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Angel Oak Mortgage (AOMR)
NYSE:AOMR
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Angel Oak Mortgage
(NYSE:AOMR)
48Neutral
Positive Factors
Dividend
Management expects net interest income to grow each quarter in '25, supporting the current dividend.
Earnings
Angel Oak reported distributable EPS of $0.42, above the estimate of $0.27.
Market Position
AOMR is attractively positioned as a leader in the non-QM space, which is expected to experience exponential growth over the next several years.
Negative Factors
Financial Performance
GAAP book value decreased by 10% quarter-over-quarter due to spread widening.
Liquidity
A yield premium is necessary for AOMR due to its lower stock liquidity and more concentrated model/strategy compared to bigger names.
Valuation
Valuation depressed as shareholder base transitions.
Angel Oak Mortgage (AOMR) vs. S&P 500 (SPY)
Market Cap
$198.11M
Dividend Yield15.18%
Average Volume (3M)141.29K
Price to Earnings (P/E)7.2
Beta (1Y)0.59
Revenue Growth73.21%
EPS Growth-13.73%
CountryUS
Employees300
SectorReal Estate
Sector Strength74
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)1.15
Shares Outstanding23,500,175
10 Day Avg. Volume92,677
30 Day Avg. Volume141,287
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.41
Price to Cash Flow (P/CF)-0.30
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$11.58Price Target Upside47.52% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Angel Oak Mortgage Business Overview & Revenue Model
Company DescriptionAngel Oak Mortgage, Inc., a real estate finance company, focuses on acquiring and investing in first lien non- qualified mortgage loans and other mortgage-related assets in the United States mortgage market. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Angel Oak Mortgage, Inc. was incorporated in 2018 and is headquartered in Atlanta, Georgia.
How the Company Makes MoneyAngel Oak Mortgage generates revenue primarily through the interest income earned on its portfolio of non-QM loans and other mortgage-related assets. The company acquires these loans typically at a discount, allowing it to profit from the spread between the acquisition cost and the interest income received. Additionally, AOMR might engage in securitization, where they pool these loans and sell them as mortgage-backed securities to investors, earning fees and potentially retaining some interest in the securitized assets. Strategic partnerships with mortgage originators and financial institutions enhance its acquisition pipeline and investment opportunities, contributing significantly to its earnings.
Angel Oak Mortgage Financial Statement Overview
Summary
Angel Oak Mortgage's financial performance is concerning due to instability in revenue generation, high leverage, and negative cash flows. While improved net profit margins and reasonable liquidity are positives, the overall financial health indicates potential risks.Income Statement
Angel Oak Mortgage's income statement shows significant volatility. The company experienced negative revenue growth in 2022 followed by a sharp recovery in 2023, but then zero revenue in 2024, indicating instability in revenue generation. The net profit margin improved in 2024, which is a positive sign, but overall, the margins have been inconsistent over the years.42
Neutral
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio, indicating potential risk due to substantial leverage. Equity has decreased over time, reducing the equity ratio. However, the company has maintained a reasonable level of cash and short-term investments, which provides some liquidity cushion.45
Neutral
Cash Flow
Angel Oak Mortgage's cash flow statement exhibits significant negative operating and free cash flows in recent years, reflecting potential liquidity challenges. The operating cash flow to net income ratio is negative, showing inefficiencies in converting income into cash. Despite past positive free cash flow, recent trends are concerning.35
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 51.46M | 54.86M | -157.95M | 41.76M | 10.38M | Gross Profit |
| 51.46M | 42.49M | -162.42M | 36.38M | 2.48M | EBIT |
| 45.45M | 34.96M | -128.27M | 22.71M | 736.00K | EBITDA |
| 0.00 | 102.01M | -128.27M | 34.19M | 8.23M | Net Income Common Stockholders |
| 28.75M | 33.71M | -187.83M | 21.11M | 736.00K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 40.76M | 41.63M | 29.27M | 40.80M | 43.57M | Total Assets |
| 2.27B | 2.31B | 2.95B | 2.58B | 509.66M | Total Debt |
| 177.20M | 1.65B | 1.64B | 1.47B | 81.91M | Net Debt |
| 136.44M | 1.42B | 1.61B | 1.43B | 38.34M | Total Liabilities |
| 2.03B | 2.05B | 2.71B | 2.09B | 261.35M | Stockholders Equity |
| 238.97M | 256.11M | 236.48M | 491.39M | 248.31M |
| Cash Flow | Free Cash Flow | |||
| -221.43M | 306.40M | -331.13M | -1.57B | 34.41M | Operating Cash Flow |
| -221.43M | 306.40M | -331.13M | -1.57B | 34.41M | Investing Cash Flow |
| 120.84M | -194.11M | 664.33M | -460.48M | -52.44M | Financing Cash Flow |
| 98.99M | -107.66M | -345.65M | 2.03B | 54.80M |
Angel Oak Mortgage Technical Analysis
Negative
7.85
Price Trends
9.75
Negative
9.50
Negative
9.86
Negative
Market Momentum
-0.07
Positive
38.10
Neutral
10.81
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AOMR, the sentiment is Negative. The current price of 7.85 is below the 20-day moving average (MA) of 9.45, below the 50-day MA of 9.75, and below the 200-day MA of 9.86, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 38.10 is Neutral, neither overbought nor oversold. The STOCH value of 10.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AOMR.
Angel Oak Mortgage Risk Analysis
Angel Oak Mortgage disclosed 112 risk factors in its most recent earnings report. Angel Oak Mortgage 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
Angel Oak Mortgage Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $8.22B | 9.66 | 9.58% | 16.04% | 384.69% | 963700.00% | |
68 Neutral | $11.25B | 11.62 | 8.40% | 14.07% | 13.33% | ― | |
68 Neutral | $1.19B | 9.99 | 8.24% | 11.70% | -16.66% | -23.98% | |
62 Neutral | $1.20B | 4.87 | 13.74% | 15.60% | 28.33% | ― | |
61 Neutral | $4.43B | 16.22 | -3.23% | 11.37% | 6.25% | -21.19% | |
48 Neutral | $198.11M | 7.19 | 11.61% | 15.18% | 73.21% | -13.73% | |
45 Neutral | $92.80M | 42.17 | 4.93% | 20.83% | 18.47% | ― |
* Real Estate Sector Average
Performance Comparison
AOMR
Angel Oak Mortgage
7.85
-2.11
-21.18%
AGNC
AGNC Investment
8.66
0.22
2.61%
NLY
Annaly Capital
18.13
1.15
6.77%
TWO
Two Harbors
11.03
<0.01
0.09%
PMT
PennyMac Mortgage
13.03
0.00
0.00%
CHMI
Cherry Hill Mortgage
2.65
-0.24
-8.30%
Angel Oak Mortgage Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -17.89% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and negative aspects. While the company showed strong growth in net interest income, successful securitization activities, and reduced operating expenses, it faced challenges with a decline in book value, unrealized losses, and increased delinquency rates. The sentiment leans slightly negative due to the significant impact of these challenges.Highlights
Net Interest Income Growth
The company reported a 9% growth in net interest income for Q4 2024 compared to Q3, and a 28% increase for the full year 2024 compared to 2023.
Successful Securitization Strategy
Completed five securitizations in 2024, exceeding the target of one per quarter, which enhanced capital flexibility and increased portfolio yield.
Interest Income Improvement
Achieved a 30% improvement in interest income compared to Q4 2023 and a 16% increase compared to Q3 2024.
Reduced Operating Expenses
Operating expenses for Q4 2024 were reduced by 16% compared to Q4 2023, and full-year expenses decreased by approximately 14%.
Lowlights
Decline in Book Value
GAAP book value per share decreased 9.8% from $11.28 as of September 30, 2024, to $10.17 as of December 31, 2024.
Unrealized Losses in Securitized Loan Portfolio
Q4 2024 saw $24.4 million of unrealized losses on residential and securitized loan portfolios, impacting portfolio valuation negatively.
Increase in Delinquency Rates
The weighted average percentage of loans 90 days delinquent increased to 2.4% from 1.85% at the end of Q3 2024.
GAAP Net Loss for Q4
Reported a GAAP net loss of $15 million or $0.65 per common share for Q4 2024.
Company Guidance
During the Angel Oak Mortgage REIT Fourth Quarter 2024 Earnings Conference Call, management provided comprehensive guidance on the company's financial performance and strategic direction. They reported a 9% growth in net interest income compared to the third quarter and a net interest margin expansion, highlighting solid financial and operational outcomes. The company completed five securitizations in 2024, surpassing their target of one per quarter, which enhanced capital flexibility and increased portfolio yield. However, the fourth quarter saw a decline in book value due to interest rate volatility, with GAAP net loss of $15 million or $0.65 per share and distributable earnings at $9.9 million or $0.42 per share. The call also emphasized the strategic focus on prudent risk management, disciplined execution, and maintaining a flexible capital deployment strategy to maximize returns. Economic book value per share decreased to $13.10, with the weighted average coupon of the residential whole loan portfolio at 7.39%. The company ended the year with $40.8 million in cash, a loan-to-value ratio of 70.2%, and a weighted average FICO score of 749 for loan purchases. Management expects continued growth in interest income through accretive loan purchases and effective securitization, while maintaining a cautious approach to capital raising and the evolving market dynamics.Angel Oak Mortgage Corporate Events
M&A TransactionsBusiness Operations and Strategy
Angel Oak Mortgage Partners with Brookfield Asset Management
Positive
Apr 1, 2025
On April 1, 2025, Angel Oak Companies announced a strategic partnership with Brookfield Asset Management, where Brookfield will acquire a majority stake in Angel Oak. This partnership is expected to enhance Angel Oak’s growth and innovation in residential mortgage credit, while allowing Brookfield to expand its credit offerings. The transaction is anticipated to close by September 30, 2025, subject to certain conditions, and is not expected to alter Angel Oak’s day-to-day management. This collaboration aligns with Brookfield’s strategy to partner with top credit managers and is seen as a validation of Angel Oak’s successful business model.
Financial Disclosures
Angel Oak Mortgage to Announce 2024 Financial Results
Neutral
Feb 18, 2025
On February 18, 2025, Angel Oak Mortgage REIT, Inc. announced it will release its fourth quarter and full year 2024 financial results on March 4, 2025, before the market opens. The company will hold a conference call at 8:30 a.m. Eastern Time on the same day to discuss these results. This announcement may impact stakeholders by providing insights into the company’s financial performance and strategic positioning in the non-QM loans market.
Dividends
Angel Oak Mortgage Declares Quarterly Cash Dividend
Positive
Feb 6, 2025
On February 6, 2025, Angel Oak Mortgage REIT, Inc. announced a quarterly cash dividend of $0.32 per share of common stock, payable on February 28, 2025, to stockholders of record as of February 21, 2025. This move underscores the company’s commitment to providing attractive returns to its investors, reflecting its strong position in the real estate finance industry.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.