| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 26.32 | 4 |
| Intrinsic value (DCF) | 183.90 | 626 |
| Graham-Dodd Method | 21.24 | -16 |
| Graham Formula | 67.27 | 166 |
NewtekOne, Inc. (NASDAQ: NEWTG) is a financial holding company offering a diversified suite of business and financial solutions under its well-established brands, including Newtek Bank, Newtek Lending, Newtek Payments, Newtek Insurance, Newtek Payroll, and Newtek Technology. Founded in 1998 and headquartered in Boca Raton, Florida, NewtekOne operates in the Financial Services sector, specifically within Rental & Leasing Services. The company provides tailored financial products and services to small and medium-sized businesses (SMBs), leveraging its integrated ecosystem to deliver lending, banking, insurance, payroll, and technology solutions. With a market capitalization of approximately $280 million and a strong revenue base of $333.5 million (FY 2024), NewtekOne is positioned as a niche player in the SMB financial services space. Its 8.50% Fixed Rate Senior Notes due 2029 reflect its capital structure strategy, balancing debt financing with operational growth. The company’s diversified revenue streams and focus on SMBs make it a relevant player in a competitive financial services landscape.
NewtekOne presents a mixed investment profile. On the positive side, the company operates in the resilient SMB financial services sector, with diversified revenue streams and a strong brand portfolio. Its diluted EPS of $1.96 and dividend yield (based on a $1.0625 dividend per share) may appeal to income-focused investors. However, risks include a high total debt load of $1.69 billion, negative operating cash flow (-$4.66 million), and a low beta (0.04), suggesting limited correlation with broader market movements. The company’s niche focus on SMBs could be both a strength and a vulnerability, depending on economic conditions affecting small businesses. Investors should weigh the attractive yield against leverage and cash flow concerns.
NewtekOne’s competitive advantage lies in its integrated financial services ecosystem tailored for SMBs, combining lending, banking, payments, and technology under one umbrella. This vertical integration allows cross-selling opportunities and customer retention. However, the company faces intense competition from larger financial institutions and fintech disruptors. Its niche focus on SMBs differentiates it from broad-based banks but also limits scalability compared to peers with larger customer bases. The company’s high debt load could constrain financial flexibility relative to competitors with stronger balance sheets. NewtekOne’s ability to maintain its 8.50% fixed-rate notes suggests investor confidence in its business model, but its negative operating cash flow raises questions about sustainable profitability. The competitive landscape requires NewtekOne to continuously innovate in fintech solutions to retain its edge against digital-first lenders and payment processors.