Education
About Us
Working with TipRanks
Follow Us
Mr Cooper Group (COOP)
NASDAQ:COOP
Top Page
Mr Cooper Group
(NASDAQ:COOP)72Outperform
Positive Factors
Financial Performance
Operating income in the company’s servicing portfolio was $318M, surpassing the company's guidance and previous estimates.
Valuation
Mr. Cooper shares are currently trading at a lower valuation compared to median mortgage operating company valuations, suggesting potential upside.
Negative Factors
Earnings
Mortgage origination operating income of $47M came in just below estimates and at the lower end of the company’s range, and well below the $69M reported in the previous quarter.
Mr Cooper Group (COOP) vs. S&P 500 (SPY)
Market Cap
$6.88B
Dividend YieldN/A
Average Volume (3M)565.72K
Price to Earnings (P/E)10.6
Beta (1Y)1.13
Revenue Growth22.89%
EPS Growth39.00%
CountryUS
Employees6,800
SectorFinancial
Sector Strength93
IndustryBanking
Share Statistics
EPS (TTM)10.18
Shares Outstanding63,594,620
10 Day Avg. Volume659,077
30 Day Avg. Volume565,722
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)N/A
Price to Sales (P/S)2.52
Price to Cash Flow (P/CF)-2.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$121.00Price Target Upside9.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Mr Cooper Group Business Overview & Revenue Model
Company DescriptionMr. Cooper Group, Inc. is engaged in the provision of residential loan services. It operated through the following segments: Servicing, Originations and Xome. The Servicing segment consists of collecting loan payments, remitting principal and interest payments to investors, managing escrow funds for the payment of mortgage-related expenses, such as taxes and insurance, performing loss mitigation activities on behalf of investors and otherwise administering mortgage loan servicing portfolio. The Originations segment provides refinance opportunities to the existing servicing customers through direct-to-consumer platform and purchases loans from originators through correspondent channel. The Xome segment offers technology and data-enhanced solutions to banks, non-banks, investment companies, and GSEs engaged in the origination, investment, servicing of mortgage loans, as well as to home buyers, home sellers, real estate professionals mortgage professionals, and real estate investors. The company was founded on August 17, 1994 and is headquartered in Coppell, TX.
How the Company Makes MoneyMr. Cooper Group generates revenue primarily through its Servicing and Originations segments. In the Servicing segment, the company earns fees by managing a large portfolio of mortgage loans, with income derived from servicing fees, late charges, and ancillary fees associated with mortgage servicing. The Originations segment contributes to revenue through the origination of new mortgage loans and refinancing. This includes earning origination fees, gain on sale of loans, and interest income during the holding period before selling the loans in the secondary market. Additionally, Mr. Cooper may engage in strategic partnerships with financial institutions to expand its service offerings and enhance revenue potential.
Mr Cooper Group Financial Statement Overview
Summary
Mr Cooper Group's financial statements indicate a mixed performance. While there is a recent return to revenue and profit growth, historical volatility suggests operational risks. The balance sheet improvements, notably zero debt, enhance financial stability. However, negative cash flow trends raise concerns about liquidity, requiring effective management.Income Statement
The company shows a fluctuating revenue trajectory with a 24.2% increase from 2023 to 2024. Gross and net profit margins have shown improvement, with the latest gross profit margin at 68.8% and net profit margin at 30.1% for 2024. The EBIT margin also stands strong at 40.7%. However, historical data depicts inconsistency with a decreasing trend from 2021 to 2023. This suggests some volatility in revenue generation and profitability, though the recent year shows a positive rebound.65
Positive
Balance Sheet
The balance sheet presents a solid equity base with an equity ratio of 25.4% as of 2024, and a return on equity of 13.9%. The significant reduction in total debt to zero by 2024 reflects improved financial stability and reduced leverage risk. However, the company's historical high leverage in previous years poses potential risk exposure if such trends repeat. Overall, the improved equity position and debt reduction are positive indicators of financial health.70
Positive
Cash Flow
The cash flow statements reveal a concerning trend with negative free cash flow growth in recent years, particularly from 2022 to 2023. Operating cash flow versus net income ratio is negative for 2024, indicating potential cash flow issues despite reported net income. The free cash flow to net income ratio is also negative, which raises concerns about cash flow sustainability. While there are positive financing and investing cash flow activities, the operational cash flow challenges need addressing.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.23B | 1.79B | 2.46B | 3.32B | 3.07B | Gross Profit |
| 1.53B | 620.00M | 1.43B | 1.80B | 1.30B | EBIT |
| 906.00M | 661.00M | 990.00M | 2.36B | 534.00M | EBITDA |
| 964.00M | 699.00M | 1.03B | 2.42B | 980.00M | Net Income Common Stockholders |
| 669.00M | 500.00M | 923.00M | 1.45B | 305.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 753.00M | 571.00M | 527.00M | 895.00M | 695.00M | Total Assets |
| 18.94B | 14.20B | 12.78B | 14.20B | 24.16B | Total Debt |
| 11.39B | 7.45B | 5.56B | 7.67B | 13.30B | Net Debt |
| 10.63B | 6.88B | 5.03B | 6.77B | 12.61B | Total Liabilities |
| 14.13B | 9.91B | 8.72B | 10.84B | 21.66B | Stockholders Equity |
| 4.81B | 4.28B | 4.06B | 3.37B | 2.50B |
| Cash Flow | Free Cash Flow | |||
| -762.00M | -972.00M | 2.15B | 1.67B | 144.00M | Operating Cash Flow |
| -724.00M | 896.00M | 3.77B | 2.63B | 331.00M | Investing Cash Flow |
| -2.70B | -1.84B | -1.32B | 1.19B | -134.00M | Financing Cash Flow |
| 3.65B | 978.00M | -2.78B | -3.70B | 104.00M |
Mr Cooper Group Technical Analysis
Positive
110.37
Price Trends
102.74
Positive
99.11
Positive
93.01
Positive
Market Momentum
2.12
Positive
59.14
Neutral
38.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COOP, the sentiment is Positive. The current price of 110.37 is above the 20-day moving average (MA) of 108.74, above the 50-day MA of 102.74, and above the 200-day MA of 93.01, indicating a bullish trend. The MACD of 2.12 indicates Positive momentum. The RSI at 59.14 is Neutral, neither overbought nor oversold. The STOCH value of 38.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for COOP.
Mr Cooper Group Risk Analysis
Mr Cooper Group disclosed 42 risk factors in its most recent earnings report. Mr Cooper Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Mr Cooper Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $6.88B | 10.63 | 13.90% | ― | 22.89% | 39.00% | |
68 Neutral | $1.47B | 13.46 | 7.05% | 7.78% | -5.09% | 6.25% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
62 Neutral | $5.24B | 17.44 | 8.45% | 1.08% | 42.36% | 110.48% | |
61 Neutral | $26.83B | 79.86 | 7.74% | ― | 30.23% | ― | |
50 Neutral | $108.91M | ― | -13.30% | 17.75% | 16.46% | 29.76% |
* Financial Sector Average
Performance Comparison
COOP
Mr Cooper Group
110.37
37.98
52.47%
PFSI
PennyMac Financial
102.84
17.84
20.99%
LADR
Ladder Capital
11.64
1.71
17.22%
CHMI
Cherry Hill Mortgage
3.43
0.37
12.09%
RKT
Rocket Companies
14.90
2.31
18.35%
Mr Cooper Group Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: 2.84% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call was characterized by strong financial results, successful strategic actions like the Flagstar acquisition, and recognition for operational excellence, indicating a healthy and growing business despite minor legal and market challenges. The sentiment is overall positive due to significant achievements and optimistic future guidance.Highlights
Strong Financial Performance
Pre-tax operating income was $235 million with Operating ROTCE at 15.8%. Tangible book value grew 12% year-over-year to $71.61 per share. Capital ratio stood at 24.4%, and liquidity was $3.4 billion.
Successful Flagstar Acquisition
Completed the acquisition of Flagstar's mortgage banking operations, onboarding 1.1 million customers, marking the largest acquisition in company history.
Servicing Segment Growth
Servicing generated $318 million in pre-tax income, up 39% year-over-year. The company is now the largest servicer in the US with a portfolio of $1.5 trillion.
Recognition and Awards
Won the SHARP Gold Award from Freddie Mac for servicers and received an upgrade from Fitch to a 1 minus rating.
Technological Advancements
AgentiQ, a real-time conversation analysis tool, was fully rolled out, improving customer service and operational efficiency.
Strong Market Position
Climbed into a top five market share position in the correspondent channel.
Lowlights
Legacy Business Legal Costs
Incurred an $18 million charge related to a court ruling on a lawsuit associated with a legacy business.
Ginnie Mae Delinquency Concerns
Noticed a small but consistent deterioration in industry-wide performance for Ginnie Mae loans, though it only represents 19% of the total loan portfolio.
Unfavorable Market Conditions
The current high interest rate environment limits rate-term refinance opportunities, affecting the DTC origination channel.
Company Guidance
During the Mr. Cooper Group's fourth quarter 2024 earnings call, the company provided updated guidance and shared several key metrics. They reported a pre-tax operating income of $235 million with an operating ROTCE of 15.8%. Tangible book value saw a year-over-year increase of 12% to $71.61 per share, while the capital ratio was at 24.4% and liquidity stood at $3.4 billion. The Servicing segment generated $318 million in pre-tax income, marking a 39% increase from the previous year. Moreover, they increased their ROTCE guidance range to 16% to 20% for 2025 and 2026, reflecting confidence in their balanced business model. The Originations segment produced $47 million in EBT, with funded volumes growing 38% sequentially. The company also emphasized their strategic focus on leveraging technology, improving customer experience, and expanding their servicing portfolio, which now stands at $1.5 trillion, making Mr. Cooper the largest servicer in the U.S. Additionally, they highlighted their growing fee income, which has been expanding at a double-digit pace and now constitutes over 20% of total revenue.Mr Cooper Group Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Mr. Cooper Group Announces Leadership Transition at Xome
Positive
Jan 10, 2025
Mr. Cooper Group has announced a leadership transition at Xome, with CEO Mike Rawls planning to retire by June 30, 2025. Chris Marshall, former Vice Chairman and President of Mr. Cooper, will take over in a consulting role to ensure a smooth transition, leveraging his extensive experience in financial services and mortgage operations to drive market share growth and new revenue avenues for Xome. This change is expected to bolster Xome’s market position and sustain its growth momentum.
Executive/Board ChangesBusiness Operations and Strategy
Mr Cooper Group Appoints Andrew Bon Salle to Board
Positive
Dec 16, 2024
Mr. Cooper Group Inc. announced the appointment of Andrew Bon Salle to its board of directors, effective January 1, 2025. Bon Salle, a seasoned professional with over three decades of experience in capital markets and mortgage policy leadership, is expected to bring strategic insights and transformation to the firm’s operations. This strategic move aligns with Mr. Cooper’s vision of enhancing its leadership in the mortgage industry and advancing its mission to make homeownership accessible for all Americans.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.