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Federal National Mortgage (FNMA)
:FNMA
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Federal National Mortgage Association
(OTC:FNMA)
Rating:55Neutral
Price Target:
$8.50
▼(-0.23%Downside)
Federal National Mortgage Association (FNMA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.87B
Dividend YieldN/A
Average Volume (3M)3.99M
Price to Earnings (P/E)3872.7
Beta (1Y)0.34
Revenue Growth7.87%
EPS GrowthN/A
CountryUS
Employees8,200
SectorFinancial
Sector Strength77
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)0.62
Shares Outstanding1,158,087,500
10 Day Avg. Volume2,276,789
30 Day Avg. Volume3,987,202
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.53
Price to Sales (P/S)0.00
P/FCF Ratio-0.73
Enterprise Value/Market Cap-6.84
Enterprise Value/Revenue-0.18
Enterprise Value/Gross Profit-0.76
Enterprise Value/Ebitda-0.24
Forecast
1Y Price Target
$4.00Price Target Upside-53.05% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering1
Federal National Mortgage Association Business Overview & Revenue Model
Company DescriptionFederal National Mortgage Association provides a source of financing for mortgages in the United States. It securitizes mortgage loans originated by lenders into Fannie Mae mortgage-backed securities (Fannie Mae MBS). The company operates through two segments, Single-Family and Multifamily. The Single-Family segment securitizes and purchases single-family fixed-rate or adjustable-rate, first-lien mortgage loans, or mortgage-related securities backed by these loans; and loans that are insured by Federal Housing Administration, loans guaranteed by the Department of Veterans Affairs and Rural Development Housing and Community Facilities Program of the U.S. Department of Agriculture, manufactured housing mortgage loans, and other mortgage-related securities. This segment also provides single-family mortgage servicing, as well as credit risk and loss management services. The Multifamily segment securitizes multifamily mortgage loans into Fannie Mae MBS; purchases multifamily mortgage loans; and provides credit enhancement for bonds issued by state and local housing finance authorities to finance multifamily housing. This segment also issues structured MBS backed by Fannie Mae multifamily MBS; buys and sells multifamily agency mortgage-backed securities; invests in low-income housing tax credit (LIHTC) multifamily projects; and offers delegated underwriting and servicing, as well as multifamily mortgage, and credit risk and loss management services. The company serves mortgage banking companies, savings and loan associations, savings banks, commercial banks, credit unions, community banks, insurance companies, private mortgage originators, and state and local housing finance agencies. Federal National Mortgage Association was founded in 1938 and is headquartered in Washington, the District of Columbia.
How the Company Makes MoneyFannie Mae makes money primarily through the guarantee fees it charges lenders for the mortgage-backed securities it issues. These fees are a form of compensation for assuming the credit risk on the underlying loans. Additionally, Fannie Mae earns income from its retained mortgage portfolio, which includes holding and managing mortgage assets and securities. The company also benefits from interest income on its investment holdings. Significant partnerships with lending institutions and banks contribute to its earnings by facilitating the flow of capital into the residential mortgage market. By enhancing liquidity and reducing risks for lenders, Fannie Mae plays a crucial role in promoting homeownership and stability in the housing finance system.
Federal National Mortgage Association Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q3-2024)
| % Change Since: 33.54%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced perspective. While Fannie Mae demonstrates strong financial stability, significant liquidity provision, and a focus on affordable housing, challenges persist in the form of decreased net income, credit losses in multifamily, lower acquisitions, increased delinquency rates, and a challenging housing market outlook.Q3-2024 Updates
Positive Updates
Strong Financial Stability
Net worth increased to $90.5 billion by the end of September, enhancing financial stability. The minimum regulatory capital shortfall reduced by $17 billion since the start of the year.
Significant Liquidity Provision
Provided $106 billion of liquidity to single-family and multifamily markets, aiding 383,000 households in buying, refinancing, or renting homes.
Focus on Affordable Housing
Supported 117,000 first-time homebuyers and financed approximately 103,000 units of affordable multifamily rental housing.
Single-Family Acquisition Growth
Acquired $93.1 billion in single-family loans, an 8% increase from the prior quarter, driven by seasonal purchase volume and declining mortgage rates.
Credit Risk Transfer Achievements
Executed credit risk transfer transactions covering approximately $44.5 billion in single-family and $14.1 billion in multifamily loans.
Negative Updates
Decrease in Net Income
Net income decreased to $4 billion from $4.5 billion in the previous quarter.
Multifamily Credit Losses
Recorded a $424 million provision for credit losses in multifamily, up significantly from the prior quarter due to ARM loans and decreased property values.
Decline in Multifamily Acquisitions
Multifamily loan acquisitions dropped to $32.5 billion by September 30, down from $41.7 billion in the first nine months of 2023.
Increase in Delinquency Rates
Single-family SDQ rate increased to 52 basis points and multifamily SDQ rate increased to 56 basis points by the end of September.
Challenges in Housing and Economic Outlook
Existing home sales remain low, with expectations for 2024 being the lowest since 1995. Multifamily property values declined by 19.5% from their peak in 2022.
Company Guidance
During Fannie Mae's third-quarter 2024 earnings call, executives provided guidance and key metrics reflecting the company's financial performance and market outlook. Fannie Mae reported a net income of $4 billion, down from $4.5 billion in the previous quarter, with revenues holding steady at $7.3 billion. The call highlighted a $106 billion liquidity provision to the single-family and multifamily markets, aiding 383,000 households. The single-family acquisitions surged to $93.1 billion, with a strong credit profile characterized by a weighted average loan-to-value ratio of 77% and a credit score average of 759. The multifamily sector, however, faced challenges, with property values dropping 19.5% from their peak in Q2 2022 and a serious delinquency rate increase to 56 basis points. The economic outlook anticipates a rise in single-family mortgage originations from $1.5 trillion in 2023 to $1.7 trillion in 2024, with home price growth projected at 5.8% for 2024. Fannie Mae also executed credit risk transfer transactions covering $44.5 billion in single-family and $14.1 billion in multifamily unpaid principal balances, underscoring its risk management strategies amidst a challenging market environment.Federal National Mortgage Association Financial Statement Overview
Summary
Federal National Mortgage Association exhibits strong revenue growth and profitability, supported by an improved equity position and reduced leverage. However, negative operating and free cash flows in 2024 suggest potential liquidity challenges.Income Statement
Federal National Mortgage Association shows a robust revenue growth over the years, notably from $21.69 billion in 2019 to $150.57 billion in 2024. The net profit margin for 2024 was a solid 16.98%, indicating strong profitability. However, EBIT has fluctuated, with a drop to $0 in 2024, suggesting potential volatility in operational efficiency.85
Very Positive
Balance Sheet
The company maintains a strong equity position with stockholders' equity growing from $14.61 billion in 2019 to $94.66 billion in 2024. The debt-to-equity ratio has improved significantly due to reduced total debt, reflecting reduced financial risk. However, the equity ratio is relatively low at 2.18%, indicating high leverage.78
Positive
Cash Flow
Operating cash flow has been volatile, turning negative in 2024, which could pose challenges in liquidity management. Free cash flow also turned negative in 2024, raising concerns about cash generation. However, the company has managed substantial investing cash flows, demonstrating the ability to sustain investment activities.68
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 31.05B | 31.94B | 24.53B | 31.45B | 23.73B |
| Gross Profit | 30.85B | 31.94B | 27.35B | 36.61B | 21.06B |
| EBITDA | 143.09B | 21.96B | 88.46B | 27.95B | 14.88B |
| Net Income | 16.98B | 17.41B | 12.92B | 22.18B | 11.80B |
Balance Sheet | |||||
| Total Assets | 4.35T | 4.33T | 4.31T | 4.23T | 3.99T |
| Cash, Cash Equivalents and Short-Term Investments | 78.81B | 68.71B | 123.38B | 43.28B | 40.03B |
| Total Debt | 4.23T | 4.22T | 4.22T | 4.16T | 3.94T |
| Total Liabilities | 4.26T | 4.25T | 4.25T | 4.18T | 3.96T |
| Stockholders Equity | 94.66B | 77.68B | 60.28B | 47.36B | 25.26B |
Cash Flow | |||||
| Free Cash Flow | -10.52B | 11.88B | 41.13B | 43.67B | -78.92B |
| Operating Cash Flow | -10.52B | 11.88B | 43.83B | 47.21B | -72.93B |
| Investing Cash Flow | 157.79B | 99.15B | 90.13B | 90.85B | 26.68B |
| Financing Cash Flow | -137.17B | -130.17B | -154.74B | -145.05B | 100.47B |
Federal National Mortgage Association Technical Analysis
Neutral
8.52
Price Trends
9.02
Negative
7.61
Positive
5.58
Positive
Market Momentum
-0.12
Positive
39.84
Neutral
21.70
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 8.52 is below the 20-day moving average (MA) of 9.33, below the 50-day MA of 9.02, and above the 200-day MA of 5.58, indicating a neutral trend. The MACD of -0.12 indicates Positive momentum. The RSI at 39.84 is Neutral, neither overbought nor oversold. The STOCH value of 21.70 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
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $9.38B | 16.83 | 12.39% | ― | 6.44% | -7.86% | |
64 Neutral | $6.61B | 11.16 | 7.19% | 5.25% | 24.10% | 5.12% | |
63 Neutral | $5.21B | 15.48 | 9.32% | 1.19% | 23.79% | 121.61% | |
57 Neutral | $1.23B | 28.57 | 3.71% | 2.52% | 42.92% | 64.72% | |
55 Neutral | $9.87B | 3,872.73 | 18.10% | ― | 7.87% | ― | |
54 Neutral | $28.61B | 68.51 | 0.45% | ― | 24.58% | -88.86% | |
47 Neutral | $6.78B | 37.74 | -5.74% | 9.59% | 9.19% | -171.38% |
* Financial Sector Average
Performance Comparison
FNMA
Federal National Mortgage Association
8.52
7.15
521.90%
PFSI
PennyMac Financial
100.85
2.82
2.88%
COOP
Mr Cooper Group
150.43
63.21
72.47%
UWMC
UWM Holding
4.24
-3.00
-41.44%
RKT
Rocket Companies
13.99
-0.11
-0.78%
GHLD
Guild Holdings
19.85
5.98
43.11%
Federal National Mortgage Association Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Fannie Mae Announces Tender Offers for CAS Notes
Neutral
May 22, 2025
On May 22, 2025, Fannie Mae announced the commencement of fixed-price cash tender offers for the purchase of certain Connecticut Avenue Securities (CAS) Notes. These offers, managed by BofA Securities and Wells Fargo Securities, are set to expire on May 29, 2025, unless extended or terminated. The tender offers aim to purchase any and all of the specified CAS Notes, with settlement expected by June 2, 2025. This move could impact Fannie Mae’s financial operations and its positioning in the mortgage securities market.
The most recent analyst rating on (FNMA) stock is a Hold with a $3.00 price target. To see the full list of analyst forecasts on Federal National Mortgage Association stock, see the FNMA Stock Forecast page.
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.