Mr. Cooper Group to Gain Market Share in Servicing and Origination: Analyst

Mr. Cooper Group Inc. (NASDAQ: COOP) is poised to continue gaining market share in the servicing and origination sectors, according to analysts. The company's strong performance in the third quarter of 2024, marked by an operating return on tangible common equity (ROTCE) of 16.8% and record liquidity, has bolstered its position in the market. Mr. Cooper Group's chairman and CEO, Jay Bray, expressed confidence in the company's ability to welcome new team members and close the acquisition of Flagstar's mortgage operations on target in the fourth quarter.

Mr. Cooper Group's servicing segment reported pretax income of $177 million, inclusive of other mark-to-market loss of $126 million, and pretax operating income of $305 million. The servicing portfolio ended the quarter at $1,239 billion, representing a 32% year-over-year increase. The company's origination segment earned pretax income and pretax operating income of $69 million, with funded volume increasing 80% quarter-over-quarter to $6.8 billion.

Mr. Cooper Group's strategies for gaining market share in servicing and origination include leveraging technology to provide a best-in-class home loan experience for customers and strengthening asset performance for investors. The company's servicing segment utilizes industry-leading technology, scale, and process discipline to grow its servicing portfolio and attract new and existing clients. Additionally, Mr. Cooper Group focuses on creating servicing assets at attractive margins by acquiring loans through the correspondent channel and refinancing existing loans through the direct-to-consumer channel. The company's origination segment has implemented new initiatives in its correspondent channel that have been well-received by clients, contributing to the significant increase in funded volume.



Analysts' forecasts for Mr. Cooper Group's earnings and revenue growth indicate exceptional rates of 65.85% and 35.04% per year, respectively, for the next two years. The company's earnings are forecast to grow faster than the US Mortgage Finance industry average of 98.61% and the US market average of 59.2%. Mr. Cooper Group's revenue is forecast to grow faster than the US Mortgage Finance industry average of 58.78% and the US market average of 19.21%.

The average analyst rating for Mr. Cooper Group stock is "Buy," with 60% of analysts recommending the stock as a "Strong Buy" and 20% recommending it as a "Buy." The consensus price target for Mr. Cooper Group stock is $99.56, indicating an increase of 4.49% from the current stock price of $95.29.

Mr. Cooper Group's strong performance, strategic initiatives, and positive analyst sentiment position the company well to continue gaining market share in the servicing and origination sectors. As the company welcomes new team members and closes the acquisition of Flagstar's mortgage operations, investors can expect Mr. Cooper Group to maintain its competitive edge in the mortgage market.