Nationstar Mortgage Holdings (NSM) took a beating Thursday, dropping more than 20% after posting declining revenue for the third quarter.

The stock was up 4% at 1 p.m. ET.

Friday, though, Wells Fargo (WFC) took a second look and they’ve upgraded their recommendation from sell, moving it up from underperform to “market perform" because they know that despite the challenges, this may be the bottom. In the long term, Nationstar is still picking up MSRs, and few other institutions could handle -- or want to handle -- MSRs. 

All of the nonbanks have faced a challenging year for a variety of reasons, but Nationstar has weathered the worst of its storms without facing the additional headwinds similar nonbanks like Ocwen Financial (OCN) have. 

Further, the third quarter looks more like an anomaly. Nationstar reported quarterly net income of $67 million, or $0.74 per share, for the second quarter, a 174% increase over the $24 million or $0.27 per share in the first quarter 2014.

And in the bigger picture, the value of loans handled by Nationstar, the second-biggest non-bank mortgage servicer, has tripled since the firm’s initial public offering in March 2012. 

Thursday Nationstar’s stock was down 26.58%. The company recorded revenue of $504.3 million, down 20.2% year-over-year, but beating Wall Street estimates by $134.4 million in the third quarter.

Lost in the fray, Wells seems to think, was that Nationstar entered into commitments to acquire $43 billion of new servicing acquisitions, and closed on $16 billion in the third quarter, with the expectation of closing the remaining $27 billion by first quarter 2015.

“Fundamentally, we are very aligned with regulators," said CEO Jay Bray on the earnings call. "There's probably not a financial institution in America that wants to service defaulted loans," adds Bray, summing up in a sentence the bull case for the nonbank servicers.