NewtekOne Signals Long-Term Confidence Despite Q3 Revenue Miss
Company issues 2026 earnings guidance that brackets analyst estimates, overshadowing a 4.3% revenue shortfall and calming investor nerves ahead of its analyst day.
NewtekOne, Inc. (NASDAQ: NEWT) presented investors with a mixed financial picture on Tuesday, reporting third-quarter revenues that fell short of Wall Street expectations while simultaneously issuing multi-year earnings guidance that affirmed its long-term strategy, leading to a largely steady stock performance.
The financial services provider, which caters to small and medium-sized businesses (SMBs), posted quarterly revenue of $74.9 million, a 4.3% miss compared to the consensus analyst estimate of $78.3 million. However, the market's reaction was muted as the company used the occasion of its Investor Day to introduce a full-year 2026 earnings per share (EPS) forecast in the range of $2.15 to $2.55. This new projection brackets the current analyst consensus of approximately $2.35, signaling to investors that its underlying growth and profitability thesis remains intact.
Shares of NewtekOne showed little volatility on the news, trading near $11.93 in afternoon trading. The steady response suggests investors are weighing the company's long-term vision more heavily than a single quarter's revenue shortfall.
The announcement comes nearly two years after NewtekOne completed its strategic transformation from a Business Development Company (BDC) into a financial holding company through the acquisition of a national bank. The move, completed in January 2023, was designed to provide a more stable, lower-cost source of capital by allowing the company to hold deposits, a significant structural advantage over the traditional BDC model which relies on more expensive market-based funding.
This strategic pivot appears to be bearing fruit. Prior to the recent results, the company had been demonstrating progress in its new structure. In its third-quarter earnings call last year, NewtekOne reported that its net interest margin had expanded from 3.19% to 3.49% sequentially, a direct benefit of its lower cost of funds. The company is framing its Investor Day as a platform to further detail how this new model will drive value through 2026 and beyond.
From a valuation perspective, NewtekOne trades at approximately 5.1 times trailing earnings, a multiple that suggests the market may still be taking a "wait-and-see" approach to the company's transformation. The stock's price-to-book ratio stands at just under 1.0, often considered an attractive entry point by value-oriented investors. The company also offers a robust dividend yield of approximately 6.65%, a key component of its total return proposition for shareholders.
Despite the optimistic long-term view, the Q3 revenue miss highlights the persistent challenges facing its core clientele. As a provider of loans and business solutions to SMBs, NewtekOne's performance is intrinsically linked to the health of the broader economy. Inflationary pressures, higher interest rates, and uncertain consumer demand can all impact loan origination volumes and the credit quality of its portfolio.
Analysts currently reflect this balanced view, with a consensus "Hold" rating on the stock and an average 12-month price target of $15.10, according to data from Refinitiv. The bull case rests on the successful execution of its financial holding company strategy, leading to sustained margin expansion and the achievement of its 2026 EPS goals. The bear case centers on macroeconomic risks that could slow the growth of its small-business customers and, in turn, weigh on NewtekOne's top-line growth.
For now, management has successfully anchored the narrative to its long-term targets. Investors will be closely watching for consistent execution and evidence that the strategic shift can deliver a durable competitive advantage and predictable earnings growth through the economic cycle.