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PennyMac (PFSI) to Report Q3 Earnings: What's in the Offing?

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Zacks Equity Research
·3 min read
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PennyMac Financial Services, Inc. PFSI is scheduled to report third-quarter 2020 results on Nov 5 after the bell. The company’s revenues and earnings are projected to reflect year-over-year increases.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results reflected growth in revenues and higher expenses.

The company has an impressive earnings surprise history. Its earnings surpassed estimates in all of the trailing four quarters, the average beat being 26.23%.

Further, the bank’s activities during the third quarter were adequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate of $5.92 for earnings moved up 11.5%, over the last 30 days. The figure indicates a year-over-year increase of a whopping 292.1%.

 

PennyMac Financial Services, Inc. Price and EPS Surprise

PennyMac Financial Services, Inc. Price and EPS Surprise
PennyMac Financial Services, Inc. Price and EPS Surprise

PennyMac Financial Services, Inc. price-eps-surprise | PennyMac Financial Services, Inc. Quote

Key Factors

PennyMac’s top line is likely to have benefited from increase in mortgage loan originations and refinancing activities during the third quarter on lower mortgage rates.

However, the company’s other investments portfolio’s interest income might have been affected due to relatively lower interest rates in the quarter to be reported. The Zacks Consensus Estimate for quarterly sales of $1.07 billion reflects a 145.5% surge from the year-ago period.

Moreover, as salaries and benefit costs continue to rise, overall expenses are expected to have flared up in the soon-to-be-reported quarter. Also, PennyMac’s efforts to expand into new markets and products might have inflated expenses.

Among other finance stocks, LendingTree, Inc. TREE, Ellington Financial LLC EFC and Main Street Capital Corporation MAIN are slated to release results on Nov 5.

Here is what our quantitative model predicts:

PennyMac has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for PennyMac is +4.39%.

Zacks Rank: PennyMac currently sports a Zacks Rank of 1 (Strong Buy), which increases the predictive power of ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.

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LendingTree, Inc. (TREE) : Free Stock Analysis Report
 
Main Street Capital Corporation (MAIN) : Free Stock Analysis Report
 
Ellington Financial LLC (EFC) : Free Stock Analysis Report
 
PennyMac Financial Services, Inc. (PFSI) : Free Stock Analysis Report
 
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Zacks Investment Research