Big Rout in PennyMac Stock Caught Wall Street Analysts Off Guard

Mortgage lender PennyMac Financial Services Inc. saw a third of its market value wiped out on Friday after its weak earnings report shocked investors and Wall Street analysts. The selloff is continuing Monday, with the shares posting their worst two-day stretch since March 2020.

PennyMac’s fourth-quarter profits shrank by more than 30%, while analysts had estimated a 12% expansion, according to data compiled by Bloomberg. Revenue grew 14%, falling short of an anticipated 33% jump. Investors responded by unloading the shares, which are down almost 40% in the past two sessions. None of the sell-side analysts tracking the stock have sell ratings.