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Onity Group
(NYSE:ONIT)
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Rating:54Neutral
Price Target:
$28.00
▼(-18.84% Downside)
Action:Reiterated
Date:10/02/26
ONIT’s score is held back primarily by elevated financial risk (extreme leverage and consistently negative free cash flow) and a clearly bearish technical setup (price below all major moving averages with negative MACD). These are partly offset by very low valuation (P/E ~1.64) and an earnings update showing strong origination/subservicing momentum, though near-term guidance was tempered and servicing profitability was pressured by runoff and fair-value impacts.
Positive Factors
Origination growth and profitability
Record funded volume and sharply higher origination profitability indicate stronger production scale and improved execution across the mortgage platform. If sustained, greater volume can support operating leverage, reinforce channel competitiveness, and provide more opportunities to create servicing relationships.
Negative Factors
Extreme balance-sheet leverage
Very high leverage leaves limited equity protection if credit performance, asset values, or funding costs move adversely. It can also restrict capital allocation flexibility and increase dependence on financing, making the company’s earnings and balance-sheet resilience less durable.
Read all positive and negative factors
Positive Factors
Negative Factors
Origination growth and profitability
Record funded volume and sharply higher origination profitability indicate stronger production scale and improved execution across the mortgage platform. If sustained, greater volume can support operating leverage, reinforce channel competitiveness, and provide more opportunities to create servicing relationships.
Read all positive factors
Onity Group Key Performance Indicators (KPIs)
Any
Income Before Taxes by Segment
Reports pre-tax profit contribution from each segment, making it clear which parts of Onity Group are truly profitable versus those that simply boost revenue. Helps spot margin strengths or weaknesses, the impact of one-time items, and where operational improvements or pricing changes could lift overall profitability.
Reports pre-tax profit contribution from each segment, making it clear which parts of Onity Group are truly profitable versus those that simply boost revenue. Helps spot margin strengths or weaknesses, the impact of one-time items, and where operational improvements or pricing changes could lift overall profitability.
Data provided by:
The Fly
The FlyOnity Group (ONIT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$222.23M
Dividend YieldN/A
Average Volume (3M)91.24K
Price to Earnings (P/E)1.6
Beta (1Y)1.11
Revenue Growth23.02%
EPS Growth295.44%
CountryUS
Employees4,000
SectorFinancial
Sector Strength70
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)16.86
Shares Outstanding8,354,520
10 Day Avg. Volume156,000
30 Day Avg. Volume91,242
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.59
Price to Sales (P/S)0.34
P/FCF Ratio-0.33
Enterprise Value/Market Cap48.78
Enterprise Value/Revenue9.01
Enterprise Value/Gross Profit12.30
Enterprise Value/Ebitda31.76
Forecast
1Y Price Target
$49.67Price Target Upside43.96% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)2.21
Revenue Forecast (FY)$1.09B
Onity Group Business Overview & Revenue Model
Company Description
Onity Group Inc. operates as a financial services firm focused on the creation and administration of both conventional (forward) and reverse mortgage loans. Its business activities extend across the United States, the U.S. Virgin Islands, India, a...
How the Company Makes Money
Onity Group makes money primarily through a mix of mortgage loan origination and mortgage servicing-related activities. (1) Mortgage origination revenue: The company earns revenue by originating residential mortgage loans (including reverse mortga...
Onity Group Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call highlighted strong top-line momentum, record origination volume, notable servicing and subservicing growth, improved operating efficiency and technology-driven initiatives that are driving long-term improvement. However, results were weighed down by one-time transaction costs and fair value markdowns—particularly related to the volatile reverse MSR book—and servicing adjusted pretax income was meaningfully lower year-over-year due to elevated MSR runoff. Management has taken concrete actions (reverse asset sale, legacy subservicing transfers, continued technology investments and buybacks) to simplify the business, reduce volatility and improve ROE, but near-term guidance is conservative and reflects current market uncertainty.Positive Updates
Strong Revenue Growth
Revenue was up 24% year-over-year, driven by higher volumes and improved execution across both origination and servicing businesses.
Negative Updates
Q2 One-Time and Fair Value Charges
Net loss included roughly $33 million of pretax costs tied to the reverse asset sale and legacy subservicing transfer and market-driven unfavorable asset fair value adjustments; specifically noted were ~$9 million of transaction costs and ~$24 million of pretax fair value changes (about half related to reverse).
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Revenue Growth
Revenue was up 24% year-over-year, driven by higher volumes and improved execution across both origination and servicing businesses.
Read all positive updates
Company Guidance
Management said they now expect full‑year 2026 results toward the low end of their 10–15% adjusted pretax income/adjusted ROE guidance range, while keeping other guidance unchanged to grow total servicing UPB (Q2 ended +10% Y/Y vs industry +3%), expand subservicing (H1 additions $35B; subservicing UPB +25% Y/Y), and sustain origination strength (Q2 funded volume a record $15.5B, originations +64% Y/Y, origination adjusted pretax income >3x Y/Y, refinance recapture 51%); they reiterated a ~50/50 owned/subservicing target mix, continued buybacks ($10M completed, $20M ongoing), ongoing operating‑efficiency gains (12‑month trailing improvement), strong hedging, and lower MSR volatility after selling roughly 80% of reverse MSRs — while noting Q2 headwinds of about $9M of transaction costs plus ~$24M of pretax fair‑value marks (≈$33M total), MSR runoff up ~80% Y/Y and servicing adjusted pretax income down >60% Y/Y.Onity Group Financial Statement Overview
Summary
Income Statement
68
Positive
Balance Sheet
24
Negative
Cash Flow
18
Very Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.20B | 1.07B | 1.07B | 1.14B | 999.50M | 1.08B |
| Gross Profit | 881.70M | 1.01B | 495.60M | 584.50M | 459.20M | 521.00M |
| EBITDA | 341.30M | 580.40M | 256.10M | 238.80M | 285.50M | 235.80M |
| Net Income | 141.60M | 189.50M | 33.90M | -63.70M | 25.70M | 18.10M |
Balance Sheet | ||||||
| Total Assets | 12.35B | 16.17B | 16.44B | 12.51B | 12.40B | 12.15B |
| Cash, Cash Equivalents and Short-Term Investments | 196.60M | 180.50M | 184.80M | 201.60M | 208.00M | 192.80M |
| Total Debt | 10.84B | 15.18B | 14.74B | 10.93B | 10.46B | 10.47B |
| Total Liabilities | 11.69B | 15.54B | 15.94B | 12.11B | 11.94B | 11.67B |
| Stockholders Equity | 659.80M | 628.00M | 492.90M | 401.80M | 456.70M | 476.70M |
Cash Flow | ||||||
| Free Cash Flow | -2.33B | -1.12B | -688.70M | -111.80M | -31.70M | -1.30B |
| Operating Cash Flow | -2.11B | -748.00M | -651.00M | 10.40M | 173.20M | -468.40M |
| Investing Cash Flow | 1.77B | 1.85B | 478.50M | -100.30M | -149.10M | -1.01B |
| Financing Cash Flow | 468.40M | -1.10B | 182.90M | 70.80M | -13.40M | 1.38B |
Onity Group Technical Analysis
Negative
34.50
Price Trends
33.89
Negative
35.73
Negative
39.45
Negative
Market Momentum
-2.10
Positive
23.24
Positive
21.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ONIT, the sentiment is Negative. The current price of 34.5 is above the 20-day moving average (MA) of 30.18, above the 50-day MA of 33.89, and below the 200-day MA of 39.45, indicating a bearish trend. The MACD of -2.10 indicates Positive momentum. The RSI at 23.24 is Positive, neither overbought nor oversold. The STOCH value of 21.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ONIT.
Onity Group Risk Analysis
Onity Group disclosed 68 risk factors in its most recent earnings report. Onity Group reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Onity Group Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
62 Neutral | $581.56M | 5.30 | 15.83% | ― | 31.59% | 17.94% | |
59 Neutral | $250.25M | 5.85 | 9.13% | ― | -1.14% | 73.36% | |
59 Neutral | $69.73M | 20.63 | 2.95% | ― | ― | -13.27% | |
54 Neutral | $222.23M | 1.58 | 23.42% | ― | 23.02% | 295.44% | |
52 Neutral | $117.96M | -27.29 | >-0.01% | 13.21% | -23.84% | -348.41% | |
42 Neutral | $32.87M | >-0.01 | -24.56% | ― | ― | ― |
* Financial Sector Average
ONIT
Onity Group
26.60
-9.81
-26.94%
GHI
Greystone Housing Impact Investors
5.07
-3.82
-42.94%
SNFCA
Security National Financial
9.18
1.46
18.87%
CNF
CNFinance Holdings
1.95
-2.41
-55.28%
IOR
Income Opportunity Realty Investors
17.15
-1.47
-7.89%
VEL
Velocity Financial
14.73
-3.40
-18.75%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.