
SpS46.92
BVpS74.46
TBVpS-95.56
PEG (NY)0.2
PEG (5Y)1.64
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.19% | ||
| ROE | 8.13% | ||
| ROCE | 2.76% | ||
| ROIC | 1.33% | ||
| ROICexc | 1.34% | ||
| ROICexgc | 4.32% | ||
| OM | 16.75% | ||
| PM (TTM) | 12.91% | ||
| GM | 66.05% | ||
| 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-Score3
Asset Turnover0.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.59 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 29.01 | ||
| Cap/Depr | 31.72% | ||
| Cap/Sales | 0.92% | ||
| Interest Coverage | 0.51 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.03 | ||
| Quick Ratio | 0.03 | ||
| Altman-Z | -0.03 |
F-Score3
WACC8.64%
ROIC/WACC0.15
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 Y74.56%
EPS Next 2Y45.83%
EPS Next 3Y34.6%
EPS Next 5YN/A
Revenue 1Y (TTM)24.29%
Revenue growth 3Y-12.14%
Revenue growth 5Y7.39%
Sales Q2Q%40.97%
Revenue Next Year36.16%
Revenue Next 2Y25.77%
Revenue Next 3Y20.34%
Revenue Next 5YN/A
EBIT growth 1Y16.7%
EBIT growth 3Y-33.35%
EBIT growth 5Y-5.33%
EBIT Next Year115.33%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-181.47%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-186.51%
OCF growth 3YN/A
OCF growth 5YN/A