OneMain Holdings Gains 17.8% in 6 Months: How to Play The Stock Now?

Core Insights - OneMain Holdings, Inc. (OMF) shares have increased by 17.8% over the past six months, outperforming the S&P 500 Index's growth of 14.8% and the industry average of 29.6% [1][7] - OMF's performance is superior to peers such as Ally Financial (ALLY), which rose by 13.2%, and Navient Corporation (NAVI), which declined by 10.2% [1] Revenue Growth - OneMain Holdings has experienced a compound annual growth rate (CAGR) of 3.6% in revenues from 2019 to 2024, driven by growth in net interest income (NII) [4] - The company aims to sustain revenue growth through a diversified product base and a strategic loan mix [4][5] - Revenue estimates for the current quarter (12/2025) are projected at $1.07 billion, with a year-over-year growth estimate of 6.36% [8] Financial Position - As of September 30, 2025, OneMain Holdings had total debt of $23 billion and cash and cash equivalents of $1.4 billion, indicating a decent balance sheet position [8] - The company has a trailing 12-month return on equity (ROE) of 22.70%, significantly higher than the industry average of 11.41% [10][11] Challenges - OneMain Holdings faces rising expenses, with total other expenses showing a CAGR of 3% over the last five years, primarily due to increased salaries and benefits [15] - The company's provision for finance receivable losses has a CAGR of 9.1%, indicating potential underwriting concerns [18] Future Outlook - Analysts are optimistic about OneMain Holdings' earnings growth potential, with recent upward revisions in earnings estimates for 2025 and 2026 [21] - The company is well-positioned for top-line expansion, supported by its diverse product offerings and efforts to grow its credit card and auto finance businesses [20]