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1. Company Snapshot

1.a. Company Description

Mr. Cooper Group Inc.provides servicing, origination, and transaction-based services related to single-family residences in the United States.The company operates through two segments: Servicing and Originations.


The Servicing segment performs activities for underlying mortgages, including collecting and disbursing borrower payments, investor reporting, customer service, and modifying loans.The Originations segment originates residential mortgage loans through its direct-to-consumer channel, as well as originates and purchases loans from mortgage bankers and brokers.It operates primarily under the Mr. Cooper and Xome brands.


The company was formerly known as WMIH Corp.and changed its name to Mr. Cooper Group Inc.in October 2018.


Mr. Cooper Group Inc.was incorporated in 2015 and is based in Coppell, Texas.

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1.b. Last Insights on COOP

Mr. Cooper Group Inc.'s recent performance was positively driven by the approval of its merger agreement with Rocket Companies, Inc., which could lead to strategic benefits and synergies. The company's servicing business, a key stabilizer, continues to be a strong contributor. Additionally, the company's focus on AI-driven productivity, through tools like Pathfinder AI, is expected to drive future margin improvement. The upcoming integration with Rocket Companies may also bring about cost efficiency and variable cost alignment.

1.c. Company Highlights

2. Mr. Cooper Group's Solid Q2 Performance

Mr. Cooper Group reported solid second-quarter 2025 performance, with operating return on tangible common equity (ROTCE) of 17.2%, within the guidance range of 16% to 20%. The company's net income was $198 million, with $269 million in pretax operating income. Earnings per share (EPS) came in at $3.13, slightly below analysts' estimates of $3.28. Revenues were driven by strong performance in servicing, which generated $332 million in pretax income, up 15% year-over-year, while Originations generated $64 million.

Publication Date: Jul -27

📋 Highlights
  • Operating ROTCE: 17.2%, within the guidance range of 16% to 20%
  • Net Income: $198 million, with $269 million in pretax operating income
  • Servicing Income: $332 million in pretax income, up 15% year-over-year
  • Balance Sheet Strength: Capital ratio of 26.6% and liquidity at $3.8 billion
  • Asset Quality: Delinquencies declined to 1%, highlighting pristine asset quality

Financial Performance and Profitability

The company's balance sheet remains strong, with a capital ratio of 26.6% and liquidity at $3.8 billion. Asset quality is pristine, with delinquencies declining to 1%. The net interest margin (NIM) is not directly provided, but the company's ability to maintain a high ROTCE suggests efficient operations. The P/E Ratio of 17.67 and P/TBV of 1.97 suggest that the stock may be fairly valued. The ROIC of 27.35% and ROE of 11.73% indicate a strong ability to generate returns.

Business Update and Growth Strategy

The company has successfully launched its maiden MSR fund with $200 million in initial commitments. The merger with Rocket is on track, with integration planning underway. Management emphasized the importance of operating leverage, fee income, and nimble execution in originations as key themes driving performance. The company has invested in AI solutions, including the AgentiQ application, to optimize operations and drive efficiency. According to management, "We're making progress on our strategic initiatives, including the integration with Rocket, and we're well-positioned for continued growth and profitability." (1)

Outlook and Valuation

Guidance for the third quarter is for continued consistent performance. Analysts estimate next year's revenue growth at 13.4%, which could support a higher stock price. With a P/S Ratio of 4.39 and EV/EBITDA of 11.05, the stock may be attractively valued relative to its growth prospects. However, the Dividend Yield of 0.0% and Free Cash Flow Yield of -9.48% suggest that investors may need to prioritize capital appreciation over income.

3. NewsRoom

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Leon Cooperman's Strategic Moves: Fiserv Inc. Exits with a -2.36% Impact

Nov -14

Source: gurufocus.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Mr. Cooper Group Inc. - COOP

Oct -28

Source: prnewswire.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Mr. Cooper Group Inc. - COOP

Oct -24

Source: globenewswire.com

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Sequoia Financial Advisors LLC Has $340,000 Stock Holdings in Mr. Cooper Group Inc $COOP

Oct -22

Source: defenseworld.net

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Bentley Systems Set to Join S&P MidCap 400 and Western Union to Join S&P SmallCap 600

Oct -01

Source: prnewswire.com

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Mr. Cooper Group Inc. Board of Directors Declares Dividend

Sep -19

Source: businesswire.com

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Mr. Cooper Group Inc. Stockholders Approve Merger Agreement with Rocket Companies, Inc.

Sep -03

Source: businesswire.com

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Mr Cooper (COOP) Up 17.3% Since Last Earnings Report: Can It Continue?

Aug -22

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.32%)

6. Segments

Servicing

Expected Growth: 10%

Mr. Cooper Group Inc.'s servicing segment growth is driven by increasing mortgage originations, strategic acquisitions, and expansion into adjacent markets. Additionally, the company's focus on customer retention, digital transformation, and operational efficiency have contributed to its 10% growth. Furthermore, the rising demand for mortgage servicing rights and the company's strong brand reputation have also fueled its growth.

Originations

Expected Growth: 11%

Mr. Cooper Group Inc.'s 11% originations growth is driven by increasing demand for mortgage refinancing, low interest rates, and expansion into new markets. Additionally, the company's investments in digital platforms and strategic partnerships have improved operational efficiency, enabling it to capitalize on market opportunities and drive growth.

Corporate/Other

Expected Growth: 13%

The 13% growth in Corporate/Other segment of Mr. Cooper Group Inc. is driven by increased investment income, reduced corporate expenses, and a surge in mortgage servicing rights. Additionally, the company's diversification into adjacent businesses, such as title insurance and real estate services, has contributed to the segment's growth.

7. Detailed Products

Mortgage Servicing

Mr. Cooper Group Inc. provides mortgage servicing solutions to homeowners, offering loan management, payment processing, and customer support.

Originations

Mr. Cooper Group Inc. offers mortgage originations services, providing borrowers with a range of loan options, including conventional, FHA, VA, and USDA loans.

Xome

Xome is a digital real estate platform that provides title, appraisal, and valuation services to real estate professionals, lenders, and consumers.

Settlement Services

Mr. Cooper Group Inc. offers settlement services, including title insurance, escrow, and closing services, to facilitate smooth real estate transactions.

Capital Markets

Mr. Cooper Group Inc. provides capital markets services, including loan securitization, whole loan trading, and mortgage-backed securities.

8. Mr. Cooper Group Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Mr. Cooper Group Inc. is medium due to the presence of alternative mortgage financing options, but the company's strong brand and customer loyalty mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for Mr. Cooper Group Inc. due to the company's diversified customer base and lack of concentration of customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Mr. Cooper Group Inc. due to the presence of multiple suppliers, but the company's large scale of operations gives it some negotiating power.

Threat Of New Entrants

The threat of new entrants is low for Mr. Cooper Group Inc. due to the high barriers to entry in the mortgage financing industry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high for Mr. Cooper Group Inc. due to the competitive nature of the mortgage financing industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 74.05%
Debt Cost 8.87%
Equity Weight 25.95%
Equity Cost 11.00%
WACC 9.42%
Leverage 285.40%

11. Quality Control: Mr. Cooper Group Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Yield: 7.0

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A-Score: 5.2/10

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Growth: 4.3

Quality: 6.7

Yield: 1.0

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Volatility: 5.3

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A-Score: 5.0/10

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

210.79$

Current Price

210.79$

Potential

-0.00%

Expected Cash-Flows