Cardiff Oncology shares plunge after Q2 earnings miss
On Wednesday, Keefe, Bruyette & Woods (KBW) raised the price target for Onity Group, Inc. (NYSE:ONIT) stock to $50.00 from the previous target of $45.00, while retaining an Outperform rating on the company’s shares. The revision follows Onity Group’s recently reported financial results, which surpassed KBW and consensus estimates.
The firm’s analyst, Bose George, highlighted the strength of Onity Group’s quarter, noting an adjusted pre-tax return on equity (ROE) of 22%, compared to the forecasted fiscal year 2024’s adjusted ROE of 20%. The company maintains an impressive gross profit margin of 94.9%. Additionally, the GAAP book value for Onity Group increased to $58, with the stock currently trading at just 0.65 times book value. In response to the strong performance, KBW has adjusted its earnings per share (EPS) estimates for the years 2025, 2026, and 2027 to $9.44, $10.84, and $12.64, respectively, up from the previous estimates of $9.17, $10.74, and $12.81. The revision was attributed to higher servicing income and lower expenses than initially projected.
George expressed a positive outlook for Onity Group’s shares, anticipating an upward trend over time driven by multiple expansion and book value growth. He also pointed to the potential reversal of the Deferred Tax Asset (DTA) valuation allowance, which could add approximately $22 per share by the end of the year, as a further boost to the company’s value.
The new price target of $50 is based on approximately 0.9 times the tangible book value (TBV), excluding the DTA. Despite the recent strong performance, Onity Group’s shares are still considered undervalued by KBW, trading at roughly 66% of TBV. The firm’s Outperform rating reflects ongoing confidence in the company’s potential for stock price growth.
In other recent news, Onity Group Inc. reported impressive first-quarter 2025 earnings, with earnings per share (EPS) of $2.5, significantly surpassing analysts’ expectations of $1.51. Despite a slight revenue miss, reporting $249.8 million against a forecast of $250.1 million, the company saw a 5% year-over-year increase in revenue. Onity’s adjusted pretax income rose to $25 million from $15 million the previous year, and its adjusted return on equity (ROE) reached 22%, exceeding the guidance range of 16-18%. In addition, BTIG analyst Eric Hagen recently raised the stock price target for Onity Group to $50, up from $40, while maintaining a Buy rating. Hagen’s optimism is based on the potential release of a portion of Onity’s $180 million valuation allowance, which could enhance liquidity. The analyst suggests that this could lead to early retirement of stock warrants and tighter spreads for unsecured debt, potentially paving the way for mergers and acquisitions. Onity confirmed its 2025 guidance, anticipating over 10% growth in its servicing book year-over-year and maintaining its adjusted ROE expectations.
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