Mr. Cooper Group Gains 19% on Q4 Earnings Beat & New Partnership

Mr. Cooper Group Inc. (NASDAQ: COOP) shares gained 19% on February 11, after the company significantly topped Q4 earnings expectations and also announced a new strategic partnership with the fintech software servicing company Sagent.

The earnings beat was driven by strong returns and portfolio growth, aided by significant advancements in many of the technology initiatives and strong business momentum.

Mixed Q4 Numbers

Positively, Q4 adjusted earnings of $2.01 per share massively beat analysts’ expectations of $1.23 per share. The company reported earnings of $2.00 per share for the prior-year period.

However, revenues of $402 million lagged the consensus estimate of $563.23 million.

During the quarter, the company repurchased 1.3 million common shares for $56 million at an average price of $41.22. Further, the Board authorized an incremental $200 million stock repurchase, bringing the total authorization to $252 million.

New Strategic Partnership with Sagent

Concurrent with the earnings results, Mr. Cooper Group announced that it has inked a strategic partnership deal with the fintech software servicing company Sagent M&C, with an aim to create the mortgage industry’s first cloud-native servicing platform.

Per the terms of the deal, Sagent will purchase certain intellectual property rights related to Mr. Cooper Group’s proprietary, cloud-based technology platform, while Mr. Cooper Group will receive an equity stake in Sagent.

The multi-year deal will combine Mr. Cooper’s mortgage servicing depth with Sagent’s software innovation capabilities to speed up the modernization of top banks and lenders in the U.S., including Mr. Cooper.

CEO Comments

Mr. Cooper Group CEO, Jay Bray, commented, “We enter 2022 with an extremely talented and dedicated team and a balanced business model that positions us to benefit from higher interest rates.”

Analysts Recommendation

Following the quarterly results, Wedbush Analyst Henry Coffey reiterated a Buy rating on the stock with a price target of $60 (18.81% upside potential). With 3 Buys and 1 Hold, the stock has a Strong Buy recommendation from analysts. At the time of writing, the price target on COOP was $59 (16.59% upside potential)

Bloggers Weigh In

TipRanks data shows that financial blogger opinions are 100% Bullish on COOP stock, compared to a sector average of 73%.

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