NEWT

NewtekOne ($NEWT) CEO Goes 'All-In' With $1.3M Purchases Over 18 Months—6x P/E Sets Up January Earnings Catalyst

01/16/2026 14:12

NewtekOne ($NEWT) management has purchased over $1.3 million worth of shares in the past 18 months with zero sales—a striking pattern of insider conviction. CEO and Chairman Barry Sloane's moves stand out most. When the stock dropped to $11.75 in September 2024, he bought $471,000 worth (40,134 shares) in a single transaction. In May 2025, as the price fell further to the $10-11 range, he added another 30,000 shares across three separate purchases. While the current price of $14.59 sits near the 52-week high of $14.68, management's concentrated buying at $10-12 suggests meaningful upside potential remains. NewtekOne is a small-cap regional bank holding company headquartered in Boca Raton, Florida, with a market cap of $421 million. It provides comprehensive financial services to small and medium-sized businesses, including SBA loans, commercial lending, electronic payment processing, insurance, payroll management, and technology solutions. Founded in 1999, the company has expanded across all 50 states and operates banking services through its subsidiary Newtek Bank. While relatively small within the regional banking sector, NewtekOne differentiates itself through specialized services for SMBs. A detailed analysis of insider trading data reveals management's conviction even more clearly. CFO Michael Price, Directors Gregory Zink, Richard Salute, and Craig Brunet, plus EVP Frank DeMaria—all purchased shares with zero sales. Across 68 buy transactions, there wasn't a single sell. This represents organizational-level positive signaling rather than individual judgment. Notably, the timing concentrated around September 2024 and May 2025, when shares traded at $11 and low-$10s respectively. With the stock now up over 45%, management's investment decisions have proven prescient. Financial performance shows consistent positive surprises. Q3 2025 EPS of $0.67 beat consensus of $0.63. Q2's $0.52 topped $0.50 estimates, Q1's $0.35 exceeded $0.34, and Q4 2024's $0.69 beat $0.66 expectations—four consecutive earnings beats. Revenue showed more volatility: Q3's $74.94 million missed $78.31 million estimates, but Q1 and Q4 significantly exceeded expectations at $113.12 million and $125.16 million respectively. On an annual basis, revenue surged from $105 million in 2022 to $237.74 million in 2024, reaching $380.36 million TTM—maintaining strong growth trajectory. Valuation remains deeply discounted even within the regional bank sector. The current P/E ratio of 6.51x is remarkably low, with forward P/E at just 4.90x. Based on the company's January 8, 2026 EPS guidance of $2.15-$2.55 (midpoint $2.35), forward P/E is approximately 6.2x. ROE of 17.74% is solid, profit margin reaches 15.59%, and dividend yield of 5.21% provides stable cash flow. This undervaluation likely stems from small-cap illiquidity and limited awareness, but given earnings momentum and insider buying, a revaluation appears probable. However, clear risks warrant attention. The biggest concern is surging loan loss provisions—$26.22 million in 2024 versus $11.70 million in 2023, more than doubling. This suggests deteriorating loan portfolio asset quality. Moreover, levered free cash flow is deeply negative at -$553.56 million, raising questions about cash generation capability. Debt-to-equity of 194.17% is elevated. While leverage is inherent to banking, it becomes a vulnerability if the credit cycle deteriorates. Institutional investor positioning shows mixed signals. As of Q2 2025, 75 institutions increased positions while 58 decreased. AQR Capital increased by 111.5%, Marshall Wace by 42.9%, and UBS Group by 276.1%. Conversely, Royce & Associates reduced by 35.1% and Wellington Management sold out entirely. This suggests some large institutions lack conviction in small-cap bank stocks or are rebalancing portfolios. Insiders, meanwhile, used these institutional selling points as buying opportunities. Analyst opinions remain largely neutral. Piper Sandler raised its price target from $12.50 to $13.00 but maintained a Neutral rating. Keefe Bruyette & Woods set a $13.00 target. The consensus 1-year target of $16.60 implies about 14% upside. However, with shares already near 52-week highs and above most analyst targets, near-term upside may be limited. The company recently strengthened its capital structure. In Q3 2025, it raised $30 million in CET1 capital and $80 million in Tier 1 capital, and refinanced a borrowing facility with Goldman Sachs for $95 million. It plans a fourth securitization of Alternative Loan Program (ALP) loans in Q4 2025. The company also expanded digital banking services, opening over 21,000 new accounts—a strategy to broaden low-cost deposit bases and improve net interest margin. The key investment decision hinges on Q4 results due January 29, 2026. The company's 2026 EPS guidance of $2.15-$2.55 represents an 11-32% increase versus 2025's estimated $1.93. If Q4 results approach the high end and 2026 outlook remains positive, the current 6x P/E valuation could be reassessed as excessively low. Conversely, if loan loss provisions increase further or net interest margin faces pressure, shares could face another correction. Concrete scenarios: In a bull case, Q4 EPS exceeds $0.75 and 2026 guidance is raised, potentially driving shares to $17-18 (7-8x P/E). The base case sees midpoint guidance met, with shares stabilizing in the $15-16 range. In a bear case, credit losses exceed expectations and net interest margin compresses, pushing shares back to $12-13. Given the CEO's heavy buying at $10-12, that range likely represents strong support. Near-term over 1-3 months, volatility will likely increase ahead of the January 29 earnings release. If results meet expectations, shares could attempt $16-17, but disappointment could trigger a pullback to $13. Medium-term over 6+ months, Fed policy and SMB loan demand are critical variables. If the Fed cuts rates further in 2026 and recession is avoided, loan growth and margin improvement could drive shares to $18-20. However, if recession materializes, surging credit losses could push shares back to low-$10s. In conclusion, NewtekOne presents an intriguing investment opportunity combining overwhelming insider buying, consistent earnings beats, and a 6x P/E valuation. Over $1.3 million in insider purchases with zero sales strongly suggests management views shares as deeply undervalued. The CEO's heavy buying at $10-12 indicates that range represents compelling value. However, surging loan loss provisions, negative free cash flow, and high leverage demand caution. The January 29 earnings release will be the key near-term catalyst. For long-term investors, any pullback to the CEO's buying range near $12 merits consideration for accumulation. At current levels, waiting for earnings clarity is the prudent approach.