PennyMac Financial Services (NYSE:PFSI) Announces Earnings Results, Misses Estimates By $0.03 EPS

Key Points

• PennyMac missed estimates: the firm reported Q EPS of $2.19 vs. $2.22 expected and revenue of $544.98M vs. $557.09M, and its shares fell about 2.6% to $87.52 on above-average volume.
• Analysts remain generally positive with an average price target of $127.25 and multiple Outperform/Overweight ratings, but insiders have sold roughly 51,280 shares (~$4.63M) recently while institutional investors own about 57.9% of the stock.

PennyMac Financial Services (NYSE:PFSI - Get Free Report) released its earnings results on Tuesday. The real estate investment trust reported $2.19 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $2.22 by ($0.03), FiscalAI reports. The firm had revenue of $544.98 million for the quarter, compared to analyst estimates of $557.09 million. PennyMac Financial Services had a return on equity of 10.20% and a net margin of 24.48%.

PennyMac Financial Services Trading Down 2.6%

Shares of NYSE:PFSI traded down $2.37 during midday trading on Tuesday, reaching $87.52. The company had a trading volume of 1,022,250 shares, compared to its average volume of 776,508. The company has a debt-to-equity ratio of 3.32, a quick ratio of 0.34 and a current ratio of 0.34. PennyMac Financial Services has a 1-year low of $82.65 and a 1-year high of $160.36. The firm has a market cap of $4.57 billion, a price-to-earnings ratio of 9.41, a price-to-earnings-growth ratio of 0.53 and a beta of 1.49. The company has a fifty day simple moving average of $89.35 and a two-hundred day simple moving average of $113.92.

Analysts Set New Price Targets

A number of research firms recently issued reports on PFSI. Keefe, Bruyette & Woods raised PennyMac Financial Services from a "market perform" rating to an "outperform" rating and set a $115.00 target price on the stock in a report on Monday, March 16th. Piper Sandler lowered their target price on PennyMac Financial Services from $137.00 to $122.00 and set an "overweight" rating on the stock in a report on Thursday, April 2nd. Barclays lowered their target price on PennyMac Financial Services from $136.00 to $116.00 and set an "overweight" rating on the stock in a report on Monday, April 6th. Weiss Ratings lowered PennyMac Financial Services from a "buy (b-)" rating to a "hold (c+)" rating in a report on Tuesday, January 20th. Finally, Stephens began coverage on PennyMac Financial Services in a report on Friday, April 24th. They set an "equal weight" rating and a $100.00 target price on the stock. Six equities research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the stock. According to MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average target price of $127.25.

Insider Buying and Selling

In related news, insider Derek Stark sold 1,903 shares of the stock in a transaction on Wednesday, February 25th. The stock was sold at an average price of $91.50, for a total value of $174,124.50. Following the completion of the transaction, the insider owned 22,477 shares in the company, valued at $2,056,645.50. This trade represents a 7.81% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, CFO Daniel Stanley Perotti sold 2,925 shares of the stock in a transaction on Tuesday, February 17th. The shares were sold at an average price of $93.30, for a total value of $272,902.50. Following the completion of the transaction, the chief financial officer owned 213,550 shares of the company's stock, valued at $19,924,215. This trade represents a 1.35% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 51,280 shares of company stock worth $4,630,853. Company insiders own 15.80% of the company's stock.

Hedge Funds Weigh In On PennyMac Financial Services

A number of hedge funds and other institutional investors have recently modified their holdings of PFSI. Two Sigma Investments LP boosted its position in shares of PennyMac Financial Services by 1,148.7% in the 3rd quarter. Two Sigma Investments LP now owns 310,919 shares of the real estate investment trust's stock valued at $38,517,000 after purchasing an additional 286,019 shares during the period. Holocene Advisors LP boosted its position in shares of PennyMac Financial Services by 2,379.5% in the 3rd quarter. Holocene Advisors LP now owns 245,268 shares of the real estate investment trust's stock valued at $30,384,000 after purchasing an additional 235,376 shares during the period. Invesco Ltd. boosted its position in shares of PennyMac Financial Services by 18.3% in the 3rd quarter. Invesco Ltd. now owns 1,463,096 shares of the real estate investment trust's stock valued at $181,248,000 after purchasing an additional 226,581 shares during the period. Balyasny Asset Management L.P. boosted its position in PennyMac Financial Services by 145.1% during the 2nd quarter. Balyasny Asset Management L.P. now owns 286,123 shares of the real estate investment trust's stock worth $28,509,000 after acquiring an additional 169,395 shares during the period. Finally, Ameriprise Financial Inc. boosted its position in PennyMac Financial Services by 43.4% during the 2nd quarter. Ameriprise Financial Inc. now owns 400,788 shares of the real estate investment trust's stock worth $39,935,000 after acquiring an additional 121,382 shares during the period. Institutional investors and hedge funds own 57.87% of the company's stock.

About PennyMac Financial Services

PennyMac Financial Services, Inc NYSE: PFSI is a leading mortgage banking company based in Westlake Village, California. The firm operates through two primary business segments: Production and Mortgage Servicing Rights (MSR). In its Production segment, PennyMac originates residential mortgage loans through retail, wholesale and correspondent channels, focusing on both purchase and refinance transactions. The MSR segment involves the acquisition and servicing of mortgage loans, whereby the company earns fees for managing loan portfolios on behalf of investors.

Since its founding in 2008, PennyMac has grown through a combination of organic origination and strategic acquisition of servicing rights, positioning itself as one of the largest residential mortgage loan servicers in the United States.

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