NEWT

NewtekOne ($NEWT) Chairman Buys 30,000 Shares in May... Signals Strong Confidence

06/02/2025 12:38

NewtekOne Inc ($NEWT) Chairman Barry Sloane has been making notable moves in the stock market this year. In May 2025 alone, he purchased a total of 30,000 shares, investing approximately $330,000, and his aggressive buying spree since last year is sending strong signals to the market. Particularly noteworthy is the timing of Sloane's purchases. In September 2024, when the stock was trading around $11.77, he made a massive single purchase of 40,134 shares, investing $470,000. Even as the stock declined to the $10-11 range in May, he continued his large-scale buying. This goes beyond simple portfolio adjustment and demonstrates confidence in the company's future value. Newtek is a Florida-based regional financial services holding company founded in 1998, providing comprehensive financial solutions to small and medium businesses. The company's core competitive advantage lies in its integrated platform combining traditional banking services with cutting-edge technology. From deposit and lending services through Newtek Bank to payment processing, payroll management, and insurance brokerage, it offers one-stop services, differentiating itself particularly through cloud-based POS systems and 24/7 video support services. Financially, NewtekOne has shown consistent growth. 2024 revenue increased 25% year-over-year to $338.7 million, while net income rose 7.4% to $49.3 million. Recent quarterly earnings consistently beat analyst expectations. In Q1 2025, earnings per share of 35 cents met expectations, but revenue surged 94.1% to $113.12 million, significantly exceeding forecasts. One of the company's most impressive achievements is its deposit surge. Just two years after acquiring Newtek Bank in January 2023, deposits surpassed $1 billion, representing a 97% year-over-year increase. The loan portfolio also grew 33.1% to $1.5 billion, reflecting the success of digital account opening processes and technology innovations including US-based 24/7 video support. However, investors should carefully consider some areas of concern. The company's debt-to-equity ratio stands at a high 258%, and levered free cash flow is negative at -$401.36 million. While this reflects cash outflows from aggressive investment and expansion, it could pose liquidity management risks. The stock shows mixed signals. Starting at $12.76 in June 2024, it has declined about 15% to current levels around $10.85, though it's up 13.4% year-to-date. The three-year return of 43.5% has provided satisfactory performance for long-term investors. Industry experts are paying attention to NewtekOne's unique business model. Beyond being a simple regional bank, it has positioned itself as a comprehensive business solution provider, offering nearly all financial services SMBs need on a single platform. The efficiency ratio below 40% significantly outperforms industry averages, demonstrating operational efficiency. Current analyst consensus rates the stock as 'Hold' with a median price target of $13.00, suggesting about 20% upside potential from current levels. Particularly, Q2 and Q3 2025 earnings per share are projected to increase 18.6% and 37.8% respectively, raising expectations for profitability improvements. The key factor to watch is the Q2 earnings announcement scheduled for early August. Whether the company can achieve its annual EPS guidance of $2.10-2.50 and sustain growth momentum in deposits and loan portfolio will be critical focus areas.

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