Last Update 11 Feb 26

Fair value Increased 2.41%

NEWT: Higher 2026 EPS Guidance Will Support Future Re Rating Potential

Analysts have nudged their fair value estimate for NewtekOne up by US$0.40 to US$17.00, reflecting slightly lower discount rate assumptions, modestly higher projected profit margins, and recent upward revisions to Street price targets from firms covering the stock.

Analyst Commentary

Recent Street research on NewtekOne has centered on refreshed price targets and the market reaction to the company’s Investor Day guidance, particularly the 2026 EPS midpoint of US$2.35 versus a prior Street figure of US$2.21.

Bullish Takeaways

Bullish analysts are lifting price targets, which suggests they see the shares as better aligned with their updated assumptions on earnings power and risk.
The 2026 EPS guidance midpoint of US$2.35, above the earlier Street figure of US$2.21, is being interpreted as support for a higher earnings base in their models, which can support a higher fair value estimate when incorporated into standard P/E frameworks.
Some bullish analysts appear comfortable looking past the share price reaction around Investor Day and are treating it as a short term response rather than a shift in the underlying long term thesis.
Incremental target increases, even when ratings stay Neutral, indicate that NewtekOne’s execution and margin outlook are being factored into valuation work in a more constructive way than before.

Bearish Takeaways

Bearish analysts point to the share price underperformance of as much as 6% following Investor Day as a sign that the market is not fully embracing the 2026 guidance, which can limit near term valuation re rating.
The decision to keep ratings at Neutral alongside higher targets suggests caution around how reliably NewtekOne can meet its EPS guidance and margin expectations.
Some cautious views focus on execution risk around the 2026 outlook, with concern that any shortfall versus the US$2.35 midpoint could compress the P/E the market is willing to pay.
The mixed reaction between higher targets and restrained ratings underscores a view that potential upside may depend on consistent delivery against guidance rather than on multiple expansion alone.

What's in the News

NewtekOne updated its share repurchase activity, buying 126,595 shares for US$10.43 million between October 1 and October 31, 2025, and completing a total of 172,595 shares repurchased for US$11 million under the buyback announced on November 4, 2024 (Key Developments).
The company issued 2026 earnings guidance with an EPS range of US$2.15 to US$2.55, providing investors with a defined earnings target band to compare against current valuation multiples and existing models (Key Developments).
NewtekOne held an Analyst and Investor Day focused on its operational and financial goals and projections for 2026, which is informing how analysts evaluate earnings power and risk in relation to the new EPS range (Key Developments).

Valuation Changes

Fair Value: nudged higher from US$16.60 to US$17.00, a US$0.40 adjustment in the modelled estimate.
Discount Rate: reduced slightly from 7.56% to 7.38%, reflecting a modestly lower required return in the updated assumptions.
Revenue Growth: projected contraction widened from 0.80% to 1.26%, indicating a slightly deeper expected revenue decline in the forecast period.
Net Profit Margin: edged up from 20.66% to 21.08%, pointing to a small improvement in expected profitability on each dollar of revenue.
Future P/E: moved slightly higher from 9.42x to 9.47x, a minor change in the multiple applied to forward earnings.

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Key Takeaways

Digital, integrated platform and advanced analytics drive operating efficiency, customer retention, and superior credit risk management for sustainable earnings growth.
Favorable regulatory trends and SME banking shifts provide tailwinds for market share expansion, revenue diversification, and ongoing profitability improvements.
Heavy reliance on government-guaranteed lending, rising competition, and evolving macro risks threaten NewtekOne's margins, revenue growth, and long-term earnings stability.

Catalysts

About NewtekOne

Operates as the bank holding company for Newtek Bank, National Association that provides various business and financial solutions under the Newtek and NewtekOne brands to the small- and medium-sized business market.What are the underlying business or industry changes driving this perspective?

NewtekOne is capitalizing on the expanding pool of small and independent business owners in the U.S., growing its addressable market for lending and financial products-which should support sustained loan origination growth and revenue expansion.
The company's fully digital, branchless online platform and integrated solutions (banking, payments, payroll, lending) increase operating leverage and customer stickiness, driving efficiency ratios down and improving net margins over time.
Active use of advanced technology and proprietary analytics in underwriting and servicing enables superior credit risk management and cost-effective customer acquisition, supporting stable asset quality and bolstering long-term earnings growth.
Regulatory and technological tailwinds (such as support for small business lending and the shift of SMEs away from traditional banks toward specialized, tech-driven lenders like NewtekOne) favor continued market share gains and revenue diversity.
Recent improvements in business deposit growth and lower funding costs through integrated offerings are boosting net interest margins and earnings stability, positioning the company for further profitability improvements.

NewtekOne Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming NewtekOne's revenue will decrease by 6.9% annually over the next 3 years.
Analysts assume that profit margins will increase from 14.2% today to 25.4% in 3 years time.
Analysts expect earnings to reach $74.6 million (and earnings per share of $2.81) by about September 2028, up from $51.7 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 6.1x on those 2028 earnings, up from 5.9x today. This future PE is lower than the current PE for the US Diversified Financial industry at 16.5x.
Analysts expect the number of shares outstanding to grow by 0.06% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.77%, as per the Simply Wall St company report.

NewtekOne Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Heavy reliance on SBA 7(a) and government-guaranteed loans exposes NewtekOne to regulatory or legislative changes that could reduce favorable gain-on-sale margins or origination volumes; recent SBA rule changes already caused the company to lower expected gain-on-sale, directly impacting future revenues and earnings stability.
While NewtekOne touts its digital and technology-first platform, it remains less well-known and may lack the digital scale and brand recognition of larger fintechs or traditional banks, threatening long-term customer acquisition and retention-critical for sustaining loan production and revenue growth.
The rapid expansion of big tech-led, embedded financial services and broader fintech adoption could erode NewtekOne's market share among SMBs, leading to heightened competition, compressed fee/margin structures, and potentially weaker net interest income and net margins over time.
Aggressive growth in complex alternative loan securitizations introduces risk of mispricing or underestimating future credit losses, especially if SMB credit conditions deteriorate or prepayment speeds change, potentially resulting in higher charge-offs and lower net earnings, despite historical charge-off rates currently being low.
Sustained inflation and elevated interest rates could ultimately increase SMB borrowing costs and soften loan demand, while simultaneously pressuring deposit costs (as seen by the need to offer higher-yield accounts); together these trends may squeeze net interest margin and overall earnings power in coming years.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $14.075 for NewtekOne based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $18.3, and the most bearish reporting a price target of just $12.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $293.7 million, earnings will come to $74.6 million, and it would be trading on a PE ratio of 6.1x, assuming you use a discount rate of 7.8%.
Given the current share price of $11.66, the analyst price target of $14.08 is 17.2% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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