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PennyMac Financial
(NYSE:PFSI)
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Rating:55Neutral
Price Target:
$65.00
▼(-10.84% Downside)
Action:Reiterated
Date:08/29/26
The score is held back primarily by negative/volatile cash flow and high leverage (funding sensitivity) despite solid operating profitability. Weak technicals (below key moving averages with negative MACD) add near-term pressure. Offsetting factors include an attractive P/E with a modest dividend and moderately positive corporate/governance events.
Positive Factors
Solid profitability and revenue recovery
Solid margins indicate that PennyMac is converting mortgage activity into meaningful operating profit, while renewed revenue growth signals recovery from the prior downturn. This earnings base can support investment in servicing scale and operating capabilities over the next several quarters.
Negative Factors
High financial leverage
Elevated leverage increases PennyMac’s sensitivity to funding conditions and market shocks, while reducing financial flexibility during weaker mortgage periods. The rise from earlier leverage levels suggests that balance-sheet risk is a persistent constraint on capital allocation and earnings stability.
Read all positive and negative factors
Positive Factors
Negative Factors
Solid profitability and revenue recovery
Solid margins indicate that PennyMac is converting mortgage activity into meaningful operating profit, while renewed revenue growth signals recovery from the prior downturn. This earnings base can support investment in servicing scale and operating capabilities over the next several quarters.
Read all positive factors
PennyMac Financial Key Performance Indicators (KPIs)
PennyMac Financial (PFSI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.30B
Dividend Yield1.94%
Average Volume (3M)513.77K
Price to Earnings (P/E)8.2
Beta (1Y)0.50
Revenue Growth24.08%
EPS Growth0.60%
CountryUS
Employees5,543
SectorFinancial
Sector Strength70
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)7.56
Shares Outstanding51,951,572
10 Day Avg. Volume666,972
30 Day Avg. Volume513,775
Financial Highlights & Ratios
PEG Ratio0.23
Price to Book (P/B)1.58
Price to Sales (P/S)1.54
P/FCF Ratio-4.83
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$91.33Price Target Upside25.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)5.39
Revenue Forecast (FY)$2.20B
PennyMac Financial Business Overview & Revenue Model
Company Description
PennyMac Financial Services, Inc. (PFSI), through its various subsidiaries, is actively engaged in mortgage banking and investment management activities across the United States. The company's operations are structured into three primary divisions...
How the Company Makes Money
PennyMac Financial primarily makes money through a combination of (1) mortgage production (originating and selling loans), (2) ongoing mortgage servicing and ownership/management of mortgage servicing rights (MSRs), and (3) investment/other mortga...
PennyMac Financial Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call presents a generally constructive operational story: strong adjusted earnings, production pretax income at multi-year highs, improving consumer direct recapture, clear technology-driven efficiency gains and disciplined capital returns (buybacks/dividend). Offsetting items include notable hedge and valuation-related losses, sequential declines in origination and lock volumes, elevated leverage and a lowered near-term ROE guide due to accelerated tech investment and softer market activity. Management emphasizes long-term targets (high-teens to low-20s ROE), expects technology benefits to materialize in H2 2026, and is actively managing leverage and MSR positioning.Positive Updates
Solid Adjusted Earnings and ROE
Net income $82M GAAP ($1.53/share) with adjusted net income $118M ($2.19/share); annualized GAAP ROE 8% and adjusted ROE 11%.
Negative Updates
Origination and Lock Volume Declines
Total acquisition and origination volumes $37B UPB, down 12% QoQ; total lock volumes $44B UPB, down 4% QoQ; correspondent acquisitions $24B, down 20% QoQ.
Read all updates
Q1-2026 Updates
Positive
Negative
Solid Adjusted Earnings and ROE
Net income $82M GAAP ($1.53/share) with adjusted net income $118M ($2.19/share); annualized GAAP ROE 8% and adjusted ROE 11%.
Read all positive updates
Company Guidance
PennyMac guided adjusted ROEs to remain near current levels in Q2 and to rise to the low‑to‑mid‑teens in H2 2026 (revising down from prior mid‑to‑high‑teens guidance) due to accelerated technology investment and lower expected origination demand, while reiterating a medium‑to‑long‑term target of high‑teens to low‑20% ROEs; management expects tech benefits to materialize in H2 2026 (tech spend near peak now, then declining over the following 12–18 months) and a 24–36 month goal to drive servicing costs to $55 per loan, with the Cenlar subservicing acquisition expected to close in H2 and add strong returns once integrated. Capital and liquidity expectations are to keep total debt/equity near ~4.0x and non‑funding debt/equity near ~1.7x, with $4.2 billion of total liquidity; Q1 actions included a $0.30/share dividend and repurchase of 560,000 shares for $50 million (avg $89.28). Management anchored the outlook to recent results and operating metrics: Q1 net income $82m (GAAP EPS $1.53, annualized ROE 8%), adjusted net income $118m (adjusted EPS $2.19, annualized adjusted ROE 11%), mortgage banking operating pretax income $190m, production pretax income $134m, servicing UPB $720bn (including $320bn with note rates >5%, >50% of that >6%), servicing pretax excl. valuation $57m (3.1 bps of avg UPB), servicing operating expenses 4.5 bps, consumer direct direct expenses down 26% vs 2022, and a near‑100% hedge ratio (hedge costs $14m; hedge FV losses $221m; MSR FV increase $177m).PennyMac Financial Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
52
Neutral
Cash Flow
28
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.04B | 4.42B | 2.85B | 2.04B | 2.32B | 3.56B |
| Gross Profit | 3.01B | 2.62B | 1.37B | 847.47M | 1.31B | 2.13B |
| EBITDA | 576.51M | 620.77M | 472.28M | 424.06M | 738.93M | 1.40B |
| Net Income | 392.38M | 501.08M | 311.42M | 144.66M | 475.51M | 1.00B |
Balance Sheet | ||||||
| Total Assets | 29.86B | 29.39B | 26.09B | 18.84B | 16.82B | 18.78B |
| Cash, Cash Equivalents and Short-Term Investments | 748.00M | 711.72M | 659.03M | 948.64M | 1.34B | 346.94M |
| Total Debt | 23.68B | 23.06B | 20.55B | 13.49B | 11.80B | 13.99B |
| Total Liabilities | 25.52B | 25.08B | 22.26B | 15.31B | 13.35B | 15.36B |
| Stockholders Equity | 4.34B | 4.31B | 3.83B | 3.54B | 3.47B | 3.42B |
Cash Flow | ||||||
| Free Cash Flow | -1.55B | -1.41B | -4.56B | -1.62B | 5.95B | 2.51B |
| Operating Cash Flow | -1.53B | -1.40B | -4.53B | -1.58B | 6.03B | 2.56B |
| Investing Cash Flow | -113.68M | 300.42M | -1.89B | -273.29M | -721.58M | -304.37M |
| Financing Cash Flow | 1.69B | 1.16B | 5.72B | 1.47B | -4.32B | -2.45B |
PennyMac Financial Technical Analysis
Negative
72.90
Price Trends
73.46
Negative
78.56
Negative
92.01
Negative
Market Momentum
-2.99
Positive
21.34
Positive
7.29
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PFSI, the sentiment is Negative. The current price of 72.9 is above the 20-day moving average (MA) of 67.83, below the 50-day MA of 73.46, and below the 200-day MA of 92.01, indicating a bearish trend. The MACD of -2.99 indicates Positive momentum. The RSI at 21.34 is Positive, neither overbought nor oversold. The STOCH value of 7.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PFSI.
PennyMac Financial Risk Analysis
PennyMac Financial disclosed 65 risk factors in its most recent earnings report. PennyMac Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PennyMac Financial 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% | |
56 Neutral | $33.10B | 73.59 | 2.40% | 5.58% | 95.19% | ― | |
55 Neutral | $3.30B | 8.16 | 9.14% | 1.94% | 24.08% | 0.60% | |
46 Neutral | $1.25B | 30.01 | 2.33% | 7.72% | 9.22% | -65.41% | |
46 Neutral | $1.99B | -14.73 | -20.07% | 33.90% | 11.65% | -440.08% | |
45 Neutral | $194.48M | -1.00 | -465.27% | ― | 41.17% | 16.62% | |
41 Neutral | $204.96M | -1.95 | -30.86% | 23.07% | 17.11% | 9.17% |
* Financial Sector Average
PFSI
PennyMac Financial
61.72
-62.51
-50.32%
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BETR
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PennyMac Financial Corporate Events
Business Operations and StrategyFinancial Disclosures
PennyMac Financial Updates Outlook Amid Rising Mortgage Rates
Neutral
Sep 14, 2026
In an investor update prepared for the Barclays Global Financial Services Conference in September 2026, PennyMac Financial outlined recent trends in its production and servicing businesses. With mortgage rates up about 50 basis points since June 3...
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.