MeritValue

PennyMac Financial Services, Inc.

PFSIdata completeness 100%10 fiscal years on file
The thesis, from the filings

PennyMac Financial Services, Inc. earns about 10% on invested capital, and has bought back 20% of its shares over 5 years. The applicable estimate puts fair value near $91.45 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$7.33M1$12.4M2$13.4M3$26.9M3$20.1M3
Net income$1B4$475.5M5$144.7M6$311.4M6$501.1M6
Operating cash flow$2.56B7$6.03B8−$1.58B9−$4.53B9−$1.65B9
Capital expenditure$7.9M10$7.16M11$1.39M12$1.72M12$11.9M12
Free cash flow (derived)$2.56B7$6.03B8−$1.58B9−$4.53B9−$1.66B9
Total debt$3.1B13$3.75B14$4.43B15$5.26B16$6.23B17
Cash & equivalents$340.1M18$1.33B19$938.4M19$238.5M19$301.7M19
Diluted shares67.5M56.0M52.7M53.4M53.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$799.71
your share of equity
Profit it earned you last year
$93
Free cash flow it threw off
−$308.81
Debt you’d be carrying
$1,156.23

10 shares is a claim on $799.71 of net worth that earned you $93 and generated −$308.81 of cash last year, against $1,156.23 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
10% avg · 5y
FY21 21%FY22 12%FY23 9%FY24 3%FY25 5%

It earned an average 10% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
−20% shares · 5y

Share count is down 20% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 101% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$91.45
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$475.5M
  • growthAssumed0.0%
Graham Number
$129.36
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001558370-24-001429 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001558370-25-001148 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001104659-26-018142 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001558370-24-001429 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001558370-25-001148 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001104659-26-018142 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001558370-24-001429 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001558370-25-001148 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001104659-26-018142 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001558370-24-001429 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001558370-25-001148 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001104659-26-018142 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001558370-22-001740 (LongTermDebt)
  14. 10-K · period ending 2022-12-31 · accession 0001558370-23-001755 (LongTermDebt)
  15. 10-K · period ending 2023-12-31 · accession 0001558370-24-001429 (LongTermDebt)
  16. 10-K · period ending 2024-12-31 · accession 0001558370-25-001148 (LongTermDebt)
  17. 10-K · period ending 2025-12-31 · accession 0001104659-26-018142 (LongTermDebt)
  18. 10-K · period ending 2021-12-31 · accession 0001558370-25-001148 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)
  19. 10-K · period ending 2022-12-31 · accession 0001104659-26-018142 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)