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On Tuesday, JMP analysts revised the price target for Guild Holdings Co . (NYSE:GHLD) shares, reducing it to $15.50 from the previous $16.50. With a current market capitalization of $799 million and a beta of 0.86, indicating lower volatility than the broader market, the firm maintained its Market Outperform rating for the company. The adjustment follows Guild Holdings’ first quarter 2025 earnings report, released on May 7, which revealed an adjusted EPS of $0.35. This figure surpassed both the consensus estimate of $0.24 and the fourth quarter of 2024 earnings of $0.32 per share. According to InvestingPro, the company maintains strong liquidity with a current ratio of 2.26, though it’s currently experiencing rapid cash burn - two of several key insights available in the comprehensive Pro Research Report.
The first quarter results also included a GAAP EPS of ($0.39), a significant decline from the $1.57 per share reported in the previous quarter. This drop was primarily due to a ($69.9M) or approximately ($1.13) per share fair value mark on the Mortgage Servicing Rights (MSR) portfolio. This contrasts with an $84.3M or roughly $1.36 per share fair value mark in the fourth quarter of 2024.
Despite the challenges faced in the first quarter, such as high mortgage rates and limited housing supply, Guild Holdings’ performance exceeded expectations in terms of origination. The company’s strategic focus on purchase-market-driven origination and its effective integration of smaller mortgage lenders through acquisitions are expected to contribute to an increase in market share and sustainable earnings growth over time. The company has demonstrated strong revenue growth of 32.57% over the last twelve months.
JMP analysts believe that Guild Holdings is well-positioned to navigate the current mortgage industry landscape and to outperform its competitors in the residential mortgage origination sector. Trading at a price-to-book ratio of 0.67 and a notably low PEG ratio of 0.28, the new price target of $15.50 is based on 0.98 times the current tangible book value and 9.1 times the estimated earnings per share for 2025. For detailed valuation metrics and additional insights, visit InvestingPro, where you’ll find exclusive analysis and Fair Value estimates.
In other recent news, Guild Holdings reported its first-quarter 2025 earnings, showcasing an earnings per share (EPS) of $0.35, which exceeded the anticipated $0.22. However, the company’s revenue fell short, reaching $198 million compared to the projected $259.66 million. Despite the revenue miss, Guild Holdings saw a significant 35% year-over-year increase in loan originations, totaling $5.2 billion. The company’s servicing portfolio also expanded to $94 billion. Analysts from firms such as JPMorgan and Wells Fargo (NYSE:WFC) have been closely monitoring Guild’s strategic moves, especially in light of industry changes like Rocket’s acquisition of Redfin (NASDAQ:RDFN) and Mr. Cooper. Guild Holdings is focused on expanding its market share and improving operational efficiencies, with a particular emphasis on first-time homebuyers. The company has also been active in organic growth and strategic acquisitions, doubling its loan officer headcount since the end of 2020. Looking forward, Guild Holdings remains cautiously optimistic about the housing market’s recovery and is exploring opportunities for further growth.
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