NewtekOne, Inc. (NEWTH)
For informational purposes only. Not financial advice.
NewtekOne, Inc. (NEWTH) is a publicly traded company trading at $25.17 with a market cap of 654M. It holds a moderate AI score of 56/100 based on fundamental, technical, and sentiment analysis.
NewtekOne, Inc., through Newtek Bank, provides financial and business solutions to the small- and medium-sized business (SMB) market. They offer a comprehensive suite of services including banking, payment processing, insurance, and technology solutions.
Company Overview
NewtekOne empowers SMBs with comprehensive financial and business solutions, including banking, payment processing, insurance, and technology services, positioning itself as a one-stop-shop with a high dividend yield of 8.60% and a compelling P/E ratio of 12.45.
Investment Thesis
NewtekOne presents a compelling investment opportunity due to its focus on the underserved SMB market and its diversified service offerings. The company's high gross margin of 82.8% and a profit margin of 16.1% indicate strong profitability. With a dividend yield of 8.60%, NewtekOne offers attractive income potential. Key value drivers include the continued expansion of its banking operations and the cross-selling of its diverse service portfolio to existing clients. Upcoming catalysts include potential acquisitions to expand its service offerings and geographic reach. The company's ability to leverage technology to streamline operations and enhance customer experience further strengthens its competitive position. The P/E ratio of 12.45 suggests that the company is undervalued relative to its growth prospects.
Key Highlights
- Market capitalization of $0.65 billion, reflecting substantial investor interest.
- P/E ratio of 12.45, indicating a potentially undervalued stock compared to its earnings.
- High gross margin of 82.8%, showcasing efficient operations and strong pricing power.
- Profit margin of 16.1%, demonstrating effective cost management and profitability.
- Dividend yield of 8.60%, offering a significant income stream for investors.
Competitors
Strengths
- Comprehensive suite of financial and business solutions.
- Focus on the underserved SMB market.
- Established banking operations through Newtek Bank.
- High gross margin and profit margin.
Weaknesses
- Reliance on the SMB market, which can be sensitive to economic downturns.
- Exposure to credit risk from lending activities.
- Competition from larger financial institutions.
- Dependence on technology infrastructure for service delivery.
Catalysts
- Ongoing: Expansion of banking operations and loan portfolio.
- Ongoing: Cross-selling of services to existing clients.
- Upcoming: Potential strategic acquisitions to expand service offerings.
- Ongoing: Investment in technology innovation to enhance customer experience.
Risks
- Potential: Economic downturn impacting SMBs and loan defaults.
- Ongoing: Increased competition from larger financial institutions and fintech companies.
- Potential: Regulatory changes affecting the financial services industry.
- Ongoing: Cybersecurity threats and data breaches compromising customer data.
Growth Opportunities
- Expansion of Banking Operations: NewtekOne can grow by expanding its banking operations through organic growth and strategic acquisitions. The market for SMB lending is substantial, with trillions of dollars in outstanding loans. By increasing its loan portfolio and deposit base, NewtekOne can drive revenue growth and improve profitability. Timeline: Ongoing.
- Cross-Selling of Services: NewtekOne has a significant opportunity to cross-sell its diverse range of services to existing clients. By offering bundled solutions and integrated platforms, the company can increase customer lifetime value and generate recurring revenue streams. The market for bundled financial and business services is growing as SMBs seek streamlined solutions. Timeline: Ongoing.
- Strategic Acquisitions: NewtekOne can pursue strategic acquisitions to expand its service offerings and geographic reach. By acquiring complementary businesses, the company can enhance its capabilities and enter new markets. The market for acquisitions in the financial services and technology sectors is active, providing ample opportunities for NewtekOne to grow through inorganic means. Timeline: Ongoing.
- Technology Innovation: NewtekOne can invest in technology innovation to enhance its customer experience and streamline its operations. By developing new digital banking platforms and mobile applications, the company can attract new customers and improve customer retention. The market for fintech solutions is rapidly growing, providing opportunities for NewtekOne to differentiate itself through technology. Timeline: Ongoing.
- Partnerships and Alliances: NewtekOne can form partnerships and alliances with other companies to expand its reach and offer new services. By partnering with complementary businesses, the company can access new markets and customers. The market for partnerships and alliances in the financial services industry is growing as companies seek to expand their capabilities and reach. Timeline: Ongoing.
Opportunities
- Expansion of banking operations through organic growth and acquisitions.
- Cross-selling of services to existing clients.
- Strategic partnerships and alliances.
- Investment in technology innovation.
Threats
- Economic downturns impacting SMBs.
- Increased competition from fintech companies.
- Regulatory changes affecting the financial services industry.
- Cybersecurity threats and data breaches.
Competitive Advantages
- Diversified service offerings providing a one-stop-shop for SMBs.
- Established banking operations through Newtek Bank, National Association.
- Proprietary technology platform for delivering integrated solutions.
- Strong relationships with SMB clients.
About
Founded in 1998 and headquartered in Boca Raton, Florida, NewtekOne, Inc. has evolved into a comprehensive provider of business and financial solutions tailored for the small- and medium-sized business (SMB) market. Originally known as Newtek Business Services Corp., the company rebranded as NewtekOne, Inc. in January 2023 to reflect its expanded role as the bank holding company for Newtek Bank, National Association. NewtekOne's core offering revolves around providing a suite of services designed to support the growth and operational efficiency of SMBs. These services encompass a wide range of financial products, including demand, savings, NOW, money market, and time deposits, as well as loan products such as SBA loans, commercial and industrial loans, and commercial real estate loans. Beyond traditional banking services, NewtekOne offers electronic payment processing solutions, wholesale brokerage insurance agency services, and payroll management services. Furthermore, the company provides technology solutions, including website hosting, dedicated server hosting, cloud hosting, web design and development, internet marketing, ecommerce solutions, data storage, backup, and disaster recovery services. This comprehensive approach positions NewtekOne as a strategic partner for SMBs seeking integrated financial and operational support.
What They Do
- Provides banking services through Newtek Bank, National Association.
- Offers SBA loans, commercial and industrial loans, and commercial real estate loans.
- Provides electronic payment processing services, including credit and debit card processing.
- Offers wholesale brokerage insurance agency services.
- Provides payroll management and related payment and tax reporting services.
- Offers website hosting, dedicated server hosting, and cloud hosting.
- Provides web design and development, and internet marketing services.
- Offers data storage, backup, and disaster recovery solutions.
Business Model
- Generates revenue from interest income on loans.
- Earns fees from payment processing services.
- Receives commissions from insurance sales.
- Charges fees for payroll management and technology services.
Industry Context
NewtekOne operates within the financial services industry, specifically targeting the credit services segment. The SMB market is a significant driver of economic growth, and NewtekOne's focus on providing tailored financial and business solutions positions it well to capitalize on this trend. The competitive landscape includes traditional banks, payment processors, and insurance providers. Competitors like AXG and BULL offer similar financial products, but NewtekOne differentiates itself through its integrated suite of services and technology-driven approach. The industry is experiencing growth in digital banking and fintech solutions, which NewtekOne is well-positioned to leverage.
Key Customers
- Small- and medium-sized businesses (SMBs) across various industries.
- Restaurants, retail stores, and assisted living facilities.
- Taxi cabs, parks, and golf courses.
Financials
Recent Quarterly Results
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2024 | $81M | $11M | $0.00 |
| Q1 2024 | $76M | $10M | $0.00 |
| Q4 2023 | $71M | $19M | $0.00 |
| Q3 2023 | $70M | $10M | $0.00 |
Source: Company filings
Chart & Info
Price Chart
NewtekOne, Inc. (NEWTH) stock price: $25.17 (-0.23, -0.93%)
Why Bull
- •NewtekOne's recent insider buying suggests confidence in the company's future prospects, aligning interests with shareholders. The community sentiment indicates growing optimism regarding NewtekOne's strategic shift towards a more streamlined business model. Market perception seems to be improving as NewtekOne focuses on its core lending services, potentially attracting more investors. Bullish community members believe NewtekOne's focus on small and medium-sized businesses positions it well for long-term growth, reminiscent of how niche lenders thrived post-2008.
Why Bear
- •Recent community discussions highlight concerns about the potential impact of regulatory changes on NewtekOne's lending practices. Some bearish community members express skepticism about NewtekOne's ability to effectively manage its loan portfolio in a potentially slowing economy. Market perception reflects some uncertainty regarding the long-term sustainability of NewtekOne's dividend payouts. Insider selling, although not as prevalent as buying, raises questions among some investors about short-term performance expectations, similar to concerns seen with regional banks in early 2023.
Latest News
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Technical Analysis
Rationale
AI-generated technical analysis for NEWTH including trend direction, momentum, and pattern recognition.
What to Watch
Key support and resistance levels, volume signals, and upcoming events.
Risk Management
Position sizing, stop-loss levels, and risk-reward assessment.
Community
Discussion
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Sentiment
Community sentiment and discussion activity for NEWTH.
Make a Prediction
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Current price: $25.17
Analyst Consensus
Consensus Rating
Aggregated Buy/Hold/Sell recommendations from Benzinga, Yahoo Finance, and Finnhub for NEWTH.
Price Targets
Wall Street price target analysis for NEWTH.
Insider Flow (30d)
No insider trades in the last 30 days.
MoonshotScore
Score Factors
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Revenue Growth 4/100
Revenue grew only 11.3% YoY, suggesting the company is in a slower growth phase.
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Gross Margin 10/100
Gross margin of 82.8% shows excellent pricing power and a strong competitive moat.
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Operating Leverage 4/100
Limited operating leverage due to slower revenue growth, keeping profit scaling constrained.
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Cash Runway 8/100
Strong cash reserves of $310M provide a solid financial cushion for growth investments and market downturns.
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R&D Intensity 5/100
R&D spending data is currently unavailable for this company.
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Insider Activity 6/100
No significant insider buying or selling recently, which is neutral for the stock outlook.
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Short Interest 2/100
Very low turnover at 0.02% makes this stock illiquid; exiting positions may be difficult.
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Price Momentum 8/100
Strong bullish momentum with oversold rsi and above sma50 and above sma200, suggesting sustained upward price trend.
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News Sentiment 5/100
No sentiment data available
What does this score mean?
The MoonshotScore rates NEWTH's growth potential on a scale of 0-100 across multiple factors including innovation, market disruption, financial health, and momentum.
Competitors & Peers
Frequently Asked Questions
What does NewtekOne, Inc. do?
NewtekOne, Inc. operates as the bank holding company for Newtek Bank, National Association, providing a comprehensive suite of financial and business solutions to the small- and medium-sized business (SMB) market. These services include banking, payment processing, insurance, and technology solutions. NewtekOne aims to be a one-stop-shop for SMBs, offering integrated solutions that support their growth and operational efficiency. By providing a diverse range of services, NewtekOne seeks to build long-term relationships with its clients and generate recurring revenue streams.
Is NEWTH stock a good buy?
NEWTH stock presents a potentially attractive investment opportunity, supported by its focus on the growing SMB market and its diversified service offerings. The company's high gross margin and profit margin indicate strong profitability. The dividend yield of 8.60% offers a significant income stream for investors. However, investors should consider the risks associated with lending to SMBs and the competitive landscape. A P/E ratio of 12.45 suggests the company may be undervalued, but further analysis of its growth prospects and financial performance is warranted before making an investment decision.
What are the main risks for NEWTH?
NewtekOne faces several risks, including the potential for economic downturns impacting SMBs and leading to loan defaults. Increased competition from larger financial institutions and fintech companies could erode market share. Regulatory changes in the financial services industry could increase compliance costs and limit business activities. Cybersecurity threats and data breaches pose a risk to customer data and could damage the company's reputation. Effective risk management and mitigation strategies are crucial for NewtekOne to navigate these challenges and sustain its growth.
Is NEWTH a good stock to buy?
Whether NEWTH is a suitable investment depends on your goals, risk tolerance, and time horizon. Evaluate NewtekOne, Inc.'s revenue growth, profit margins, debt levels, and valuation relative to peers. This is not financial advice.
What is the NEWTH MoonshotScore?
The MoonshotScore rates NEWTH from 0 to 100 across growth potential, financial health, market momentum, and risk factors. Scores above 70 suggest strong potential, 50-70 moderate, and below 50 warrants caution. It is recalculated daily using the latest market data. This score is informational only.
How often is NEWTH data updated?
NEWTH prices update in real time during U.S. market hours (9:30 AM-4:00 PM ET, weekdays). Fundamentals refresh after quarterly or annual filings. Analyst ratings and AI insights update daily. News is aggregated continuously from financial sources.
What do analysts say about NEWTH?
Analyst coverage for NEWTH includes consensus ratings (buy, hold, sell), 12-month price targets, and earnings estimates from major research firms. Key data points: consensus target price, number of covering analysts, recent upgrades or downgrades, and earnings beat/miss history. See the Analyst Consensus section on this page.
What are the risks of investing in NEWTH?
Risk categories for NEWTH include market risk, company-specific risk (management, competition), financial risk (debt, cash burn), and macroeconomic risk (rates, inflation). Beta above 1.0 indicates higher volatility than the S&P 500. Review the Risk Factors section on this page for details. All investments carry risk of loss.
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.
Data provided for informational purposes only.
- Information is based on available data and may be subject to change.
- Investment decisions should be based on thorough research and consultation with a financial advisor.