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AGNC Investment (AGNC)
NASDAQ:AGNC
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AGNC Investment (AGNC) AI Stock Analysis

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AGNC

AGNC Investment

(NASDAQ:AGNC)

Rating:67Neutral
Price Target:
$10.50
▲(6.28% Upside)
AGNC's overall stock score reflects strong technical momentum and attractive dividend yield. However, the high leverage and mixed earnings outlook pose risks to financial stability. The company's strategic initiatives and liquidity position offer potential for improvement.
Positive Factors
Dividend Yield
AGNC's dividend yield is an attractive 17.0% at the current stock price.
Financial Stability
Liquidity remains strong with significant cash and unencumbered assets, providing a solid base for financial stability.
Investment Outlook
Management is optimistic about the prospects for Agency Mortgage Backed Securities, seeing them as offering a compelling return opportunity.
Negative Factors
Financial Volatility
Tariff-driven uncertainty led to a pickup in financial volatility including widening agency MBS spreads, negatively affecting book value.
Interest Rate Volatility
Interest rate volatility is a concern, negatively impacting TBV/share.
Tangible Book Value
Tangible book value (TBV) was down 1.9% to $8.25, missing the pre-announcement estimate of $8.45.

AGNC Investment (AGNC) vs. SPDR S&P 500 ETF (SPY)

AGNC Investment Business Overview & Revenue Model

Company DescriptionAGNC Investment Corp. (AGNC) is a real estate investment trust (REIT) that primarily focuses on investing in agency mortgage-backed securities (MBS) on a leveraged basis. Based in Bethesda, Maryland, the company operates within the financial sector, specifically in the mortgage finance industry. AGNC seeks to provide attractive risk-adjusted returns to its shareholders through a combination of dividends and capital appreciation, utilizing its expertise in managing a portfolio of MBS backed by government-sponsored entities.
How the Company Makes MoneyAGNC generates revenue primarily through the interest income earned on its investment portfolio, which consists mainly of agency mortgage-backed securities. The company employs a leveraged investment strategy, borrowing funds at lower interest rates to purchase MBS, which typically offer higher yields. This interest rate spread, or net interest income, constitutes a significant portion of AGNC's revenue. Additionally, AGNC may engage in hedging activities to manage interest rate risk and may also earn income from sales of securities or from capital appreciation of its portfolio. The company pays out a substantial portion of its earnings as dividends to shareholders, which is a key aspect of its investment appeal. Factors contributing to its earnings include prevailing interest rates, the performance of the housing market, and the overall economic environment.

AGNC Investment Earnings Call Summary

Earnings Call Date:Jul 21, 2025
(Q2-2025)
|
% Change Since: 8.45%|
Next Earnings Date:Oct 27, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted AGNC's strong liquidity position and accretive capital raising, which provided stability and future growth opportunities. However, the call also acknowledged challenges such as a decline in economic returns and wider Agency MBS spreads. The positive outlook for Agency MBS, supported by favorable policy developments, was tempered by immediate financial performance concerns.
Q2-2025 Updates
Positive Updates
Strong Liquidity Position
AGNC maintained a strong liquidity position with $6.4 billion in cash and unencumbered Agency MBS, representing 65% of tangible equity, up from 63% in the previous quarter.
Positive Developments in Agency MBS Market
Key policymakers reaffirmed the implicit guarantees for Agency MBS and indicated a cautious approach to GSE reform, improving the outlook for Agency mortgage-backed securities.
Accretive Capital Raising
AGNC opportunistically raised nearly $800 million of common equity at a significant premium to tangible net book value, enhancing liquidity and investment capacity.
Negative Updates
Economic Return Decline
AGNC reported a comprehensive loss of $0.13 per common share and a negative 1% economic return on tangible common equity for the quarter.
Decline in Net Spread and Dollar Roll Income
Net spread and dollar roll income decreased $0.06 to $0.38 per common share, primarily due to the timing of new capital deployment and increased swap costs.
Wider Agency MBS Spreads
Agency mortgage-backed securities underperformed, ending the quarter with wider spreads to treasury and swap benchmarks, affecting economic returns.
Company Guidance
During AGNC Investment Corp.'s second-quarter 2025 earnings call, the company provided a comprehensive overview of its financial performance and strategic outlook. AGNC reported a comprehensive loss of $0.13 per common share and an economic return on tangible common equity of negative 1%, which included $0.36 of dividends declared per common share and a $0.44 decline in tangible net book value per share due to wider mortgage spreads. The company's leverage slightly increased to 7.6x tangible equity, with average leverage rising to 7.5x. AGNC maintained a strong liquidity position, totaling $6.4 billion in cash and unencumbered Agency MBS, representing 65% of tangible equity. The company raised nearly $800 million in common equity during the quarter, deploying slightly less than half of the proceeds by quarter-end. AGNC's net spread and dollar roll income declined to $0.38 per common share, partly due to the timing of new capital deployment and moderately higher swap costs. The portfolio's average projected life CPR decreased to 7.8% due to higher mortgage rates. Looking ahead, AGNC expressed a favorable outlook for Agency MBS, citing manageable supply levels, anticipated regulatory changes, and stabilizing agency spreads, all of which create a promising investment environment.

AGNC Investment Financial Statement Overview

Summary
AGNC's financial performance shows mixed results. Strong gross profit and EBIT margins indicate efficient cost management, but high leverage and low equity ratio pose financial stability risks. Cash flow is improving, but maintaining liquidity and managing debt are critical.
Income Statement
65
Positive
AGNC's income statement shows a mixed performance. The gross profit margin is strong at 97.77% TTM, indicating efficient cost management. However, the net profit margin is relatively low at 4.36% TTM, reflecting significant expenses impacting the bottom line. Revenue growth has been volatile, with a notable drop in 2024 compared to 2023. EBIT and EBITDA margins are robust, with the EBIT margin at 241.78% TTM, showcasing operational efficiency despite revenue challenges.
Balance Sheet
55
Neutral
The balance sheet reveals a high debt-to-equity ratio of 8.30 TTM, indicating significant leverage, which could pose a risk if not managed carefully. The equity ratio is relatively low at 10.47% TTM, suggesting limited equity financing. Return on equity is modest at 4.68% TTM, reflecting limited returns generated on shareholder equity. Overall, the balance sheet highlights the importance of managing leverage and improving equity positions.
Cash Flow
70
Positive
AGNC's cash flow statement displays a solid free cash flow growth rate, with a substantial increase to $258 million TTM from $86 million previously. The operating cash flow to net income ratio is 0.55 TTM, indicating a moderate conversion of income to cash. The free cash flow to net income ratio is also 0.55 TTM, suggesting a balanced cash management approach. The cash flow performance is strong, but continued focus on cash efficiency is necessary.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.57B973.00M251.00M-1.12B837.00M-173.00M
Gross Profit584.00M973.00M251.00M2.48B749.00M-439.00M
EBITDA3.47B3.92B2.59B2.40B749.00M0.00
Net Income470.00M863.00M155.00M-1.19B749.00M-266.00M
Balance Sheet
Total Assets95.89B88.02B71.60B51.75B68.15B81.82B
Cash, Cash Equivalents and Short-Term Investments1.36B505.00M518.00M1.02B998.00M1.02B
Total Debt83.38B64.00M80.00M95.00M126.00M177.00M
Total Liabilities85.85B78.25B63.34B43.88B57.86B70.74B
Stockholders Equity10.04B9.76B8.26B7.87B10.29B11.08B
Cash Flow
Free Cash Flow258.00M86.00M-118.00M1.01B1.54B1.75B
Operating Cash Flow258.00M86.00M-118.00M1.01B1.54B1.75B
Investing Cash Flow-17.48B-11.17B-14.67B11.19B3.84B36.52B
Financing Cash Flow17.07B11.08B14.23B-11.39B-6.17B-37.23B

AGNC Investment Technical Analysis

Technical Analysis Sentiment
Positive
Last Price9.88
Price Trends
50DMA
9.33
Positive
100DMA
8.92
Positive
200DMA
8.95
Positive
Market Momentum
MACD
0.11
Negative
RSI
66.31
Neutral
STOCH
90.26
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGNC, the sentiment is Positive. The current price of 9.88 is above the 20-day moving average (MA) of 9.56, above the 50-day MA of 9.33, and above the 200-day MA of 8.95, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 66.31 is Neutral, neither overbought nor oversold. The STOCH value of 90.26 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AGNC.

AGNC Investment Risk Analysis

AGNC Investment disclosed 44 risk factors in its most recent earnings report. AGNC Investment reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

AGNC Investment Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$2.27B13.407.09%12.34%-17.43%-37.71%
69
Neutral
$7.43B18.625.73%9.48%-15.07%-1.00%
68
Neutral
$6.66B9.7210.13%7.96%26.69%9.10%
67
Neutral
$10.29B30.433.98%14.57%-18.28%-10.62%
63
Neutral
$3.35B-0.33%9.63%-19.20%92.16%
63
Neutral
$7.06B13.64-0.57%7.01%3.62%-22.63%
62
Neutral
$13.57B21.035.94%12.78%2.28%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AGNC
AGNC Investment
9.88
1.00
11.26%
NLY
Annaly Capital
21.13
3.60
20.54%
ABR
Arbor Realty
11.83
-0.17
-1.42%
BXMT
Blackstone Mortgage
19.52
2.99
18.09%
RITM
Rithm Capital
12.56
1.96
18.49%
STWD
Starwood Property
20.25
1.60
8.58%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 24, 2025