PennyMac Financial Services (NYSE:PFSI) Announces Quarterly Earnings Results

Key Points

• PennyMac Financial Services missed quarterly estimates: EPS was $1.39 versus the $2.25 consensus, while revenue reached $566 million, below expectations of $581.72 million.
• Shares traded near $85.92, with a 52-week range of $77.67 to $160.36. Analysts’ consensus rating is “Hold,” with an average price target of $114.62 after several target reductions and rating changes.
• The company maintained its quarterly dividend at $0.30 per share, equivalent to $1.20 annually and a 1.4% yield. Insiders sold shares recently, while institutional investors and hedge funds own 57.87% of the stock.

PennyMac Financial Services (NYSE:PFSI - Get Free Report) released its quarterly earnings data on Wednesday. The real estate investment trust reported $1.39 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $2.25 by ($0.86), FiscalAI reports. PennyMac Financial Services had a net margin of 23.47% and a return on equity of 10.93%. The business had revenue of $566.00 million during the quarter, compared to analyst estimates of $581.72 million.

PennyMac Financial Services Stock Performance

Shares of NYSE:PFSI traded up $0.22 on Wednesday, reaching $85.92. 618,225 shares of the company's stock were exchanged, compared to its average volume of 681,072. PennyMac Financial Services has a twelve month low of $77.67 and a twelve month high of $160.36. The company has a fifty day moving average of $83.52 and a 200-day moving average of $94.48. The company has a market capitalization of $4.46 billion, a price-to-earnings ratio of 9.13, a PEG ratio of 0.60 and a beta of 1.44. The company has a current ratio of 0.33, a quick ratio of 0.33 and a debt-to-equity ratio of 3.63.

PennyMac Financial Services Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Thursday, May 28th. Shareholders of record on Monday, May 18th were given a dividend of $0.30 per share. This represents a $1.20 dividend on an annualized basis and a dividend yield of 1.4%. The ex-dividend date was Monday, May 18th. PennyMac Financial Services's dividend payout ratio is presently 12.75%.

Analysts Set New Price Targets

Several brokerages have issued reports on PFSI. Piper Sandler cut their price target on PennyMac Financial Services from $112.00 to $106.00 and set an "overweight" rating for the company in a report on Thursday, July 2nd. Barclays downgraded shares of PennyMac Financial Services from an "overweight" rating to an "equal weight" rating and reduced their target price for the stock from $107.00 to $93.00 in a report on Tuesday, July 7th. Weiss Ratings downgraded shares of PennyMac Financial Services from a "hold (c-)" rating to a "sell (d+)" rating in a research report on Wednesday, May 6th. Stephens started coverage on PennyMac Financial Services in a research report on Friday, April 24th. They issued an "equal weight" rating and a $100.00 target price on the stock. Finally, BTIG Research lowered their target price on PennyMac Financial Services from $150.00 to $105.00 and set a "buy" rating on the stock in a research note on Tuesday, June 16th. Five investment analysts have rated the stock with a Buy rating, three have issued a Hold rating and two have given a Sell rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of "Hold" and an average target price of $114.62.

Insider Activity

In other PennyMac Financial Services news, CAO Gregory L. Hendry sold 2,177 shares of the firm's stock in a transaction on Wednesday, July 1st. The stock was sold at an average price of $86.89, for a total transaction of $189,159.53. Following the transaction, the chief accounting officer owned 48,968 shares in the company, valued at $4,254,829.52. This trade represents a 4.26% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Daniel Stanley Perotti sold 2,925 shares of PennyMac Financial Services stock in a transaction on Friday, May 15th. The shares were sold at an average price of $87.50, for a total value of $255,937.50. Following the completion of the transaction, the chief financial officer directly owned 210,625 shares of the company's stock, valued at $18,429,687.50. This represents a 1.37% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders sold 18,045 shares of company stock worth $1,565,470. Corporate insiders own 15.80% of the company's stock.

Institutional Trading of PennyMac Financial Services

Several large investors have recently modified their holdings of PFSI. Virtu Financial LLC bought a new stake in PennyMac Financial Services during the fourth quarter worth about $379,000. SummitTX Capital L.P. grew its stake in PennyMac Financial Services by 19.6% during the fourth quarter. SummitTX Capital L.P. now owns 2,795 shares of the real estate investment trust's stock worth $368,000 after buying an additional 459 shares in the last quarter. Cerity Partners LLC increased its holdings in PennyMac Financial Services by 7.3% in the 4th quarter. Cerity Partners LLC now owns 2,399 shares of the real estate investment trust's stock valued at $316,000 after buying an additional 164 shares during the period. Persistent Asset Partners Ltd bought a new position in PennyMac Financial Services in the 4th quarter valued at about $308,000. Finally, Meeder Advisory Services Inc. raised its position in shares of PennyMac Financial Services by 22.6% in the 4th quarter. Meeder Advisory Services Inc. now owns 2,160 shares of the real estate investment trust's stock valued at $285,000 after buying an additional 398 shares in the last quarter. 57.87% of the stock is owned by institutional investors and hedge funds.

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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