UWM (NYSE:UWMC) Issues Earnings Results, Beats Expectations By $0.06 EPS

UWM (NYSE:UWMC) posted its earnings results on Wednesday. The company reported $0.10 earnings per share for the quarter, beating the consensus estimate of $0.04 by $0.06, Zacks reports. UWM had a net margin of 0.55% and a return on equity of 4.24%. The firm had revenue of $811.09 million during the quarter, compared to the consensus estimate of $690.29 million.

Here are the key takeaways from UWM’s conference call:

• UWM reported $33.4 billion in loan volume and described the quarter as profitable, saying its wholesale business remains strong despite a difficult mortgage-market backdrop.
• Management expects expenses to remain lower, citing AI and technology investments and a gradual shift to in-house servicing; it called $2.1 billion a reasonable 2027 expense target, while noting costs could rise if loan volume grows substantially.
• The company said MSR sales are helping generate liquidity and reduce risk and leverage. Management targets leverage below 1.5 by year-end, from about 1.7–1.8 currently, while emphasizing that MSR sales will remain opportunistic.
• Management expects fourth-quarter volume to be lower than in stronger periods, citing seasonal patterns and market headwinds, and said it does not expect $40 billion–$60 billion of quarterly volume. It also offered no firm timeline for repaying the costly Oaktree preferred financing, saying repayment depends on earnings and market conditions.
• UWM said it has moved 700,000 loans onto its in-house servicing platform and expects further efficiency gains and improved service levels as it optimizes the system; these benefits remain prospective.

UWM Trading Down 6.4%

Shares of UWMC traded down $0.10 during mid-day trading on Friday, reaching $1.52. The company had a trading volume of 7,943,285 shares, compared to its average volume of 18,089,209. UWM has a fifty-two week low of $0.93 and a fifty-two week high of $6.15. The firm has a fifty day simple moving average of $1.31 and a 200-day simple moving average of $2.73. The stock has a market cap of $2.45 billion, a price-to-earnings ratio of 76.25, a price-to-earnings-growth ratio of 3.45 and a beta of 1.82. The company has a current ratio of 1.64, a quick ratio of 1.64 and a debt-to-equity ratio of 6.05.

Analysts Set New Price Targets

Several research firms have recently commented on UWMC. Barclays lowered their price target on shares of UWM from $4.00 to $2.00 and set an “overweight” rating on the stock in a research report on Friday, August 7th. Weiss Ratings cut UWM from a “sell (d+)” rating to a “sell (d)” rating in a report on Tuesday, August 11th. Stephens dropped their price target on UWM from $3.00 to $2.00 and set an “equal weight” rating for the company in a research report on Friday, August 7th. Keefe, Bruyette & Woods lowered shares of UWM from an “outperform” rating to a “market perform” rating and set a $1.50 target price on the stock. in a report on Wednesday, October 7th. Finally, Citigroup restated a “market outperform” rating on shares of UWM in a research report on Monday, October 26th. Four research analysts have rated the stock with a Buy rating, ten have assigned a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, UWM has a consensus rating of “Hold” and an average target price of $2.45.

UWM Company Profile

UWM Holdings Corporation, through its principal subsidiary United Wholesale Mortgage (UWM), operates as a wholesale mortgage lender in the United States. The company provides residential mortgage loans through a network of independent mortgage brokers, who work directly with borrowers and submit applications to UWM for underwriting and funding.

UWM offers a range of home loan products, including conventional, government-backed, jumbo and other residential mortgage programs. Its platform also provides brokers with technology, loan processing, underwriting and closing services designed to support the origination of mortgages for home purchases and refinancings.

United Wholesale Mortgage traces its history to 1986 and is headquartered in Pontiac, Michigan.