PennyMac Financial Services, Inc. Fundamental Analysis (NYSE: PFSI)
PennyMac Financial Services, Inc. Fundamental Analysis (NYSE: PFSI)
PennyMac Financial Services, Inc. (NYSE: PFSI) shows moderate financial fundamentals with a PE ratio of 9.95, profit margin of 12.62%, and ROE of 9.14%. The company generates $3.1B in annual revenue with weak year-over-year growth of 1.74%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of -5.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze PFSI's fundamental strength across five key dimensions:
Efficiency Score
WeakPFSI struggles to generate sufficient returns from assets.
Valuation Score
ModeratePFSI shows balanced valuation metrics.
Growth Score
ModeratePFSI shows steady but slowing expansion.
Financial Health Score
WeakPFSI carries high financial risk with limited liquidity.
Profitability Score
WeakPFSI struggles to sustain strong margins.
Key Financial Metrics
Is PFSI Expensive or Cheap?
P/E Ratio
PFSI trades at 9.95 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, PFSI's PEG of 18.70 indicates potential overvaluation.
Price to Book
The market values PennyMac Financial Services, Inc. at 0.90 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -15.11 times EBITDA. This is generally considered low.
How Well Does PFSI Make Money?
Net Profit Margin
For every $100 in sales, PennyMac Financial Services, Inc. keeps $12.62 as profit after all expenses.
Operating Margin
Core operations generate 30.84 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $9.14 in profit for every $100 of shareholder equity.
ROA
PennyMac Financial Services, Inc. generates $1.31 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
PennyMac Financial Services, Inc. generates limited operating cash flow of $-1.53B, signaling weaker underlying cash strength.
Free Cash Flow
PennyMac Financial Services, Inc. generates weak or negative free cash flow of $-1.55B, restricting financial flexibility.
FCF Per Share
Each share generates $-29.85 in free cash annually.
FCF Yield
PFSI converts -39.77% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
9.95
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
18.70
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.90
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.26
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
5.46
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.04
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.01
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How PFSI Stacks Against Its Sector Peers
| Metric | PFSI Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 9.95 | 21.10 | Better (Cheaper) |
| ROE | 9.14% | 652.00% | Weak |
| Net Margin | 12.62% | -1585.00% (disorted) | Strong |
| Debt/Equity | 5.46 | 0.91 | Weak (High Leverage) |
| Current Ratio | 0.04 | 910.69 | Weak Liquidity |
| ROA | 1.31% | -574.00% (disorted) | Weak |
PFSI outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews PennyMac Financial Services, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
60.42%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
-55.79%
Industry Style: Value, Dividend, Cyclical
DecliningFCF CAGR
67.19%
Industry Style: Value, Dividend, Cyclical
High Growth