Is PennyMac Financial Services, Inc. overvalued or undervalued?

As of 31 October 2025, the valuation grade for PennyMac Financial Services, Inc. moved from attractive to very attractive. The company appears undervalued based on its key valuation ratios, including a P/E ratio of 14, an EV to EBITDA of 3.22, and a PEG ratio of 0.12, all of which suggest that the stock is trading at a discount relative to its earnings growth potential.
In comparison to its peers, PennyMac's P/E ratio is significantly lower than Mr. Cooper Group, Inc. at 29.22 and is also more favorable than Ryder System, Inc. at 14.15. The company's high ROCE of 38.81% further emphasizes its efficiency in generating returns on capital. Despite a recent 1-week decline of 4.59% compared to a 0.71% gain in the S&P 500, PennyMac has shown strong performance year-to-date with a return of 24.20%, outperforming the S&P 500's 16.30%.