Potential Short Squeeze Target: $FOA – The #1 Reverse Mortgage King at 5 P/E | Reddit — r/pennystocks Ideas & AI Summary

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Author pitches Finance of America (FOA) as a deeply undervalued, profitable reverse-mortgage leader with a near-term short-squeeze setup and a $170–$200 personal price target.

FOA — LONG The author argues Finance of America (FOA) is deeply undervalued at a ~5 P/E given 2026 guidance of $4.25 diluted adjusted EPS and $8.00 basic EPS, with upside to $6.00 diluted EPS if mortgage bond spreads tighten. He sees a near-term short squeeze because the float is only ~1.2M shares while open-market short interest is ~900,000 shares, and the last large seller, Reza Jahangiri, has fewer than 20,000 shares left after Schedule 13D/A selling. The catalyst is exhaustion of that sell pressure plus locked founder convertible/exchangeable notes, leaving shorts without shares to cover; he personally values the stock at $170–$200.

I personally believe this is a $170 - $200 stock. Mortgage accounting often undervalues actual net income by 2/3. This company earns $80M in operating profit per quarter, yet it's valued at a $430M market cap. Does that make sense?

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**Finance of America ($FOA)** is the #1 reverse mortgage player in the U.S. With a market cap of around $430M, it is insanely undervalued right now. This is a total deep value play.

Look at the peers: Offerpad ($OPAD) and Opendoor ($OPEN) are pumping, but they are still burning cash. **FOA is already profitable.**

**The Insane Math:**

* **2026 Guidance:** Diluted Adjusted EPS of **$4.25** and a Basic EPS of **$8.00**.
* **Valuation:** We are looking at a market leader trading at a **P/E of 5**. This is absolute madness.
* **The Upside:** If mortgage bond spreads tighten, diluted EPS will jump to **$6.00** (this is confirmed in their official filings).

**The Short Squeeze Catalyst:**

* **Supply Crunch:** The convertible and exchangeable notes are held by the founder. They are locked and won't hit the open market.
* **The Last Seller is Out:** The only major sell pressure came from a large shareholder, Reza Jahangiri. Based on the latest **Schedule 13D/A** filings and daily volume (targeting 6% of daily volume), he has less than **20,000 shares** left.
* **The Setup:** The float is around **1.2M shares**, but the short interest in the open market is sitting at **900,000 shares**.
* **The Logic:** Shorts piled in because they followed Reza’s selling. Now that his selling is finished, who is going to provide the shares for the shorts to cover?

**Who is holding?** Legendary investors like **Leon Cooperman** and **John Paulson** have average prices between **$39 and $44**. The remaining units (FOAEC) cannot be sold until March due to shareholder meeting requirements. There is **ZERO** sell-off pressure for the next few months.

I personally believe this is a **$170 - $200** stock. Mortgage accounting often undervalues actual net income by 2/3. This company earns **$80M in operating profit per quarter**, yet it's valued at a $430M market cap. Does that make sense?

The "Quant bots" are almost out of ammo. The moment the last 20,000 shares are gone, this is going to orbit.

**Get in before the squeeze. Don't say I didn't warn you.**

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u/AccomplishedBox9757 Reddit r/pennystocks

Deeply undervalued FOA with near-term short squeeze and $170–$200 target.

The author argues Finance of America (FOA) is deeply undervalued at a ~5 P/E given 2026 guidance of $4.25 diluted adjusted EPS and $8.00 basic EPS, with upside to $6.00 diluted EPS if mortgage bond spreads tighten. He sees a near-term short squeeze because the float is only ~1.2M shares while open-market short interest is ~900,000 shares, and the last large seller, Reza Jahangiri, has fewer than 20,000 shares left after Schedule 13D/A selling. The catalyst is exhaustion of that sell pressure plus locked founder convertible/exchangeable notes, leaving shorts without shares to cover; he personally values the stock at $170–$200.

Potential Short Squeeze Target: $FOA – The #1 Reverse Mortgage King at 5 P/E

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