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Wednesday, shares of OneMain Holdings (NYSE:OMF) saw a slight decline of approximately 1.1% in contrast to the S&P 500, which experienced an approximate 0.6% increase. The movement followed the company’s first-quarter results and confirmation of its financial guidance. JMP analysts, led by David Scharf, maintained a Market Outperform rating and a $65.00 price target on the stock.
In the wake of the earnings announcement and subsequent conference call, JMP provided updates to their financial model and additional insights. Despite OneMain’s stronger-than-expected portfolio growth and improving credit trends, management did not adjust the financial guidance upwards, though InvestingPro data shows a healthy 8% revenue growth forecast for FY2025. The company maintains a strong "GOOD" Financial Health Score, with particularly robust cash flow metrics. According to JMP’s assessment, OneMain is strategically over-reserved for potential losses, which positions it well for future uncertainties.
OneMain’s management emphasized the company’s commitment to cautious credit underwriting practices, aiming to prioritize long-term investments and growth initiatives. They also noted that the existing back book, which includes loans made before the tightening of credit standards, is expected to continue to amortize over the upcoming quarters.
The reiteration of the Market Outperform rating by JMP reflects a positive outlook on OneMain’s ability to handle macroeconomic shifts and maintain robust consumer demand trends. The company’s strategic approach to credit underwriting and loss provisioning appears to be a key factor in this assessment, as it prepares to adapt to any forthcoming economic changes.
In other recent news, OneMain Holdings Inc. reported robust financial results for the first quarter of 2025, exceeding Wall Street expectations. The company posted an earnings per share (EPS) of $1.72, surpassing the forecasted $1.55, and reported revenue of $1.18 billion against the expected $1.16 billion. This marks a 19% year-over-year increase in adjusted net income per share and a 10% rise in total revenue. Despite these strong results, the stock experienced a slight decline. Looking ahead, OneMain Holdings projects managed receivables growth of 5-8% and total revenue growth of 6-8% for the year. The company is also exploring an Industrial Loan Company (ILC) application, which could enhance its strategic capabilities. Analyst firms have not provided any recent upgrades or downgrades, but the company maintains a conservative underwriting approach amidst economic uncertainty.
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