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Lument Finance Trust (LFT)
NYSE:LFT
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Lument Finance Trust
(NYSE:LFT)
69Neutral
Positive Factors
Dividend
LFT shareholders received a total 2024 yield of 17.2% based on the YE23 closing price of $2.33 per share.
Earnings
Distributable EPS of $0.10 was reported, surpassing both consensus and lower estimates.
Stock Performance
LFT shares could provide a potential NTM total return of over ~36% based on the current dividend rate.
Negative Factors
Market Conditions
Even some multifamily markets are starting to see signs of stress, driven mostly by higher interest rates.
Lument Finance Trust (LFT) vs. S&P 500 (SPY)
Market Cap
$140.19M
Dividend Yield11.57%
Average Volume (3M)89.48K
Price to Earnings (P/E)7.8
Beta (1Y)0.60
Revenue Growth11.76%
EPS Growth19.50%
CountryUS
Employees600
SectorReal Estate
Sector Strength69
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.34
Shares Outstanding52,309,208
10 Day Avg. Volume129,194
30 Day Avg. Volume89,481
Financial Highlights & Ratios
PEG Ratio0.40
Price to Book (P/B)N/A
Price to Sales (P/S)4.27
Price to Cash Flow (P/CF)5.90
P/FCF Ratio4.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.25Price Target Upside21.27% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Lument Finance Trust Business Overview & Revenue Model
Company DescriptionLument Finance Trust, Inc. (LFT) is a real estate investment trust (REIT) that primarily focuses on investing in, financing, and managing a portfolio of commercial real estate debt investments. The company operates in the real estate sector, with a specific emphasis on providing financing solutions for commercial properties. LFT's core services include originating, acquiring, and managing commercial mortgage loans, commercial mortgage-backed securities (CMBS), and other commercial real estate-related debt instruments.
How the Company Makes MoneyLument Finance Trust generates revenue primarily through the interest income earned on its portfolio of commercial real estate debt investments. The company invests in a variety of commercial mortgage loans and securities, earning interest payments over time. Additionally, LFT may engage in securitization transactions, whereby it packages its loan assets into securities and sells them to investors, potentially earning gains on these sales. The company also benefits from strategic partnerships with financial institutions and real estate operators that help source attractive investment opportunities and enhance portfolio returns. LFT's earnings are influenced by factors such as interest rate fluctuations, credit risk management, and the overall performance of the commercial real estate market.
Lument Finance Trust Financial Statement Overview
Summary
Lument Finance Trust displays robust revenue growth and strong operational efficiencies, as evidenced by high gross and EBIT margins. However, the company's high leverage remains a concern, indicating potential financial risk. Cash flows are strong, showing effective cash management and liquidity. Overall, while the company has demonstrated solid performance and growth, careful monitoring of leverage and financial stability is advised.Income Statement
The company shows a significant revenue growth in the TTM (Trailing-Twelve-Months) compared to previous periods, with total revenue jumping to 107.97 million from 32.08 million annually. Gross profit margin is strong at 93.62% for TTM. The EBIT margin is also healthy at 54.26%, indicating efficient cost management. However, net profit margin stands at 21.19%, which, although positive, reflects substantial non-operating expenses.78
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 4.13 for TTM, indicating substantial leverage which could pose financial risk. The equity ratio is relatively low at 19.35%, suggesting a high dependence on external financing. Return on equity (ROE) is moderate at 9.41%, reflecting decent profitability from shareholders' equity.65
Positive
Cash Flow
Operating cash flow to net income ratio is strong at 1.15, suggesting good cash generation from operations relative to net income. Free cash flow has grown modestly over the periods, and the free cash flow to net income ratio is healthy at 1.15, indicating efficient management of operating and capital expenditures.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 107.97M | 32.08M | 24.22M | 21.07M | 19.14M | 16.27M | Gross Profit |
| 101.03M | 32.08M | 23.91M | 20.79M | -1.47B | -344.25M | EBIT |
| 58.58M | 21.98M | 5.11M | 10.61M | 7.97M | 6.21M | EBITDA |
| 62.99M | 94.52M | 5.17M | 10.61M | 7.97M | 6.21M | Net Income Common Stockholders |
| 22.87M | 19.71M | 9.86M | 10.53M | 8.45M | 6.25M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 7.88M | 51.25M | 1.12B | 14.75M | 11.38M | 10.94M | Total Assets |
| 679.35M | 1.45B | 1.13B | 1.05B | 621.49M | 657.90M | Total Debt |
| 523.21M | 1.19B | 876.28M | 873.63M | 502.62M | 545.31M | Net Debt |
| 515.33M | 1.14B | 832.42M | 858.88M | 491.24M | 534.37M | Total Liabilities |
| 529.15M | 1.21B | 884.96M | 879.55M | 507.79M | 549.26M | Stockholders Equity |
| 150.10M | 240.69M | 242.90M | 169.28M | 113.60M | 108.55M |
| Cash Flow | Free Cash Flow | ||||
| 26.31M | 24.74M | 16.29M | 13.85M | 12.22M | 7.28M | Operating Cash Flow |
| 26.31M | 24.74M | 16.29M | 13.85M | 12.22M | 7.28M | Investing Cash Flow |
| 199.05M | -316.72M | -51.83M | -477.29M | 87.92M | -42.30M | Financing Cash Flow |
| -213.63M | 296.13M | 64.63M | 412.35M | -46.77M | -8.19M |
Lument Finance Trust Technical Analysis
Negative
2.68
Price Trends
2.70
Negative
2.58
Positive
2.44
Positive
Market Momentum
0.02
Positive
41.25
Neutral
32.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LFT, the sentiment is Negative. The current price of 2.68 is below the 20-day moving average (MA) of 2.75, below the 50-day MA of 2.70, and above the 200-day MA of 2.44, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 41.25 is Neutral, neither overbought nor oversold. The STOCH value of 32.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LFT.
Lument Finance Trust Risk Analysis
Lument Finance Trust disclosed 102 risk factors in its most recent earnings report. Lument Finance Trust 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
Lument Finance Trust Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $2.23B | 9.97 | 8.62% | 14.63% | -11.26% | -33.80% | |
69 Neutral | $140.19M | 7.82 | 9.47% | 11.57% | 11.76% | 19.50% | |
69 Neutral | $6.70B | 18.04 | 5.55% | 9.67% | -0.97% | 3.75% | |
63 Neutral | $1.06B | 11.91 | 6.92% | 10.84% | 7.13% | 64.82% | |
61 Neutral | $1.34B | ― | -6.02% | 12.42% | -9.71% | -426.57% | |
61 Neutral | $4.71B | 17.93 | -2.95% | 11.44% | 6.38% | -21.59% | |
60 Neutral | $3.41B | ― | -5.01% | 10.98% | -12.86% | -182.05% |
* Real Estate Sector Average
Performance Comparison
LFT
Lument Finance Trust
2.68
0.47
21.27%
ARI
Apollo Real Estate
9.66
-0.32
-3.21%
CIM
Chimera Investment
13.10
0.81
6.59%
ABR
Arbor Realty
11.76
0.24
2.08%
BXMT
Blackstone Mortgage
19.86
1.82
10.09%
STWD
Starwood Property
19.85
1.28
6.89%
Lument Finance Trust Earnings Call Summary
Earnings Call Date: Mar 19, 2025 | % Change Since: -3.94% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted stable credit risk ratings and successful loan payoffs, showing some positive momentum in lending activity and a strong focus on multi-family assets. However, challenges persist with elevated interest rates and the downgrade of some loans to high risk, alongside limited new investment activity. The sentiment is thus balanced.Highlights
Stable Credit Risk Ratings
The credit risk ratings have remained largely stable, reflecting disciplined underwriting and ongoing borrower engagement. The company has managed to keep a stable credit risk rating while making modest increases to specific reserves.
Successful Loan Payoffs
During the fourth quarter, Lument Finance Trust experienced $144 million of loan payoffs and acquired one new loan asset. The company received full recovery of principal on two loans that were previously rated as high risk.
Positive Momentum in Lending Activity
The company is optimistic about the positive momentum for lending activity continuing into 2025, with increasing stability in commercial real estate and rental growth anticipated.
Strong Focus on Multi-Family Assets
Lument Finance Trust continues to focus on multi-family assets, which remain strong due to robust demand, constrained supply, and resilient rental trends.
Lowlights
Interest Rate Environment Challenges
The anticipated rate cuts did not materialize as expected due to ongoing inflationary pressures, leading to elevated interest rates which present challenges.
Downgrade of Loans to High Risk
The company had six loans downgraded to a risk rating of five, with an aggregate principal amount of $98 million, indicating potential challenges.
Limited New Investment Activity
LFT's investment activity during the quarter was modest, primarily limited by the available reinvestment capital, and the new loan acquisitions were minimal.
Company Guidance
During the fourth quarter of fiscal year 2024, Lument Finance Trust reported a GAAP net income of $0.07 per share and distributable earnings of $0.10 per share. Over the fiscal year, the company declared cumulative dividends of $0.40 per share, which included a $0.09 special dividend. The company’s portfolio consisted of 65 floating rate loans totaling approximately $1.1 billion, with an average rate of SOFR plus 358 basis points. The portfolio's financing was supported by securitizations with effective leverage of 78% and a weighted average cost of SOFR plus 226 basis points. Despite market volatility and elevated interest rates, the company remains optimistic about the increasing stability in commercial real estate and expects lending activity to continue its positive momentum into 2025. The Federal Reserve is projected to make two rate cuts in 2025, which may further impact the economic landscape. The company also indicated that its credit risk ratings have remained stable, though it has modestly increased specific reserves in line with expectations for portfolio performance.Lument Finance Trust Corporate Events
Executive/Board ChangesDividendsFinancial Disclosures
Lument Finance Trust Announces Q4 2024 Results and Leadership Change
Neutral
Mar 19, 2025
On March 19, 2024, Lument Finance Trust announced its financial results for the fourth quarter and full year 2024, reporting a GAAP net income of $3.6 million for the fourth quarter and $17.9 million for the full year. The company declared a cash dividend of $0.08 per share for common stock and $0.4921875 per share for preferred stock, payable in April 2025. Additionally, the Board appointed Greg D. Calvert as the new President, effective May 1, 2025, following the resignation of James J. Henson. These announcements reflect LFT’s ongoing commitment to shareholder returns and leadership transition, potentially impacting its strategic direction and market positioning.
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.