| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 26.27 | n/a |
| Intrinsic value (DCF) | 183.83 | n/a |
| Graham-Dodd Method | 21.24 | n/a |
| Graham Formula | 67.27 | n/a |
NewtekOne, Inc. (NASDAQ: NEWTZ) 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 Asset Management, providing tailored financial products to small and medium-sized businesses (SMBs). The company’s integrated approach combines banking, lending, payments, and technology services, positioning it as a one-stop financial solutions provider. With a market capitalization of approximately $284 million and a strong revenue base of $237.7 million (FY 2024), NewtekOne leverages its multi-brand strategy to enhance cross-selling opportunities and customer retention. Its 5.50% Notes Due 2026 reflect its structured debt financing strategy, balancing growth with capital management. NewtekOne’s focus on SMBs aligns with the growing demand for specialized financial services in a digitally evolving economy.
NewtekOne presents a mixed investment profile. On the positive side, the company demonstrates a diversified revenue model with strong cross-selling potential across its financial services brands, supported by a net income of $50.9 million and diluted EPS of $1.96 (FY 2024). Its 5.50% Notes Due 2026 offer fixed-income appeal, though investors should note the negative operating cash flow of -$153 million, which may signal liquidity pressures. The company’s low beta (0.02) suggests minimal correlation with broader market volatility, appealing to risk-averse investors. However, high total debt ($714.5 million) against cash reserves ($353.1 million) raises leverage concerns. The dividend yield (based on $1.375 per share) may attract income-focused investors, but sustainability depends on improving cash flow. Sector tailwinds from SMB financial digitization could drive growth, but competition from fintech disruptors remains a risk.
NewtekOne’s competitive advantage lies in its vertically integrated financial services platform, which allows it to serve SMBs with a bundled suite of banking, lending, and technology solutions. Unlike pure-play lenders or payment processors, NewtekOne’s multi-brand strategy fosters customer stickiness and reduces acquisition costs. Its niche focus on SMBs differentiates it from larger financial institutions that prioritize corporate clients. However, the company faces stiff competition from fintech firms (e.g., Square, PayPal) that offer agile, tech-driven solutions, as well as traditional banks expanding into SMB lending. NewtekOne’s scale is modest compared to major competitors, limiting its ability to compete on pricing or innovation spend. Its hybrid model—combining a bank charter (Newtek Bank) with non-bank services—provides regulatory flexibility but also complexity. The company’s competitive positioning hinges on execution in cross-selling and maintaining underwriting discipline in its lending segment. While its diversified revenue streams mitigate single-product risk, its smaller size may hinder bargaining power with partners or vendors.