PennyMac Financial Services (NYSE:PFSI) Sets New 12-Month Low - Time to Sell?

Key Points

• PennyMac Financial Services (NYSE:PFSI) hit a new 52-week low, trading as low as $80.14 after closing at $81.24, as investors reacted to weaker price action in the stock.
• Several analysts cut price targets on the company, though the stock still carries a consensus rating of "Hold" with an average target price of $122.75. Opinions remain mixed, with some firms maintaining buy/overweight ratings while Zacks downgraded it to "strong sell."
• The company recently reported mixed quarterly results, missing EPS and revenue estimates slightly, while also posting stronger year-over-year revenue growth. PennyMac also paid a quarterly dividend of $0.30 per share and saw notable insider selling by its CEO and CFO.

Shares of PennyMac Financial Services, Inc. (NYSE:PFSI - Get Free Report) reached a new 52-week low on Monday . The stock traded as low as $80.14 and last traded at $80.54, with a volume of 34398 shares traded. The stock had previously closed at $81.24.

Analyst Upgrades and Downgrades

Several research firms have recently weighed in on PFSI. Keefe, Bruyette & Woods lowered their price objective on PennyMac Financial Services from $115.00 to $108.00 and set an "outperform" rating for the company in a research report on Friday, May 8th. Barclays lowered their price objective on PennyMac Financial Services from $116.00 to $107.00 and set an "overweight" rating for the company in a research report on Monday, May 11th. Piper Sandler lowered their price objective on PennyMac Financial Services from $122.00 to $112.00 and set an "overweight" rating for the company in a research report on Wednesday, May 6th. Zacks Research lowered PennyMac Financial Services from a "hold" rating to a "strong sell" rating in a research report on Friday, May 8th. Finally, Wells Fargo & Company lowered their price objective on PennyMac Financial Services from $110.00 to $100.00 and set an "overweight" rating for the company in a research report on Wednesday, May 6th. Six equities research analysts have rated the stock with a Buy rating, two have issued a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat, the stock has an average rating of "Hold" and a consensus target price of $122.75.

PennyMac Financial Services Price Performance

The firm has a market capitalization of $4.12 billion, a P/E ratio of 8.44, a price-to-earnings-growth ratio of 0.53 and a beta of 1.44. The business has a 50-day moving average of $88.20 and a 200 day moving average of $107.15. 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 (NYSE:PFSI - Get Free Report) last issued its earnings results on Tuesday, May 5th. The real estate investment trust reported $2.19 EPS for the quarter, missing analysts' consensus estimates of $2.22 by ($0.03). The firm had revenue of $544.98 million during the quarter, compared to the consensus estimate of $546.17 million. PennyMac Financial Services had a net margin of 23.47% and a return on equity of 10.93%. The business's quarterly revenue was up 26.5% on a year-over-year basis. During the same period in the previous year, the firm earned $1.42 earnings per share. On average, sell-side analysts predict that PennyMac Financial Services, Inc. will post 10.68 earnings per share for the current fiscal year.

PennyMac Financial Services Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Thursday, May 28th. Shareholders of record on Monday, May 18th were paid a dividend of $0.30 per share. The ex-dividend date was Monday, May 18th. This represents a $1.20 dividend on an annualized basis and a yield of 1.5%. PennyMac Financial Services's payout ratio is 12.75%.

Insider Transactions at PennyMac Financial Services

In other PennyMac Financial Services news, CFO Daniel Stanley Perotti sold 2,925 shares of PennyMac Financial Services stock in a transaction dated Friday, May 15th. The stock was sold at an average price of $87.50, for a total transaction of $255,937.50. Following the completion of the transaction, the chief financial officer owned 210,625 shares in the company, valued at approximately $18,429,687.50. The trade was a 1.37% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO David Spector sold 10,000 shares of PennyMac Financial Services stock in a transaction dated Tuesday, May 12th. The shares were sold at an average price of $87.99, for a total value of $879,900.00. Following the transaction, the chief executive officer owned 60,604 shares of the company's stock, valued at $5,332,545.96. This trade represents a 14.16% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 22,925 shares of company stock valued at $2,064,138 in the last quarter. Company insiders own 15.80% of the company's stock.

Hedge Funds Weigh In On PennyMac Financial Services

Hedge funds and other institutional investors have recently modified their holdings of the business. Hudson Bay Capital Management LP purchased a new position in shares of PennyMac Financial Services in the 3rd quarter worth approximately $5,593,000. 140 Summer Partners LP bought a new stake in shares of PennyMac Financial Services in the 3rd quarter worth approximately $55,268,000. Picton Mahoney Asset Management raised its holdings in shares of PennyMac Financial Services by 554.1% in the 3rd quarter. Picton Mahoney Asset Management now owns 28,872 shares of the real estate investment trust's stock worth $3,576,000 after purchasing an additional 24,458 shares during the period. American Century Companies Inc. raised its holdings in shares of PennyMac Financial Services by 7.5% in the 3rd quarter. American Century Companies Inc. now owns 429,403 shares of the real estate investment trust's stock worth $53,195,000 after purchasing an additional 30,015 shares during the period. Finally, M&T Bank Corp bought a new stake in shares of PennyMac Financial Services in the 4th quarter worth approximately $5,095,000. Hedge funds and other institutional investors 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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