Mortgage banking company PennyMac Financial Services (NYSE: PFSI) will be reporting earnings this Thursday after market close. Here’s what to look for.
PennyMac Financial Services met analysts’ revenue expectations last quarter, reporting revenues of $565.8 million, up 5.4% year on year. It was a softer quarter for the company, with a significant miss of analysts’ net interest income estimates and a significant miss of analysts’ EPS estimates.
Is PennyMac Financial Services a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting PennyMac Financial Services’s revenue to decline 17.3% year on year, a reversal from the 12.3% increase it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. PennyMac Financial Services has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at PennyMac Financial Services’s peers in the thrifts & mortgage finance segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Ladder Capital delivered year-on-year revenue growth of 107%, beating analysts’ expectations by 53.9%, and WaFd Bank reported revenues up 17.6%, topping estimates by 8.3%. Ladder Capital’s stock price was unchanged after the resultswhile WaFd Bank was down 1%.
Read our full analysis of Ladder Capital’s results here and WaFd Bank’s results here.
Investors in the thrifts & mortgage finance segment have had steady hands going into earnings, with share prices up 1.5% on average over the last month. PennyMac Financial Services’s stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $82.29 (compared to the current share price of $64.15).
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