PennyMac Financial Services (NYSE:PFSI) Shares Gap Down After Earnings Miss

PennyMac Financial Services, Inc. (NYSE:PFSI) gapped down before the market opened on Friday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $149.70, but opened at $112.00. PennyMac Financial Services shares last traded at $97.3990, with a volume of 573,262 shares changing hands.

The real estate investment trust reported $1.97 EPS for the quarter, missing analysts’ consensus estimates of $3.23 by ($1.26). PennyMac Financial Services had a return on equity of 10.36% and a net margin of 24.48%.The firm had revenue of $538.01 million during the quarter, compared to analyst estimates of $639.81 million. During the same quarter in the prior year, the firm earned $1.95 EPS. The business’s quarterly revenue was up 14.4% compared to the same quarter last year.

PennyMac Financial Services Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Thursday, February 26th. Stockholders of record on Monday, February 16th will be given a $0.30 dividend. The ex-dividend date is Friday, February 13th. This represents a $1.20 annualized dividend and a dividend yield of 1.2%. PennyMac Financial Services’s dividend payout ratio (DPR) is presently 12.93%.

PennyMac Financial Services News Summary

Here are the key news stories impacting PennyMac Financial Services this week:

• Positive Sentiment: PFSI declared a quarterly cash dividend of $0.30/share (record Feb 16, payable Feb 26) — supports yield and income-minded holders. PennyMac Reports Q4 & Full‑Year 2025 Results
• Neutral Sentiment: Some brokers still rate PFSI “overweight”/”moderate buy” despite cutting price targets (Barclays: $158→$136; Wells Fargo: $150→$135), which signals confidence in recovery longer term even as near-term estimates are trimmed. Benzinga
• Neutral Sentiment: Company provided an earnings presentation and call transcript that investors should review for management commentary on margin outlook and mortgage margin drivers. Q4 Presentation / Press Release
• Negative Sentiment: PFSI missed Q4 EPS and revenue estimates (EPS $1.97 vs. consensus $3.23; revenue $538M vs. $640M consensus); management flagged margin pressure — the primary driver of the sharp selloff. Seeking Alpha: Shares Sink After Earnings Miss
• Negative Sentiment: Multiple law firms (BFA Law) launched securities‑fraud investigations following the post‑earnings share drop, which can increase legal risk, headline volatility and selling pressure. GlobeNewswire: BFA Law Investigation Alert BusinessWire: BFA Law Launches Investigation
• Negative Sentiment: Unusually large options activity: traders bought ~3,076 puts (≈566% above normal), signaling speculative or hedging bearish interest that can accelerate downward moves. (No external link)
• Negative Sentiment: Trading volume and volatility spiked on the selloff — heavy volume usually amplifies price moves and can create short‑term downside as liquidity is absorbed. Yahoo Finance: Q4 Miss & Stock Drop

Wall Street Analysts Forecast Growth

Several analysts recently weighed in on the stock. Wall Street Zen downgraded shares of PennyMac Financial Services from a “buy” rating to a “hold” rating in a research report on Sunday, January 18th. Weiss Ratings lowered shares of PennyMac Financial Services from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Tuesday, January 20th. Wells Fargo & Company dropped their target price on PennyMac Financial Services from $150.00 to $135.00 and set an “overweight” rating on the stock in a report on Friday. BTIG Research reaffirmed a “buy” rating on shares of PennyMac Financial Services in a research note on Friday. Finally, UBS Group increased their price objective on PennyMac Financial Services from $135.00 to $145.00 and gave the company a “neutral” rating in a research report on Friday, October 24th. Five equities research analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company’s stock. According to MarketBeat.com, PennyMac Financial Services presently has an average rating of “Moderate Buy” and a consensus price target of $143.71.

Insider Activity

In other news, Director Doug Jones sold 20,000 shares of the stock in a transaction on Tuesday, November 25th. The stock was sold at an average price of $132.63, for a total value of $2,652,600.00. Following the completion of the sale, the director owned 430,000 shares in the company, valued at $57,030,900. This represents a 4.44% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CAO Gregory L. Hendry sold 3,530 shares of PennyMac Financial Services stock in a transaction on Thursday, December 18th. The shares were sold at an average price of $131.64, for a total value of $464,689.20. Following the transaction, the chief accounting officer owned 48,633 shares in the company, valued at $6,402,048.12. This represents a 6.77% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 80,076 shares of company stock valued at $10,512,190 in the last 90 days. Company insiders own 15.80% of the company’s stock.

Institutional Trading of PennyMac Financial Services

A number of hedge funds have recently made changes to their positions in PFSI. 140 Summer Partners LP purchased a new position in PennyMac Financial Services during the third quarter valued at approximately $55,268,000. Norges Bank acquired a new stake in shares of PennyMac Financial Services during the 2nd quarter valued at $39,976,000. Goldentree Asset Management LP acquired a new stake in shares of PennyMac Financial Services during the 2nd quarter valued at $29,249,000. Two Sigma Investments LP grew its holdings in shares of PennyMac Financial Services by 1,148.7% during the 3rd quarter. Two Sigma Investments LP now owns 310,919 shares of the real estate investment trust’s stock valued at $38,517,000 after acquiring an additional 286,019 shares in the last quarter. Finally, Holocene Advisors LP grew its stake in shares of PennyMac Financial Services by 2,379.5% in the 3rd quarter. Holocene Advisors LP now owns 245,268 shares of the real estate investment trust’s stock valued at $30,384,000 after buying an additional 235,376 shares in the last quarter. 57.87% of the stock is owned by hedge funds and other institutional investors.

PennyMac Financial Services Stock Performance

The firm’s 50 day moving average is $137.44 and its 200-day moving average is $123.17. The company has a debt-to-equity ratio of 3.01, a quick ratio of 0.36 and a current ratio of 0.36. The firm has a market cap of $5.19 billion, a price-to-earnings ratio of 10.74, a price-to-earnings-growth ratio of 0.68 and a beta of 1.57.

PennyMac Financial Services Company Profile

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.