PFSI

Wall Street expects a year-over-year decline in earnings on lower revenues when PennyMac Mortgage (PMT) reports results for the quarter ended September 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 29. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This specialty finance company is expected to post quarterly earnings of $0.30 per share in its upcoming report, which represents a year-over-year change of -45.5%. Revenues are expected to be $92.37 million, down 6.9% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 3.69% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For PennyMac Mortgage, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -7.99%. On the other hand, the stock currently carries a Zacks Rank of #5. So, this combination makes it difficult to conclusively predict that PennyMac Mortgage will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that PennyMac Mortgage would post earnings of $0.3 per share when it actually produced earnings of $0.23, delivering a surprise of -23.33%. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. PennyMac Mortgage doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PennyMac Mortgage Investment Trust (PMT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Wall Street expects a year-over-year decline in earnings on lower revenues when PennyMac Financial (PFSI) reports results for the quarter ended September 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 29. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This mortgage banking and investment management company is expected to post quarterly earnings of $1.30 per share in its upcoming report, which represents a year-over-year change of -61.4%. Revenues are expected to be $504.28 million, down 20.3% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 7.54% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For PennyMac, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%. On the other hand, the stock currently carries a Zacks Rank of #5. So, this combination makes it difficult to conclusively predict that PennyMac will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that PennyMac would post earnings of $2.08 per share when it actually produced earnings of $1.39, delivering a surprise of -33.17%. Over the last four quarters, the company has beaten consensus EPS estimates just once. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. PennyMac doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PennyMac Financial Services, Inc. (PFSI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Looking back on thrifts & mortgage finance stocks' Q2 earnings, we examine this quarter's best and worst performers, including PennyMac Financial Services (NYSE:PFSI) and its peers. Thrifts & Mortgage Finance institutions operate by accepting deposits and extending loans primarily for residential mortgages, earning revenue through interest rate spreads (difference between lending rates and borrowing costs) and origination fees. The industry benefits from demographic tailwinds as millennials enter prime homebuying age, technological advancements streamlining the loan approval process, and potential interest rate stabilization improving affordability. However, significant headwinds include net interest margin compression during rate volatility, increased competition from fintech disruptors offering digital-first experiences, mounting regulatory compliance costs, and potential housing market corrections that could impact loan portfolios and default rates. The 12 thrifts & mortgage finance stocks we track reported a slower Q2. As a group, revenues missed analysts' consensus estimates by 3.4% while next quarter's revenue guidance was 10.1% below. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 19.1% since the latest earnings results. Founded during the 2008 financial crisis to help address the mortgage market meltdown, PennyMac Financial Services (NYSE:PFSI) is a specialty financial services company that originates, services, and manages investments related to residential mortgage loans in the United States. PennyMac Financial Services reported revenues of $565.8 million, up 5.4% year on year. This print was in line with analysts' expectations, but overall, 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. "PennyMac Financial generated a 2% annualized return on equity and a 7% annualized adjusted return on equity1 in the second quarter," said Chairman and CEO David Spector. The market seems disappointed with the results as the stock is down 28.7% since reporting and currently trades at $61.34. Read our full report on PennyMac Financial Services here, it's free. With roots dating back to 2003 and a focus on the stability of multifamily housing, Arbor Realty Trust (NYSE:ABR) is a specialized lender that provides financing solutions for multifamily and commercial real estate while also originating and servicing government-backed mortgage loans. Arbor Realty Trust reported revenues of $115.9 million, down 11.1% year on year, outperforming analysts' expectations by 7.1%. The business had a stunning quarter with a beat of analysts' EPS estimates and a solid beat of analysts' net interest income estimates. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 35% since reporting. It currently trades at $3.12. Is now the time to buy Arbor Realty Trust? Access our full analysis of the earnings results here, it's free. Born in Detroit during the 1980s and evolving into a tech-driven financial powerhouse, Rocket Companies (NYSE:RKT) is a fintech company that provides digital mortgage lending, real estate services, and personal finance solutions through its technology platform. Rocket Companies reported revenues of $2.76 billion, up 92.9% year on year, falling short of analysts' expectations by 2.7%. It was a disappointing quarter as it posted EPS in line with analysts' estimates. As expected, the stock is down 10.9% since the results and currently trades at $11.79. Read our full analysis of Rocket Companies's results here. Founded in 1917 and rebranded from Washington Federal in 2023, WaFd (NASDAQ:WAFD) is a bank holding company that provides lending, deposit services, and insurance through its Washington Federal Bank subsidiary across eight western states. WaFd Bank reported revenues of $202 million, up 8.4% year on year. This print surpassed analysts' expectations by 1.2%. Zooming out, it was a mixed quarter as it also recorded a narrow beat of analysts' net interest income estimates but EPS in line with analysts' estimates. The stock is down 24% since reporting and currently trades at $29.87. Read our full, actionable report on WaFd Bank here, it's free. Operating as a specialized real estate investment trust (REIT) with roots dating back to 2012, Franklin BSP Realty Trust (NYSE:FBRT) originates and manages a diversified portfolio of commercial real estate debt investments secured by properties in the United States and abroad. Franklin BSP Realty Trust reported revenues of $58.06 million, up 14.2% year on year. This result missed analysts' expectations by 28.3%. All in all, it was a mixed quarter for the company. Franklin BSP Realty Trust had the weakest performance against analyst estimates among its peers. The stock is down 16.8% since reporting and currently trades at $6.27. Read our full, actionable report on Franklin BSP Realty Trust here, it's free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market's biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market's primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market's dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

WESTLAKE VILLAGE, Calif., September 02, 2026--(BUSINESS WIRE)--PennyMac Mortgage Investment Trust (NYSE: PMT) announced today that its Board of Trustees declared a cash dividend of $0.40 per common share of beneficial interest for the third quarter of 2026. This dividend will be paid on October 23, 2026, to common shareholders of record as of October 8, 2026. About PennyMac Mortgage Investment Trust PennyMac Mortgage Investment Trust is a mortgage real estate investment trust (REIT) that invests primarily in residential mortgage loans and mortgage-related assets. PMT is externally managed by PNMAC Capital Management, LLC, a wholly-owned subsidiary of PennyMac Financial Services, Inc. (NYSE: PFSI). Additional information about PennyMac Mortgage Investment Trust is available at pmt.pennymac.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management’s beliefs, estimates, projections and assumptions with respect to, among other things, PennyMac Mortgage Investment Trust’s (the "Company") financial results, future operations, business plans and investment strategies, as well as industry and market conditions, all of which are subject to change. Words like "believe," "expect," "anticipate," "promise," "plan," and other expressions or words of similar meanings, as well as future or conditional verbs such as "will," "would," "should," "could," or "may" are generally intended to identify forward-looking statements. Actual results and operations for any future period may vary materially from those projected herein and from past results discussed herein. Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to: interest rate changes; changes in macroeconomic, consumer and real estate market conditions; changes in housing prices, housing sales and real estate values; rising homeownership costs negatively impacting housing affordability; compliance with changing federal, state and local laws and regulations that govern the Company’s business; the general economy or the real estate finance and real estate markets; events or circumstances which undermine confidence in the financial and housing markets or otherwise have a broad impact on financial and housing markets; the degree and nature of the Company’s competition; the availability of, and level of competition for, attractive risk adjusted investment opportunities in mortgage loans and mortgage related assets that satisfy the Company’s investment objectives; the concentration of credit risks to which the Company is exposed; the Company’s dependence on and potential conflicts with its manager, servicer and their affiliates; the Company’s ability to mitigate cybersecurity risks, cyber incidents and technology disruptions; the development of artificial intelligence; the availability, terms and deployment of short term and long term capital; the adequacy of the Company’s cash reserves and working capital; the Company’s ability to maintain the desired relationship between its financing and the interest rates and maturities of its assets; the timing and amount of cash flows, if any, from the Company’s investments; the Company’s engagement in private loan securitizations; the Company’s substantial amount of indebtedness; the performance, financial condition and liquidity of borrowers; the Company’s exposure to risks of loss and disruptions in operations from severe weather events, man-made or other natural conditions, including climate change and pandemics; the ability of the Company’s servicer, which also provides the Company with fulfillment services, to approve and monitor correspondent sellers and underwrite loans to investor standards; incomplete or inaccurate information or documentation provided by customers or counterparties, or adverse changes in the financial condition of the Company’s customers and counterparties; the Company’s indemnification and repurchase obligations in connection with mortgage loans it purchases and later sells or securitizes; the quality and enforceability of the collateral documentation evidencing the Company’s ownership and rights in the assets in which it invests; increased rates of delinquency, defaults and forbearances and/or decreased recovery rates on the Company’s investments; the performance of mortgage loans underlying mortgage backed securities or other investments in which the Company retains credit risk; the Company’s ability to foreclose on its investments in a timely manner or at all; increased prepayments of the mortgages and other loans underlying the Company’s mortgage backed securities or relating to the Company’s mortgage servicing rights and other investments; risks associated with the discontinuation of LIBOR; the degree to which the Company’s hedging strategies may or may not protect it from interest rate volatility; the accuracy or changes in the estimates the Company makes about uncertainties, contingencies and asset and liability valuations; the Company’s ability to maintain appropriate internal control over financial reporting; the Company’s ability to detect misconduct and fraud; developments in the secondary markets for the Company’s mortgage loan products; legislative and regulatory changes that impact the mortgage loan industry or housing market; regulatory or other changes that impact government agencies or government sponsored entities, or such changes that increase the cost of doing business with such agencies or entities; federal and state mortgage regulations and enforcement; changes in government support of homeownership and affordability programs; changes in the Company’s investment objectives or investment or operational strategies; limitations imposed on the Company’s business and its ability to satisfy complex rules for it to qualify as a REIT for U.S. federal income tax purposes and qualify for an exclusion from the Investment Company Act of 1940 and the ability of certain of the Company’s subsidiaries to qualify as REITs or as taxable REIT subsidiaries for U.S. federal income tax purposes; changes in governmental regulations, accounting treatment, tax rates and similar matters; the Company’s ability to make distributions to its shareholders in the future; the Company’s failure to deal appropriately with issues that may give rise to reputational risk; and the Company’s organizational structure and certain requirements in its charter documents. You should not place undue reliance on any forward-looking statement and should consider all of the uncertainties and risks described above, as well as those more fully discussed in reports and other documents filed by the Company with the Securities and Exchange Commission from time to time. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, and the statements made in this press release are current as of the date of this release only. View source version on businesswire.com: https://www.businesswire.com/news/home/20260901259064/en/ Contacts Media Kristyn [email protected] 805.395.9943 Investors Isaac [email protected] 818.224.7028

Rocket Companies, Inc. RKT reported second-quarter 2026 adjusted earnings of 16 cents per share, matching the Zacks Consensus Estimate. The bottom line jumped 200% from the year-ago quarter.Adjusted revenues of $2.76 billion missed the consensus mark by 2% but increased 92.9% from the prior-year quarter. Shares of Rocket lost more than 2.5% during after-hours trading.Results reflected record purchase and refinance market share despite a difficult housing environment. Total net rate lock volume reached $47 billion. Rocket generated total net revenues of $2.78 billion, up 91.9% year over year. Net gain on sale of loans was $1.21 billion, while net loan servicing income was $450 million. Interest income and other income were $583 million and $546 million, respectively. Total closed mortgage loan origination volume was $49.1 billion. Excluding correspondent activity, closed volume totaled $39.2 billion, while gain on sale margin was 3.11%.Purchase market share rose to a record 6.2% from 5.5% in the fourth quarter of 2025. Likewise, refinance share climbed to 14.3% from 12.2%.Rocket ended the quarter with a $2 trillion servicing portfolio covering 9.1 million loans. Existing servicing clients accounted for 57% of refinance closed volume, up from 54% in the first quarter, highlighting the company's ability to generate repeat mortgage business from its servicing base. Beginning in the second quarter of 2026, Rocket reports Mortgage as its sole reportable segment, with the remaining businesses grouped under All Other. The Mortgage segment generated total revenues of $2.27 billion, up 79.2% from $1.27 billion a year ago. Adjusted revenues increased 80.2% year over year to $2.25 billion. Contribution margin surged 160.9% to $1.17 billion, reflecting stronger profitability across Rocket's mortgage origination, servicing, title, closing and appraisal operations. All Other businesses, primarily comprising Redfin's real estate services, Rocket Money and Rocket Loans, recorded revenues of $510 million, up 180.2% from the prior-year quarter. Contribution margin climbed 158.6% to $181 million. Total expenses climbed 75.4% year over year to $2.50 billion. Salaries, commissions and team member benefits were $1.05 billion, while general and administrative costs totaled $568 million. Marketing and advertising expenses were $291 million. GAAP net income was $229 million compared with $34 million a year earlier. Adjusted EBITDA surged to $766 million from $172 million, with an adjusted EBITDA margin of 28%, up from 26% in the first quarter. Rocket continued deploying artificial intelligence (AI) across origination and servicing. Its loan officers are handling nearly 40% more clients than a year ago while producing double-digit improvements in conversion, according to management. The company's AI Voice platform handled more than 1 million inbound servicing calls within three months of launch. More than half of those calls otherwise would have required servicing-team assistance, while task resolution was nearly 25% faster than traditional interactive voice response methods. For the third quarter of 2026, Rocket expects adjusted revenues between $2.5 billion and $2.7 billion. Management expects the mortgage market to be smaller sequentially as elevated rates continue to pressure affordability, purchase demand and refinancing activity.At the midpoint of the revenue outlook, expenses are projected at roughly $2.35 billion. Rocket also remains on track to realize $400 million of annualized Mr. Cooper expense synergies by year-end and now sees another $100 million of annualized savings above that target during the first half of 2027. Strategic acquisitions, including Redfin and Mr. Cooper, should continue to support RKT’s revenue base and expand margins as integration synergies ramp. At the same time, the company is leaning into AI initiatives such as agentic prospecting and digital pre-approvals, which are boosting conversion and adding incremental monthly volume.The setup is not without risk. Expenses remain elevated, and successful execution will depend on smoothly integrating Redfin and Mr. Cooper while maintaining service levels. Housing-market volatility and regulatory pressures also remain important factors influencing results. Rocket Companies, Inc. price-consensus-eps-surprise-chart | Rocket Companies, Inc. Quote Currently, RKT carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. LendingTree, Inc. TREE reported second-quarter 2026 adjusted net income per share of $1.27, which missed the Zacks Consensus Estimate of $1.46. The figure compares favorably with $1.13 reported in the prior-year quarter.LendingTree’s results were adversely impacted by a decline in Consumer segment revenues and higher total costs. However, growth in revenues, along with strong Insurance segment performance, supported the results to some extent.PennyMac Financial PFSI came out with second-quarter 2026 earnings of $1.39 per share, which missed the Zacks Consensus Estimate of $2.08 per share by a considerable margin. This compares to earnings of $1.02 per share a year ago.Results were hurt by higher expenses. On the other hand, an increase in revenues and solid liquidity position acted as tailwinds for PennyMac. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Rocket Companies, Inc. (RKT) : Free Stock Analysis Report LendingTree, Inc. (TREE) : Free Stock Analysis Report PennyMac Financial Services, Inc. (PFSI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Net Income: $22 million, or $0.41 earnings per diluted share, representing a 2% annualized return on equity. Adjusted Net Income: $74 million, or $1.39 adjusted earnings per share, representing a 7% annualized adjusted return on equity. Production Segment Pre-Tax Income: $38 million, down from $134 million in the prior quarter. Total Acquisition and Origination Volumes: $35 billion in unpaid principal balance (UPB), down 6% from the prior quarter. Correspondent Margins: 29 basis points, up from 28 basis points in the prior quarter. Broker Direct Margins: 104 basis points, up from 99 basis points in the prior quarter. Consumer Direct Margins: 317 basis points, up from 267 basis points in the prior quarter. Servicing Segment Pre-Tax Income: $22 million; excluding valuation-related changes, pre-tax income was $99 million or 5.5 basis points of average servicing portfolio UPB. Servicing Portfolio UPB: $731 billion, up 1% from the end of the prior quarter. Servicing Operating Expenses: 4.2 basis points of average servicing portfolio UPB, or $76 million. Conventional First Lien Refinance Recapture Rate: 29%, up 7 percentage points from the prior quarter. Government First Lien Refinance Recapture Rate: 59%, up 9 percentage points from the prior quarter. Annualized Cost Savings from Realignments: Approximately $60 million, expected to begin in the third quarter. Total Debt to Equity: 3.6 times, down from 4 times at the end of the prior quarter. Total Liquidity: $4 billion. Warning! GuruFocus has detected 7 Warning Signs with PFSI. Is PFSI fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. PennyMac Financial Services Inc (NYSE:PFSI) reported strong underlying operational momentum with a meaningful increase in recapture rates, with conventional first lien refinance recapture rates up 7 percentage points to 29% and government recapture rates up 9 percentage points to 59%. The company is making excellent progress on its technology transformation, including the launch of a proprietary natural language virtual agent (NLVA) and the deployment of AI agents that have already reduced processing costs and cut cycle times by 40-80%. PFSI is executing a $60 million annualized cost reduction plan through targeted staffing adjustments and production footprint reductions, which will begin to benefit results in the third quarter. The servicing segment continues to demonstrate low-cost leadership, with direct servicing expense per loan of $89 in 2025, well below the industry average of $185, and operating expenses of just 4.2 basis points of average servicing UPB in Q2. The company has a clear path back to mid-teens ROEs, driven by structural operating leverage from AI automation, the upcoming onboarding of the Cenlar subservicing portfolio, and continued growth in recapture rates. PennyMac Financial Services Inc (NYSE:PFSI) reported net income of only $22 million in Q2 2026, or $0.41 per diluted share, representing a weak 2% annualized return on equity, which fell short of expectations due to rising interest rates and declining origination demand. GAAP results were significantly impacted by $77 million in non-cash MSR valuation headwinds net of hedges and costs, driven by elevated interest rate volatility and high hedge costs of $52 million. The company's near-term outlook is subdued, with adjusted ROEs expected to remain in the high single-digits through 2026 due to a smaller projected origination market from higher interest rates. Production segment pre-tax income declined sharply to $38 million from $134 million in the prior quarter, with consumer direct channel revenue down $36 million as higher rates reduced refinance demand. Correspondent lending volumes are under pressure due to aggressive competition from the GSEs and other market participants, and the company is maintaining pricing discipline which may limit market share in the near term. Here are the key highlights from the PennyMac Financial Services Inc (NYSE:PFSI) Q2 2026 earnings call. Q: Can you talk about how you're balancing the cost reductions you mentioned with being prepared if rates reverse and you need capacity, like you were caught short last year? A: (David Spector, Chairman & CEO) We are being disciplined. The technology work on our new loan origination platform is creating excess capacity, which allows us to make a meaningful $60 million annual cost reduction. We are confident in the technology, so the extra capacity added last year is no longer needed. Our continued growth in recapture rates also positions us well for a normalized market. Q: As you laid out the path back to mid-teens ROEs, does that require lower rates, or can you get there in the current environment? A: (David Spector, Chairman & CEO) At current high rate levels, the path is more weighted to an exit of 2027. If rates decline, that would accelerate the timeline. The path is driven by cost realignments, technology-driven operating leverage, and operational momentum in recapture, not just a rate decline. Q: How much of the drive to a $55 cost to service is coming from added operating efficiency versus just scale, and how does the Senlar acquisition help? A: (David Spector, Chairman & CEO) The drive to $55 is primarily about cutting actual expenses through AI agents and workflow automation, not just growing the denominator with Senlar. While the scale from Senlar will accelerate the process, the core focus is on deeper servicing integrations and building additional agents to reduce the cost structure. Q: You indicated hedge costs have come down since the end of the quarter. How is the hedge performing quarter-to-date? A: (Daniel Perotti, CFO) The hedge has been more stable in Q3. We adjusted our practices to minimize the impact of volatility on hedge costs. Despite a recent uptick in volatility, we have been able to maintain a lower run rate of hedge costs, tracking much better than Q2. Q: On the ROE outlook, how should we frame 2027? Previously you expected low-to-mid teens by end of '26, but that's pushed out. A: (David Spector, Chairman & CEO) We see 2026 ending in the high single-digits to low double-digits. The step-up to mid-teens will occur throughout 2027, driven by key initiatives like transitioning the broker direct channel onto Vesta, achieving efficiencies from the Senlar portfolio, and continuing to drive down origination costs in consumer direct. Q: On the broker channel, you discussed elevated competition. Is the target of 10% market share by end of '26 still attainable? A: (David Spector, Chairman & CEO) We want to grow share profitably and are being disciplined. Given the work to get brokers onto Vesta, we don't see hitting 10% by end of '26. However, we believe brokers will be very enthusiastic about the platform when it launches in mid-2027. Q: Is the target of high-teens to low-20s ROE still the normalized target for the business, and can it be higher with all the tech investments? A: (David Spector, Chairman & CEO) Yes, that is a guiding principle. We are investing in technology for the long-term to create a consistently high-returning company. The combination of our production and servicing technology is unique, and we are the low-cost servicer by a meaningful amount. We believe we are one of the few winners that can emerge from this cycle. Q: Your volume in the correspondent channel declined. Can you discuss the competitive dynamics and if you expect share to stay at this level? A: (David Spector, Chairman & CEO) We are seeing the GSEs be very aggressive through the cash window. We are maintaining pricing discipline and preserving dry powder. While some participants may be irrational at times, we are still the leaders in the space and will continue to be. Q: Can you achieve the upward slope in ROE if the 10-year yield goes up a bit, or does it require a decline? A: (David Spector, Chairman & CEO) Yes, I believe so. The $60 million cost reduction, additional efficiencies from Vesta, growing share profitably in broker direct, and a meaningful decline in tech spend are all rate-independent drivers. The Senlar transaction also provides capital-light fee growth, which is not rate-dependent. Q: Can you translate the goal of moving from 25% to 80% workflow automation into expense savings beyond the near-term 20% target? A: (David Spector, Chairman & CEO) The first 25% is low-hanging fruit, giving a 25-30% expense reduction. The cost to originate should come down by more than 50% overall. We will have a better sense of the exact number (60% or 65%) in the coming quarters. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This Stock Could Rally Following a Bottom in Mortgage Markets PennyMac Financial Services (NYSE:PFSI) reported second-quarter net income of $22 million, or $0.41 per diluted share, as interest-rate volatility produced non-cash mortgage servicing rights valuation headwinds and reduced mortgage origination demand. Adjusted net income was $74 million, or $1.39 per share, representing a 7% annualized adjusted return on equity, compared with a 2% annualized return on equity on a GAAP basis. Chairman and Chief Executive Officer David Spector said the company’s operational execution remained solid, but results fell short of expectations as rates increased during the quarter. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? The difference between GAAP and adjusted earnings included $77 million of fair-value declines on mortgage servicing rights, net of hedges and costs, according to Chief Financial Officer Dan Perotti. The adjusted calculation also reflected a $9 million valuation gain related to PennyMac’s minority interest in Vesta and $1 million of expenses associated with the planned acquisition of Cenlar’s subservicing business. The board declared a quarterly common-stock dividend of $0.30 per share. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now PennyMac said it took targeted actions in July to reduce its production footprint and staffing levels in response to a smaller projected origination market. The moves are expected to generate approximately $60 million in annualized cost savings, with benefits beginning in the third quarter. Spector said technology investments in artificial intelligence, automation and the company’s loan origination platform are intended to enable expense reductions without reducing capacity when mortgage demand recovers. PennyMac expects adjusted returns on equity to remain in the high single digits through 2026, with a path to mid-teens returns by the end of 2027 at current rate levels. → 3 Value ETFs to Consider as Growth Stocks Lag Behind “If rates were to decline, that would accelerate just getting there faster,” Spector said during the question-and-answer session. The company continues to view high-teens to low-20s returns on equity as its longer-term operating objective. Management said lower servicing costs, declining technology expenses, greater automation, growth in direct lending channels and the Cenlar transaction are among the expected drivers of higher returns. PennyMac’s production segment generated pre-tax income of $38 million, down from $134 million in the first quarter and $58 million a year earlier. Total acquisition and origination volume was $35 billion in unpaid principal balance, down 6% sequentially and 8% from the second quarter of 2025. Of that total, $32 billion was originated for PennyMac’s own account and $3 billion was fee-based fulfillment activity for PennyMac Mortgage Investment Trust. Correspondent lending revenue declined $9 million from the first quarter. Correspondent margins rose to 29 basis points from 28 basis points, aided by a greater mix of government loans. Broker Direct revenue declined $3 million sequentially, while fallout-adjusted lock volume fell 8% from the prior quarter but increased 21% from a year earlier. Margins rose to 104 basis points from 99 basis points. Non-QM locks in the broker channel more than tripled sequentially to $515 million in unpaid principal balance. Consumer Direct revenue fell $36 million from the first quarter as higher rates reduced refinance demand. Fallout-adjusted lock volumes declined 32%, while margins increased to 317 basis points from 267 basis points, reflecting greater closed-end second-lien production. Perotti said post-lock impacts across channels resulted in a $23 million pre-tax loss, compared with $13 million of pre-tax income in the prior quarter. The change was attributed to adverse market-price changes on specialized pools and other cross-channel effects. Spector said PennyMac remained disciplined on correspondent pricing amid competition, including from government-sponsored enterprise cash windows. He said the company does not expect to reach a previously discussed 10% broker-channel market share target by the end of 2026, as it prioritizes profitable growth. PennyMac ended the quarter with a servicing portfolio of $731 billion in unpaid principal balance, up 1% from the first quarter and 4% from a year earlier. The servicing segment reported pre-tax income of $22 million. Excluding valuation-related changes, pre-tax income was $99 million, or 5.5 basis points of average servicing portfolio unpaid principal balance, compared with $57 million, or 3.1 basis points, in the prior quarter. Average custodial deposit balances increased 7% from seasonal lows, contributing a $14 million increase in earnings on custodial balances and deposits. Servicing operating expenses were $76 million, or 4.2 basis points of average servicing portfolio unpaid principal balance. The company said conventional first-lien refinance recapture increased seven percentage points from the prior quarter to 29%, while government first-lien refinance recapture increased nine percentage points to 59%. As of June 30, PennyMac serviced $343 billion of loans with note rates no higher than 5%, including more than half with note rates no higher than 6%. Spector said PennyMac is using automation and AI tools to improve customer engagement, reduce loan cycle times and increase recapture. The company has standardized 150 origination tasks, with approximately 25% currently handled through automated logic or AI agents. It is targeting 80% automation by the end of 2027 and said its cost to originate a loan should ultimately decline by more than 50%. Mortgage servicing rights increased in fair value by $110 million during the quarter, including a $96 million increase tied to interest-rate changes. Hedge fair-value losses, including principal-only bond accretion changes, were $135 million, while hedge costs rose to $52 million from $14 million in the first quarter amid elevated option pricing and rate volatility. Perotti said hedge costs have since moderated to the mid-single-digit millions of dollars and that the company’s hedge ratio remains near 100% to manage prepayment risk and protect book value. PennyMac expects its acquisition of Cenlar’s subservicing portfolio to close in the fourth quarter. Management said the transaction is expected to add capital-light fee income and create operating leverage as Cenlar clients transition onto PennyMac’s servicing platform. The company also said the transaction could create opportunities for ancillary title and appraisal offerings, technology solutions and other services for Cenlar clients. At quarter-end, PennyMac reported total debt-to-equity of 3.6 times, down from 4.0 times in the prior quarter, and $4 billion of total liquidity. 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. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "PennyMac Financial Services Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

PennyMac Financial (PFSI) came out with quarterly earnings of $1.39 per share, missing the Zacks Consensus Estimate of $2.08 per share. This compares to earnings of $1.02 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -33.17%. A quarter ago, it was expected that this mortgage banking and investment management company would post earnings of $2.22 per share when it actually produced earnings of $2.19, delivering a surprise of -1.35%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. PennyMac, which belongs to the Zacks Financial - Mortgage & Related Services industry, posted revenues of $497 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 7.18%. This compares to year-ago revenues of $444.73 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. PennyMac shares have lost about 35% since the beginning of the year versus the S&P 500's gain of 8.5%. While PennyMac has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for PennyMac was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.49 on $590.97 million in revenues for the coming quarter and $9.77 on $2.29 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Mortgage & Related Services is currently in the bottom 15% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. UWM Holdings Corporation (UWMC), another stock in the same industry, has yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of -43.8%. The consensus EPS estimate for the quarter has been revised 20% lower over the last 30 days to the current level. UWM Holdings Corporation's revenues are expected to be $871.62 million, up 14.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PennyMac Financial Services, Inc. (PFSI) : Free Stock Analysis Report UWM Holdings Corporation (UWMC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research