COOP Stock Forecast & Price Target

Mr. Cooper Group Inc. has shown a robust performance, particularly in its Direct-to-Consumer (DTC) channel, which reported a substantial increase in originations funded, rising 36% sequentially to $9.3 billion, indicating a strong market share gain partly attributed to the Flagstar acquisition. The company's servicing portfolio also demonstrated significant growth, expanding to $1.556 trillion, a 57% year-over-year increase, driven primarily by the addition of subservicing and servicing UPB as a result of the acquisition. Additionally, management's updated guidance for a 16-20% return on equity in 2025 and 2026, coupled with expectations for lower servicing costs, further strengthens the positive outlook for the company.

Mr. Cooper Group Inc. faces a negative outlook primarily due to a significant decline in origination margins, which fell to 1.19%, below estimates, indicating challenges in maintaining profitability amid rising competition and market conditions. Additionally, the company's refinancing recapture rate sharply decreased to 35%, suggesting reduced effectiveness in attracting returning customers and impacting overall servicing revenues. Furthermore, revised return on equity (ROE) estimates reflect a downward trend, and increasing operational expenses pose risks to achieving normalized financial performance, particularly if volumes and margins continue to contract.