Value
8.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.7 |
| P/S | 9.6 |
| EV/EBITDA | 10.0 |
| Fwd P/E | 9.9 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 5.7x
- ▸PEG: 0.25
- ▸Attractively valued
NEWT · Why this verdict
Why NewtekOne (NEWT) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
NewtekOne trades at a forward P/E of 5.8x with a PEG of 0.25, and ranks as attractively priced with superior ROE versus peers. Peer-rank breakdown | The forward multiple should expand toward peer averages over the next 12 months. | →Stable |
| CounterThe stock has already reached its analyst price target (0.3% upside flag), suggesting the value case is largely priced in. | ||
The quality assessment flags an earnings-quality red flag with free cash flow at -463% of net income and a failing Rule of 40 score of -65. Quality breakdown | The FCF-to-net-income ratio should turn positive and Rule of 40 should improve above 0 over the next 12 months. | →Stable |
| CounterA large negative FCF/NI ratio at a specialty lender can reflect balance-sheet growth (loan originations) rather than genuine earnings quality deterioration. | ||
Insiders have been net buyers of $288,444 (0.069% of market cap), with a bullish insider signal. Insider | Insider buying activity should continue or expand over the next 12 months. | →Stable |
| CounterA modest insider purchase relative to market cap may not represent strong conviction. | ||
A debt-to-equity ratio of 1.4 triggers a leverage penalty of -0.5 points in the bear case. Bear case | Leverage metrics should improve or stabilize without further deterioration over the next 12 months. | →Stable |
| CounterModerate leverage of 1.4x is not unusual for a specialty finance/BDC-style lender and may not represent elevated risk. | ||
The catalyst assessment flags a yield trap warning — the dividend yield is high but considered unsafe. Catalyst breakdown | Dividend safety should improve without a cut over the next 12 months. | →Stable |
| CounterA yield-trap flag can be conservative and doesn't always predict an actual distribution cut, especially alongside a strong earnings record. | ||
NewtekOne trades at a forward P/E of 5.8x with a PEG of 0.25, and ranks as attractively priced with superior ROE versus peers.
→StablePeer-rank breakdown
- Expectation
- The forward multiple should expand toward peer averages over the next 12 months.
CounterThe stock has already reached its analyst price target (0.3% upside flag), suggesting the value case is largely priced in.
The quality assessment flags an earnings-quality red flag with free cash flow at -463% of net income and a failing Rule of 40 score of -65.
→StableQuality breakdown
- Expectation
- The FCF-to-net-income ratio should turn positive and Rule of 40 should improve above 0 over the next 12 months.
CounterA large negative FCF/NI ratio at a specialty lender can reflect balance-sheet growth (loan originations) rather than genuine earnings quality deterioration.
Insiders have been net buyers of $288,444 (0.069% of market cap), with a bullish insider signal.
→StableInsider
- Expectation
- Insider buying activity should continue or expand over the next 12 months.
CounterA modest insider purchase relative to market cap may not represent strong conviction.
A debt-to-equity ratio of 1.4 triggers a leverage penalty of -0.5 points in the bear case.
→StableBear case
- Expectation
- Leverage metrics should improve or stabilize without further deterioration over the next 12 months.
CounterModerate leverage of 1.4x is not unusual for a specialty finance/BDC-style lender and may not represent elevated risk.
The catalyst assessment flags a yield trap warning — the dividend yield is high but considered unsafe.
→StableCatalyst breakdown
- Expectation
- Dividend safety should improve without a cut over the next 12 months.
CounterA yield-trap flag can be conservative and doesn't always predict an actual distribution cut, especially alongside a strong earnings record.
TrendMatrix Research · core thesis
Engine thesis — one sentence
NewtekOne screens cheap versus peers with insider buying support, but an earnings-quality red flag on free cash flow, a leverage penalty, and an unsafe dividend yield temper the value case after the stock reached its analyst target.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.1 |
| ROA | 3.5 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 8.2 |
| Current ratio | 5.0 |
| FCF quality | 0.0 |
| Moat | 6.9 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸Strong margins: 16%
- ▸Earnings quality RED FLAG: -463% FCF/NI
- ▸Rule of 40: -65 (fail)
Growth
5.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.2 |
| EPS growth | 6.6 |
Momentum
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.3 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 2.8 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.5 |
| Price target | 7.6 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (5.0) — signal dampened
Insider
8.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 6.5 |
| insider conviction | 8.0 |
| holder change | 10.0 |
- ▸Modest insider buying — $288,444 (0.070% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.6 |
| quality rank | 5.1 |
| growth rank | 4.3 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.1 |
| support resistance | 5.9 |
| 52w position | 8.3 |
Risk (lower is worse)
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.1 |
| days to cover | 0.0 |
| volatility | 2.5 |
| put call | 10.0 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 5.6 |
| debt equity | 4.3 |
- ▸High IV: 92%
- ▸Above max pain $2
Catalyst
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 2.8 |
| dividend safety | 4.5 |
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:21d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.7<4.5
- ASYMMETRY:0.5<1.5@spot
Warning (0)
none
Reward-to-Risk
0.50
Upside
+4.0%
Downside
8.0%
Sizing output
AVOID
SetupRange Bound — RSI 54 mid-range, Bollinger mid-band
EdgeInst Constrain — Small cap ($0.4B) below institutional reach
SuitabilityAggressive — Beta 1.35>1.3, MCap $0.4B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Value at 8.9; weakest: Momentum at 3.7. No conviction either direction.
The strongest dimensions are Value at 8.9, Insider at 8.2, and Sentiment at 6.4; the weakest are Momentum at 3.7, Risk (lower is worse) at 3.8, and Catalyst at 4.1. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 0.50 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cheap Forward Multiple Vs Peers
Trip ifForward P/E rises above 10x from the current 5.8x.
- P2Earnings Quality Red Flag
Trip ifFCF-to-net-income ratio rises above 0%, reversing the current -463% read.
- P3Insider Buying Conviction
Trip ifInsiders become net sellers with total sell value more than $250,000 over 90 days.
- P4High Leverage Penalty
Trip ifDebt-to-equity rises above 2.0x from the current 1.4x.
- P5Unsafe Dividend Yield Trap
Trip ifThe dividend is cut by more than 10%, confirming the unsafe-yield read.