ONIT Stock Forecast & Price Target

Onity Group Inc. shows a promising outlook driven by significant anticipated financial improvements, including multiple expansion and book value growth, underpinned by the expected reversal of the deferred tax asset (DTA) valuation allowance, estimated at $22 per share. The company demonstrated strong operational performance, with consumer direct volumes rising 29% sequentially to $384 million, while maintaining stable margins, reflecting solid demand and efficient management. Additionally, funded volume reinforced this positive trend by increasing 34% quarter-over-quarter to $9.4 billion, highlighting the company's robust growth trajectory within the mortgage servicing and origination markets.

Onity Group Inc. has experienced a slight decline in adjusted pre-tax income within its origination segment, dropping from $10 million to $9 million quarter-over-quarter, even though it has maintained positive income for eight consecutive quarters. The reverse mortgage segment is facing significant challenges, with volume decreasing by 6% quarter-over-quarter to $166 million and margins also declining, indicating pressure on profitability. Furthermore, estimated revenues for fiscal years 2025, 2026, and 2027 are forecasted to fall, which reflects a diminishing trend in financial performance and raises concerns regarding the company's ability to sustain its current financial health.