Finance of America Companies dropped about 6% today, extending a rough month for the stock, even though the headline story out of Q2 is not simple disappointment. The market is reacting to another quarter with a GAAP loss, yet the core engine of the business is telling a different story.

The key issue this time is the earnings gap between cash generation and reported profit. Management is pointing to US$58 million of Q2 cash flow from originations and capital markets and reaffirmed full year adjusted earnings guidance of US$4.50 to US$5.00 per share. Your call now is how much weight to give those adjusted figures over the noisy GAAP line.

Is Finance of America Companies a genuine low P/S opportunity, or is the earnings volatility a…