Stock fact sheet · data as of
PennyMac Financial Services, Inc. (PFSI): fair value, margin of safety and Wheel Score
Financial Services · Financial - Mortgages · United States · High Growth
Is PFSI undervalued?
At 57.75 (close of 16 Oct 2026), PFSI trades 70% below the GLS average fair value of 193.74. That average comes from 7 models run on the latest filings, and 5 of them land above the current price. Margins of safety over 30% are the exception rather than the rule across the ~7,400 stocks we value each night, so the number earns PennyMac Financial Services, Inc. the full Value points in the Wheel Score - and a closer look at what the market is pricing in.
The 7 models disagree widely: DDM gives 17.66 while GLS Growth gives 462.56. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files PFSI under High Growth: revenue and earnings growing fast enough that the growth-based models carry the valuation.
Nine valuation models for PFSI
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 51.80 | -10% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 119.15 | +106% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 432.19 | +648% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 188.89 | +227% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 462.56 | +701% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | - | - | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10%; no value tonight |
| Payback Time | - | - | Eight years of compounded free cash flow: the price at which the business pays for itself; no value tonight |
| DDM | 17.66 | -69% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 83.95 | +45% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -468.72 | -912% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 81.00 | +40% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Financial health is weak: PFSI passes 4 of the nine Piotroski tests. Our screens drop the stock at the health rule; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is low at 3.1 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.
Returns on capital are thin or negative - ROIC 1.8%, ROE 11.6%, ROA 1.7% - with debt at 5.35 times equity and negative free cash flow. Debt of 5.35 times equity is on the high side for the sector and is worth checking against the cash flow before treating the stock as a long-term hold.
The dividend yield is 2.08% at a payout ratio of 16%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold. Revenue comes mainly from Mortgage banking Production 71%, Mortgage banking Servicing 29% (quarter Q2 FY2026).
Institutional ownership scores 8/10, insider activity 1/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 4 / 9 | ROIC | 1.8% |
|---|---|---|---|
| GLS Moat | 3.1 / 10 | ROE | 11.6% |
| Debt / equity | 5.35 | ROA | 1.7% |
| Free-cash-flow yield | -51.7% | Payout ratio | 16% |
| Institutions | 8 / 10 | Insiders · Congress | 1 · 5 / 10 |
Wheel Score 73: Good
PFSI scores 73 out of 100 on the Wheel Score (Good band, 65-79). The score blends the margin of safety (Value, 25/25), Piotroski health (9/20), the GLS moat (5/15), the option premium on offer (20/20) and how easily the stock trades (15/20). Moat (5/15) is the part holding the score back.
Implied volatility is 52% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. Chain open interest is 29,066 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 800k shares a day on a market cap of $3.0B, with a beta of 1.45 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 15 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 25 / 25 | 70% margin of safety | |
| Health | 9 / 20 | Piotroski 4/9 | |
| Moat | 5 / 15 | moat 3.1/10 | |
| Premium | 20 / 20 | implied volatility 52% | |
| Stability | 15 / 20 | 800k shares/day, $3.0B cap, beta 1.45 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
PennyMac Financial Services, Inc. reports earnings on 20 Oct 2026 (after the close) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Financial - Mortgages
The 12 companies below are the closest to PennyMac Financial Services, Inc. by market cap within the Financial - Mortgages industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| FMCKN Federal Home Loan Mortgage Corporation | 6.15 | 167.39 | +96% | 39No options | $2.6B |
| FREJN Federal Home Loan Mortgage Corporation | 10.41 | 201.33 | +95% | 39No options | $2.6B |
| FMCCP Federal Home Loan Mortgage Corporation | 10.59 | 202.76 | +95% | 39No options | $2.5B |
| FMCCL Federal Home Loan Mortgage Corporation | 9.33 | 192.72 | +95% | 39No options | $2.5B |
| FMCCM Freddie Mac Non-Cum Variable Rate Pref | 9.25 | 192.09 | +95% | 39No options | $2.5B |
| FMCCS Federal Home Loan Mortgage Corporation | 9.49 | 119.69 | +92% | 39No options | $2.5B |
| FREGP Federal Home Loan Mortgage Corporation | 10.28 | 200.29 | +95% | 39No options | $2.4B |
| FMCKL Federal Home Loan Mortgage Corporation | 5.70 | 163.80 | +97% | 39No options | $2.3B |
| FMCCO Federal Home Loan Mortgage Corporation | 9.69 | 195.59 | +95% | 39No options | $2.3B |
| FMCKP Freddie Mac 5.7 % Non-Cum Pfd | 9.99 | 197.98 | +95% | 39No options | $2.3B |
| FMCKO Federal Home Loan Mortgage Corporation | 5.55 | 162.61 | +97% | 39No options | $2.2B |
| FMCC Federal Home Loan Mortgage Corporation | 3.33 | 144.92 | +98% | 39No options | $2.2B |
⚖ Compare PFSI with 7 of them All Financial Services stocks →
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Start free See the Sunday ScanQuestions about PFSI
Is PFSI undervalued right now?
By the GLS models, yes: at 57.75 the stock is 70% below the average fair value of 193.74 (data as of 16 Oct 2026). Whether the discount is deserved is the question to research next.
What is the Wheel Score of PFSI and what does it mean?
PFSI scores 73 out of 100 (Good). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for PFSI?
193.74 per share as of 16 Oct 2026 - the simple average of the 7 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does PennyMac Financial Services, Inc. report earnings next?
The next earnings report is due on 20 Oct 2026 (after the close), 4 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does PFSI have listed options, and how liquid are they?
Yes. The nightly snapshot found 292 listed contracts with 29,066 open interest across all expiries and implied volatility of 52% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.