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Federal National Mortgage Association
(OTC:FNMA)
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Rating:61Neutral
Price Target:
$6.00
▼(-3.38% Downside)
Action:Reiterated
Date:08/01/26
The score is driven primarily by mixed fundamentals: strong recent revenue/profit and positive TTM cash generation, but materially constrained by very high leverage and historical volatility in margins/cash flows. Valuation is supportive due to a very low P/E, while technicals are weak with the stock trading below major moving averages. Earnings-call tone is constructive on profitability and efficiency, but acknowledges rising credit pressure and ongoing multifamily stress.
Positive Factors
Scale of guarantee business
Fannie Mae's massive guarantee book (~$4.1T) and stable g-fee revenue (> $6B) reflect a structurally dominant role in the secondary mortgage market. Scale supports pricing power, liquidity provision to lenders, and durable fee income that underpins long-term earnings resilience.
Negative Factors
Very high leverage
Extremely high leverage (debt-to-equity ~36x) leaves only a thin equity cushion relative to total assets. Structural sensitivity means modest credit losses or valuation shifts can materially erode capital, constraining strategic flexibility and increasing systemic tail‑risk over months.
Read all positive and negative factors
Positive Factors
Negative Factors
Scale of guarantee business
Fannie Mae's massive guarantee book (~$4.1T) and stable g-fee revenue (> $6B) reflect a structurally dominant role in the secondary mortgage market. Scale supports pricing power, liquidity provision to lenders, and durable fee income that underpins long-term earnings resilience.
Read all positive factors
Federal National Mortgage Association (FNMA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.71B
Dividend YieldN/A
Average Volume (3M)3.99M
Price to Earnings (P/E)3.6
Beta (1Y)1.02
Revenue Growth2.86%
EPS Growth1936.84%
CountryUS
Employees7,000
SectorFinancial
Sector Strength70
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)1.63
Shares Outstanding1,158,087,500
10 Day Avg. Volume3,564,477
30 Day Avg. Volume3,987,792
Financial Highlights & Ratios
PEG Ratio35.77
Price to Book (P/B)0.58
Price to Sales (P/S)0.39
P/FCF Ratio2.62
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$7.81Price Target Upside25.81% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)2.59
Revenue Forecast (FY)$29.38B
Federal National Mortgage Association Business Overview & Revenue Model
Company Description
The Federal National Mortgage Association, commonly known as Fannie Mae, was established in 1938 and has its headquarters in Washington, D.C. Its fundamental purpose is to facilitate the flow of capital in the United States mortgage market, ensuri...
How the Company Makes Money
Fannie Mae primarily makes money by (1) guaranteeing mortgage-backed securities and (2) earning investment-related income from its retained mortgage and securities portfolio, along with (3) fees and other ancillary income related to its housing fi...
Federal National Mortgage Association Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call emphasizes strong profitability, revenue growth, improved margins, disciplined expense management and meaningful mission impact (liquidity provided, households helped, appraisal savings). These positives are tempered by higher credit provisions and net charge-offs, ongoing multifamily market stress with expected additional delinquencies, and $150 million of unrealized AFS losses. Management highlighted operational efficiencies and capital strength (net worth >$116B) that mitigate risks and position the company to absorb near-term credit volatility.Positive Updates
Strong Quarterly Profitability
Net income of $4.0 billion, up 7% quarter-over-quarter and 20% year-over-year, driven by durable guarantee business and higher net revenues of $7.6 billion (up 4% QoQ).
Negative Updates
Higher Credit Provisions and Charge-offs
Total allowance increased by $161 million in Q2. Single-family allowance rose $59 million and multifamily allowance rose $102 million. The company recorded $226 million provision for credit losses and $167 million of net charge-offs (single-family), and a $259 million provision with $157 million of net charge-offs (multifamily) in the quarter.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Quarterly Profitability
Net income of $4.0 billion, up 7% quarter-over-quarter and 20% year-over-year, driven by durable guarantee business and higher net revenues of $7.6 billion (up 4% QoQ).
Read all positive updates
Company Guidance
Management's guidance emphasized continued support for market liquidity and disciplined capital and expense management while preparing for continued multifamily stress: they expect ongoing multifamily market challenges to drive additional delinquencies, will increase exposure to longer-term rate positions (including purchases of U.S. Treasuries) to reduce earnings volatility (Q2 produced $150 million of net unrealized losses on AFS), and will sustain their operational efficiency push to keep the administrative expense ratio below 11% (10.7% in Q2) while pursuing capital efficiency (illustrative return on required equity 10.8%, +40 bps QoQ). Key Q2 metrics underpinning that guidance included net income $4.0 billion (+7% QoQ, +20% YoY), net revenues $7.6 billion (+4% QoQ), average guarantee book ~$4.1 trillion with >$6 billion of guarantee fee revenue, single‑family guarantee book $3.6 trillion and $111 billion of Q2 single‑family acquisitions (weighted average original LTV 77%, average FICO 756), multifamily guarantee book $545 billion with $14 billion of new business, net worth above $116 billion, $125 billion of liquidity provided to the market (helping ~417,000 households, including ~110,000 first‑time buyers, and >21,000 homeowners through foreclosure prevention), appraisal alternatives benefiting >76,000 households and ~$45 million of estimated Q2 borrower savings (>$3 billion cumulative since 2018), $25 billion of debt issued, total allowance increased $161 million (SF +$59M; MF +$102M), and $167 million of net charge‑offs.Federal National Mortgage Association Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
35
Negative
Cash Flow
56
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 161.49B | 160.56B | 151.36B | 140.94B | 116.81B | 100.33B |
| Gross Profit | 125.36B | 156.81B | 147.59B | 137.51B | 113.44B | 97.26B |
| EBITDA | 117.66B | 147.99B | 143.09B | 132.90B | 107.11B | 98.04B |
| Net Income | 15.09B | 14.36B | 16.98B | 17.41B | 12.92B | 22.18B |
Balance Sheet | ||||||
| Total Assets | 4.33T | 4.32T | 4.35T | 4.33T | 4.31T | 4.23T |
| Cash, Cash Equivalents and Short-Term Investments | 11.41B | 81.34B | 78.81B | 68.71B | 123.38B | 43.28B |
| Total Debt | 4.19T | 4.18T | 4.23T | 4.22T | 4.22T | 4.16T |
| Total Liabilities | 4.22T | 4.21T | 4.26T | 4.25T | 4.25T | 4.18T |
| Stockholders Equity | 116.50B | 109.01B | 94.66B | 77.68B | 60.28B | 47.36B |
Cash Flow | ||||||
| Free Cash Flow | 30.65B | 23.99B | -10.52B | 11.88B | 41.13B | 47.21B |
| Operating Cash Flow | 30.65B | 23.99B | -10.52B | 11.88B | 43.83B | 47.21B |
| Investing Cash Flow | 160.67B | 186.90B | 157.79B | 99.15B | 90.13B | 90.85B |
| Financing Cash Flow | -188.78B | -206.85B | -137.17B | -130.17B | -154.74B | -145.05B |
Federal National Mortgage Association Technical Analysis
Neutral
6.21
Price Trends
6.33
Negative
6.75
Negative
8.13
Negative
Market Momentum
-0.15
Negative
49.07
Neutral
46.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FNMA, the sentiment is Neutral. The current price of 6.21 is above the 20-day moving average (MA) of 6.00, below the 50-day MA of 6.33, and below the 200-day MA of 8.13, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 49.07 is Neutral, neither overbought nor oversold. The STOCH value of 46.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FNMA.
Federal National Mortgage Association Risk Analysis
Federal National Mortgage Association disclosed 36 risk factors in its most recent earnings report. Federal National Mortgage Association 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
Federal National Mortgage Association Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
61 Neutral | $6.71B | 3.56 | 13.60% | ― | 2.86% | 1936.84% | |
59 Neutral | $3.92B | 9.97 | 9.14% | 1.42% | 29.40% | 0.67% | |
54 Neutral | $36.50B | 198.77 | 1.53% | ― | 73.75% | 269.75% | |
47 Neutral | $2.91B | 6.83 | 33.91% | 21.86% | 37.10% | ― |
* Financial Sector Average
FNMA
Federal National Mortgage Association
6.05
-5.44
-47.35%
PFSI
PennyMac Financial
77.41
-21.05
-21.38%
UWMC
UWM Holding
1.28
-2.79
-68.58%
RKT
Rocket Companies
13.72
-3.39
-19.81%
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.