Financial Data and Key Metrics Changes - Revenue increased by 25% year-over-year in Q4 and 6% sequentially, continuing a strong growth trend [21] - Adjusted return on equity (ROE) was 7% for the quarter and 17% when adjusted for governmental impacts [21] - Book value per share increased by more than $11 quarter-over-quarter and $17 year-over-year due to ongoing profitable operations and a $120 million release of the valuation allowance [21][29] Business Line Data and Key Metrics Changes - The origination segment saw significant year-over-year and sequential growth in adjusted pre-tax income, driven by record levels of origination volume in both Consumer Direct and B2B channels [22] - Consumer Direct volume increased sharply, reflecting strong recapture performance and improved revenue per loan [23] - Servicing was profitable but impacted by higher than expected MSR runoff expenses, primarily due to government actions and higher delinquencies [24] Market Data and Key Metrics Changes - The owned MSR portfolio increased by 15% year-over-year, while total industry servicing growth was only 2% [14] - The servicing UPB at the end of 2025 was up 9% over the prior year, with $49 billion in servicing additions net of runoff [14] - The subservicing additions in the second half of 2025 were $33 billion, over 2.5 times the first half level, indicating strong market interest [11] Company Strategy and Development Direction - The company executed a strategic partnership with Finance of America Reverse to simplify its participation in the reverse mortgage market, aiming for future earnings growth [5] - The focus for 2026 includes executing a proven strategy, investing in technology, and driving profitable growth while transitioning out of the Rithm subservicing [19] - The company is targeting an adjusted ROE range of 13%-15% for 2026, reflecting a commitment to maximizing shareholder value [21] Management's Comments on Operating Environment and Future Outlook - The macro environment is viewed as largely favorable for housing and housing finance, with projected 15% year-over-year growth in total industry origination volume [16] - Potential headwinds include the impact of FHA modification rule changes and increased competition in forward residential subservicing [18] - The company remains optimistic about its balanced business model and its ability to perform through market cycles [34] Other Important Information - The company has a liquidity position of $205 million at year-end 2025, with $181 million in unrestricted cash [30] - A $10 million share buyback program has been approved, which can be funded with existing liquidity [31] - The release of the valuation allowance is seen as a strong indicator of recent improvements in profitability [29] Q&A Session Summary Question: Impact of FHA on MSR - Management noted a $14 million impact in Q4 and indicated that stabilization is expected by Q2 2026, but quantifying future impacts is challenging [38][40] Question: Government Shutdown Impact on Originations - Management stated that there was no material impact on refinance performance during the government shutdown, with a record-setting quarter for refinances [41] Question: Guidance Clarification - The 13%-15% guidance for ROE is pre-tax, and management is focused on generating competitive returns [42][44] Question: Ideal Interest Rate Environment for Subservicing - Management indicated that subservicing opportunities are not solely dependent on interest rates, with recent market disruptions creating growth potential [49][52] Question: Capital Availability from Rithm Portfolio Transfer - The transfer of the Rithm portfolio will not free up capital, but the sale of the reverse mortgage business is expected to release approximately $100 million [53]

The bid from Rithm is the leading offer for Paramount, which has been going through a sale process, according to a source https://t.co/BTF1TNJ8B3 ...

Core Insights - The article emphasizes the importance of conducting personal in-depth research and due diligence before making investment decisions, highlighting the inherent risks involved in trading [3]. Company and Industry Summary - The analysis is intended solely for informational purposes and should not be interpreted as professional investment advice [3][4]. - There is a clear disclaimer regarding the lack of any stock or derivative positions in the companies mentioned, indicating a neutral stance from the analyst [2].

Core Viewpoint - Analyst recommendations play a significant role in influencing stock prices, but their reliability is questionable due to potential biases from brokerage firms [1][10]. Brokerage Recommendations for Rithm (RITM) - Rithm has an average brokerage recommendation (ABR) of 1.45, indicating a consensus between Strong Buy and Buy, based on 11 brokerage firms [2]. - Out of the 11 recommendations, seven are Strong Buy and three are Buy, representing 63.6% and 27.3% of total recommendations respectively [2]. Limitations of Brokerage Recommendations - Sole reliance on brokerage recommendations for investment decisions may not be wise, as studies show limited success in guiding investors towards stocks with the best price increase potential [5]. - Brokerage analysts often exhibit a strong positive bias due to vested interests, with five Strong Buy recommendations for every Strong Sell [6][10]. Zacks Rank as an Alternative - Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, providing a more effective indicator of near-term stock price performance [8][11]. - The Zacks Rank is distinct from ABR, as it is based on quantitative models rather than solely on brokerage recommendations [9]. Current Earnings Estimates for Rithm - The Zacks Consensus Estimate for Rithm has increased by 1% over the past month to $1.95, indicating growing optimism among analysts regarding the company's earnings prospects [13]. - The recent change in consensus estimates has contributed to a Zacks Rank 2 (Buy) for Rithm, suggesting a favorable outlook for the stock [14].