AG Mortgage (MITT) AI Stock Analysis

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AG Mortgage

(NYSE:MITT)

Rating:67Neutral

Price Target:

$7.50

▲( 9.33% Upside)

AG Mortgage demonstrates strong financial performance with significant revenue growth and profitability, supported by a stable balance sheet. The valuation is attractive with a low P/E ratio and high dividend yield. Although technical indicators suggest mixed signals, the company shows resilience in its earnings call performance despite market volatility. These factors contribute to a moderately positive overall stock score.

AG Mortgage (MITT) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$204.47M

Dividend Yield11.18%

Average Volume (3M)237.88K

Price to Earnings (P/E)7.8

Beta (1Y)0.79

Revenue Growth36.70%

EPS Growth-48.88%

CountryUS

EmployeesN/A

SectorReal Estate

Sector Strength64

IndustryREIT - Mortgage

Share Statistics

EPS (TTM)0.20

Shares Outstanding29,676,342

10 Day Avg. Volume162,500

30 Day Avg. Volume237,878

Financial Highlights & Ratios

PEG Ratio>-0.01

Price to Book (P/B)0.40

Price to Sales (P/S)0.00

P/FCF Ratio3.75

Enterprise Value/Market Cap33.45

Enterprise Value/Revenue17.09

Enterprise Value/Gross Profit101.13

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$8.08

Price Target Upside17.78% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering4

AG Mortgage Business Overview & Revenue Model

Company DescriptionAG Mortgage Investment Trust, Inc. operates as a residential mortgage real estate investment trust in the United States. Its investment portfolio comprises residential investments, including non-qualifying mortgages loans, government-sponsored entity non-owner occupied loans, re/non-performing loans, land related financing, and agency residential mortgage-backed securities; and commercial investments. 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. The company was incorporated in 2011 and is based in New York, New York.

How the Company Makes MoneyAG Mortgage makes money primarily through the acquisition and management of residential mortgage-backed securities (RMBS), credit investments such as non-agency RMBS, asset-backed securities (ABS), and commercial mortgage-backed securities (CMBS). The company earns revenue from the interest income on these securities, as well as from the appreciation in the value of its asset holdings. Additionally, AG Mortgage generates income through its strategic partnerships and financing arrangements, which allow it to leverage its portfolio to maximize returns. The company also benefits from its expertise in asset management, which helps optimize the performance and risk profile of its investments.

AG Mortgage Financial Statement Overview

Summary

AG Mortgage shows promising revenue growth and profitability, with improved debt management enhancing financial stability. Cash flow generation is strong, but high capital expenditures warrant attention. While the company demonstrates resilience, careful monitoring of operational efficiency and liquidity is recommended to mitigate potential risks.

Income Statement

Positive

AG Mortgage has demonstrated significant revenue growth from 2022 to 2023, with total revenue increasing from $218,000 to $63.7 million. The net profit margin for 2023 is high at approximately 84.6%, indicating strong profitability. However, the EBIT margin is unavailable for 2023, and the EBITDA margin has shown volatility in previous years, reflecting potential instability in operational efficiency.

Balance Sheet

Neutral

The company's debt-to-equity ratio improved significantly from 2022 to 2023 as total debt was reduced, enhancing financial stability. The equity ratio is relatively stable, providing a solid foundation. However, the return on equity (ROE) has shown fluctuations due to varying net income, which may pose risks to sustained shareholder value.

Cash Flow

Positive

AG Mortgage's operating cash flow has improved significantly in 2023, supporting a strong free cash flow position. The company exhibits a high free cash flow to net income ratio, indicating efficient cash generation relative to earnings. However, the investing cash flow is negative, suggesting high capital expenditures that may impact future liquidity.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
67.63M	75.32M	63.66M	218.00K	99.80M	-390.36M
	Gross Profit
67.63M	75.32M	46.14M	-17.08M	86.44M	-795.22M
	EBIT
0.00	0.00	37.51M	47.47M	104.19M	-420.92M
	EBITDA
0.00	0.00	248.56M	52.94M	0.00	0.00
	Net Income Common Stockholders
46.32M	55.74M	53.78M	-161.76M	104.19M	-420.92M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	0.00	111.53M	155.69M	68.08M	47.93M
	Total Assets
7.32B	6.91B	6.13B	4.37B	3.36B	1.40B
	Total Debt
6.74B	6.33B	5.56B	3.88B	2.78B	418.29M
	Net Debt
6.62B	6.21B	5.45B	3.80B	2.71B	370.37M
	Total Liabilities
6.78B	6.37B	5.60B	3.91B	2.78B	990.34M
	Stockholders Equity
543.87M	543.42M	528.37M	462.80M	570.38M	409.70M
Cash Flow		Free Cash Flow
55.86M	55.84M	28.13M	22.52M	26.30M	4.16M
	Operating Cash Flow
55.86M	55.84M	28.13M	22.52M	26.30M	4.16M
	Investing Cash Flow
-779.63M	-713.13M	-433.50M	-1.49B	-1.90B	2.19B
	Financing Cash Flow
736.34M	670.29M	432.14M	1.47B	1.91B	-2.26B

AG Mortgage Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.86

Price Trends

50DMA

6.82

Positive

100DMA

6.80

Positive

200DMA

6.76

Positive

Market Momentum

MACD

0.11

Negative

RSI

50.30

Neutral

STOCH

16.69

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MITT, the sentiment is Positive. The current price of 6.86 is above the 20-day moving average (MA) of 6.86, above the 50-day MA of 6.82, and above the 200-day MA of 6.76, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 50.30 is Neutral, neither overbought nor oversold. The STOCH value of 16.69 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MITT.

AG Mortgage Risk Analysis

AG Mortgage disclosed 66 risk factors in its most recent earnings report. AG 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

AG Mortgage Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MITT	67 Neutral	$204.47M	7.76	8.55%	11.18%	36.70%	-48.88%
SEVN	66 Neutral	$172.46M	10.07	6.27%	11.99%	-11.97%	-27.40%
Sector *	60 Neutral	$2.76B	10.33	0.49%	8508.28%	5.95%	-17.56%
AOMR	58 Neutral	$214.09M	6.06	14.14%	14.05%	54.49%	-17.44%
LFT	56 Neutral	$127.67M	12.26	6.38%	13.33%	-10.98%	-35.75%
EARN	52 Neutral	$209.58M	20.12	-2.82%	17.33%	440.31%	21.03%
ACRE	48 Neutral	$248.62M	―	-2.33%	19.69%	-52.08%	10.36%

* Real Estate Sector Average

Performance Comparison

MITT

AG Mortgage

6.86

0.88

14.72%

ACRE

Ares Commercial

4.52

-1.13

-20.00%

SEVN

Seven Hills Realty Trust

11.57

0.37

3.30%

EARN

Ellington Residential Mortgage

5.58

-0.47

-7.77%

LFT

Lument Finance Trust

2.44

0.32

15.09%

AOMR

Angel Oak Mortgage

9.22

-1.59

-14.71%

AG Mortgage Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: 3.47%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a stable performance with highlights such as maintaining book value, increasing dividends, and growth in the home equity securitization market. However, market volatility and spread widening presented challenges. Overall, the company showed resilience in navigating macroeconomic shifts.

Q1-2025 Updates

Positive Updates

Stable Book Value and Dividend Increase

The company's book value remained largely unchanged, moving from $10.64 to $10.65, while supporting a newly increased quarterly dividend of $0.20 per share, resulting in a 5.3% increase.

Strong Liquidity Position

MITT maintained a strong liquidity position with approximately $133 million, consisting of $116 million in cash and $17 million of unencumbered Agency RMBS.

Home Equity Securitization Growth

MITT partnered with a nonbank mortgage originator to issue a $500 million home equity securitization and acquired $130 million of additional home equity loans from various nonbank originators.

Economic Return and Earnings Growth

The company delivered a 2% economic return on equity and reported GAAP net income available to common shareholders of $6.2 million or $0.21 per share, with earnings available for distribution (EAD) increasing to $0.20 per share.

Negative Updates

Market Volatility Impact

Market volatility in March and April affected spread widening, leading to an estimated 3% decline in book value through April.

Challenges in Commercial Mortgage Loans

A legacy commercial mortgage loan set to mature required pre-negotiated forbearance, with expectations of a positive outcome within 2025.

Securitization Market Challenges

Spreads in the securitization market widened by 50 to 75 basis points, impacting the retained securities.

Company Guidance

During the AG Mortgage Investment Trust's Q1 2025 earnings call, several key financial metrics and strategic initiatives were highlighted. The company reported a stable book value, increasing marginally from $10.64 to $10.65, alongside a significant 5.3% rise in its quarterly dividend to $0.20 per share, resulting in a 2% economic return on equity for the quarter. Despite market volatility in March and April, the firm maintained a strong liquidity position and a low economic leverage ratio of 1.6x. The investment portfolio grew by 6.2% to $7.1 billion, with a focus on the home equity sector, including a $500 million securitization and additional home equity loan acquisitions. Arc Home, AG's mortgage originator, achieved breakeven, with lock volumes increasing by 50% year-over-year. Additionally, the company's GAAP net income available to common shareholders was $6.2 million, or $0.21 per share, and net interest income saw a 5% increase from the prior quarter.

AG Mortgage Corporate Events

Private Placements and Financing

AG Mortgage Updates Equity Distribution Agreements

Neutral

Nov 6, 2024

AG Mortgage Investment Trust, Inc. has entered into new Equity Distribution Agreements with several sales agents to potentially offer up to $75 million in common stock. The proceeds are intended for general corporate purposes, including acquiring residential investments. Sales can occur through market offerings on the NYSE and compensate agents with up to 2% of the gross sales price. The company also terminated agreements with previous sales agents, effective November 6, 2024.

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.