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

Shares of OneMain Holdings, Inc. OMF have gained 17.8% in the past six months, outperforming the S&P 500 Index’s 14.8% growth. The industry to which the stock belongs has rallied 29.6% in six months’ time.OMF has performed better than its peers, Ally Financial ALLY and Navient Corporation NAVI. ALLY stock has moved up 13.2%, whereas shares of Navient have lost 10.2% in the same time frame.6-Month Price PerformanceImage Source: Zacks Investment ResearchDoes OMF stock have more upside left despite recent strength in share price? Let us find out.What’s Driving OneMain Holdings’ Performance?Diversified Product Base & Revenue Strength: Driven by growth in net interest income (NII), OneMain Holdings’ revenues have witnessed a five-year (2019-2024) compound annual growth rate (CAGR) of 3.6%, with the upward momentum continuing in the first nine months of 2025. Supported by its loan mix of Front Book and Back Book, the company aims for revenue sustainability while maintaining upside potential in a rapidly changing macroeconomic environment.In order to increase its margins, OMF aims to reduce Back Book over time. The company’s auto finance capabilities have strengthened with the acquisition of Foursight. Thus, OMF is expected to witness continued growth in the top line, given its efforts to grow credit cards and auto finance businesses, along with its diversified product base.Revenue GrowthImage Source: Zacks Investment ResearchDecent Balance Sheet Position: As of Sept. 30, 2025, OneMain Holdings had total debt (comprising long-term debt and other liabilities) of $23 billion, and cash and cash equivalents of $1.4 billion. The company has multiple revolving secured lines of credit facilities and credit card revolving VFN facilities. Thus, despite a high debt burden, OMF will be able to address its near-term debt obligations even if the economic scenario worsens.Given its relationship-driven business model and a decent balance sheet and capital position, the company has been able to boost investor confidence with efficient capital deployment activities. In 2019, OMF announced a dividend for the first time. Since then, it has hiked its dividend eight times, with the latest hike of 1% announced in October 2025.Its board of directors have approved a new $1.0 billion share repurchase program, which will remain in effect until Dec. 31, 2028. The plan replaces the prior authorization, which had $556.4 million remaining as of Sept. 30, 2025.Attractive Return on Equity (ROE): OneMain Holdings’ profitability metrics compare favorably to those of its peers. The company’s trailing 12-month return on equity stands at 22.70%, outpacing the industry average of 11.41%.In comparison, Ally Financial has an ROE of 9.96%, while Navient’s ROE stands at 4.12%. The higher ROE is a testament to OMF’s ability to deploy capital efficiently and underscores its long-term value creation potential for investors.Return on EquityImage Source: Zacks Investment ResearchWhat’s Hurting OMF’s Growth?Rising Expense Base: OneMain Holdings has been witnessing a continuous increase in expenses. Total other expenses witnessed a CAGR of 3% over the last five years (2019-2024), with the uptrend persisting during the first nine months of 2025. The increase has been mainly due to a rise in salaries and benefits and other operating expenses.Overall expenses are likely to remain elevated in the near term owing to the company’s continued efforts to invest in new products and capabilities to enhance customer experience and strengthen its competitive positioning.Expense TrendImage Source: Zacks Investment ResearchWeak Asset Quality: OneMain Holdings’ provision for finance receivable losses witnessed a CAGR of 9.1% over the five years ended 2024, outpacing the net finance receivable CAGR of 5.4% over the same period. This indicates underwriting concerns for the company.Also, the company’s allowance ratio has consistently increased over the past five years, except in 2021 and 2024. Provisions rose in the first nine months of 2025 on a year-over-year basis. Given the rise in loan balances amid a challenging macroeconomic environment, provisions and allowance ratios are expected to remain elevated in the near term, hurting growth.Does OMF Stock Deserve a Place in Your Portfolio?OneMain Holdings is well-positioned for top-line expansion, supported by a diverse product base, its efforts to grow credit card and auto finance businesses, along with decent loan demand. A higher ROE compared with the industry signifies that the company utilizes cash more efficiently than its peers.Analysts seem optimistic regarding the company’s earnings growth potential. Over the past 30 days, the Zacks Consensus Estimate for OMF’s 2025 and 2026 earnings has been revised higher.Earnings EstimateImage Source: Zacks Investment ResearchHowever, increasing expenses because of the company’s investments in new products and capabilities will likely hurt the bottom line to an extent. Also, poor asset quality may hamper growth.Thus, investors should not rush to buy the stock now. Those who already own the stock in their portfolios can hold on to it because it is less likely to disappoint over the long term.Currently, OneMain Holdings carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ally Financial Inc. (ALLY): Free Stock Analysis Report Navient Corporation (NAVI): Free Stock Analysis Report OneMain Holdings, Inc. (OMF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks