Is It Time To Reassess OneMain Holdings (OMF) After Strong Three Year Share Price Gains?

Simply Wall St.01-15

If you are wondering whether OneMain Holdings is still fairly priced or starting to look interesting, you will want to look past the headline share price and focus on what the underlying valuation ...

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The stock recently closed at US$66.10, with returns of a 6.0% decline over 7 days, a 1.6% decline over 30 days, a 4.3% decline year to date, but a 31.0% gain over 1 year and a 120.0% gain over 3 years, which raises questions about how the current price lines up with the business fundamentals. Recent news coverage around consumer credit conditions, funding costs for lenders, and regulatory attention on personal lending has given investors more to think about when it comes to specialist finance companies like OneMain Holdings. These themes often influence how the market views risk in the sector, which can feed into both short term share price moves and how investors judge what counts as a fair valuation. Simply Wall St currently gives OneMain Holdings a valuation score of 2 out of 6, based on how many checks suggest the stock is undervalued. Next, we will walk through the main valuation approaches that feed into this score and then finish with a way of looking at valuation that goes beyond the usual models.  OneMain Holdings scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown. AdvertisementApproach 1: OneMain Holdings Excess Returns Analysis The Excess Returns model looks at how much profit a company is expected to earn above its required cost of equity, and then capitalises those “extra” returns to estimate what the business might be worth today. For OneMain Holdings, the starting point is a Book Value of $28.54 per share and a Stable EPS estimate of $6.71 per share, based on the median return on equity from the past 5 years. The model applies a Cost of Equity of $4.16 per share, which implies an Excess Return of $2.55 per share. In other words, the company is expected to earn more than its equity cost on a per share basis. This is anchored by an Average Return on Equity of 20.18% and a Stable Book Value estimate of $33.24 per share, sourced from weighted future book value estimates from 5 analysts. Putting these inputs together, the Excess Returns model produces an intrinsic value of about $60.88 per share, compared with a recent share price of $66.10, implying the stock is around 8.6% overvalued. Result: ABOUT RIGHT OneMain Holdings is fairly valued according to our Excess Returns, but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act. OMF Discounted Cash Flow as at Jan 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for OneMain Holdings. Approach 2: OneMain Holdings Price vs Earnings For a profitable lender like OneMain Holdings, the P/E ratio is a useful way to gauge what the market is willing to pay for each dollar of earnings. It ties the share price directly to current profits, which many investors watch closely for established, income generating businesses. What counts as a “normal” P/E depends a lot on growth expectations and risk. Higher expected earnings growth or more resilient profit streams can justify a higher multiple, while higher risk or more volatile earnings often come with a lower P/E. OneMain Holdings currently trades on a P/E of 11.04x. That sits above the Consumer Finance industry average of 9.01x but below the peer group average of 13.95x. Simply Wall St’s Fair Ratio for the stock is 16.96x, which is a proprietary estimate of what P/E might make sense once you factor in earnings growth characteristics, industry, profit margin, market cap and specific risks. This Fair Ratio aims to be more tailored than a simple comparison with peers or the broad industry, because it adjusts for the company’s own profile rather than assuming all lenders deserve the same multiple. With the actual P/E at 11.04x and the Fair Ratio at 16.96x, the shares screen as undervalued on this metric. Result: UNDERVALUED NYSE:OMF P/E Ratio as at Jan 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1441 companies where insiders are betting big on explosive growth. Upgrade Your Decision Making: Choose your OneMain Holdings Narrative Earlier we mentioned that there is an even better way to understand valuation. Let us introduce Narratives, a simple tool on Simply Wall St’s Community page that lets you spell out your story for OneMain Holdings. You can link your assumptions on future revenue, earnings, margins and fair value to that story, compare the resulting Fair Value to the current share price to decide whether the stock looks attractive or stretched, and then see that view update automatically as new news or earnings arrive. One investor might build a Narrative around the higher analyst target of US$74 with stronger confidence in credit discipline and capital returns, while another might anchor closer to US$56 with a more cautious view on non prime credit risk and funding costs. Both can clearly see how their different stories lead to different fair values and decisions. Do you think there's more to the story for OneMain Holdings? Head over to our Community to see what others are saying! NYSE:OMF Earnings & Revenue History as at Jan 2026  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: AI Stock Screener & AlertsOur new AI Stock Screener scans the market every day to uncover opportunities.• Dividend Powerhouses (3%+ Yield)• Undervalued Small Caps with Insider Buying• High growth Tech and AI CompaniesOr build your own from over 50 metrics.Explore Now for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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