PennyMac Mortgage (PMT) AI Stock Analysis

• Market Cap: $1.12B
• Dividend Yield: 12.49%
• Average Volume (3M): 841.55K
• Price to Earnings (P/E): 14.1
• Beta (1Y): 0.45
• Revenue Growth: -15.48%
• EPS Growth: -36.45%
• Country: US
• Employees: 7
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): 0.55
• Shares Outstanding: 87,016,600
• 10 Day Avg. Volume: 702,409
• 30 Day Avg. Volume: 841,551
• PEG Ratio: -0.28
• Price to Book (P/B): 0.56
• Price to Sales (P/S): 74.24
• P/FCF Ratio: -0.40
• Enterprise Value/Market Cap: 15.53
• Enterprise Value/Revenue: 34.01
• Enterprise Value/Gross Profit: 39.99
• Enterprise Value/Ebitda: 46.98
• 1Y Price Target: $13.38
• Price Target Upside: 4.45% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): 0.87
• Revenue Forecast (FY): $345.26M

• Rating: 58 Neutral
• Price Target: $13.00 ▲(1.48% Upside)

The overall stock score reflects a challenging financial environment with high leverage and declining revenue growth, partially offset by positive technical indicators and a strong dividend yield. The company's ability to manage debt and improve cash flow will be crucial for future performance.

Positive Factors

Successful Securitizations

The successful completion of securitizations demonstrates PennyMac's ability to effectively manage and monetize its mortgage assets, providing a stable revenue stream and enhancing its market position in the securitization space.

Increased Correspondent Loan Acquisition Volume

The significant increase in loan acquisition volume indicates strong demand and operational efficiency, which can drive future revenue growth and strengthen PennyMac's competitive position in the mortgage market.

Robust Private Label Securitization Market

PennyMac's leadership in private label securitizations reflects its strategic capability to leverage market opportunities, enhancing its revenue potential and reinforcing its role as a key player in the mortgage securitization industry.

Negative Factors

High Leverage

The high leverage ratio indicates significant financial risk, as it limits PennyMac's flexibility to manage debt and could impact its ability to invest in growth opportunities or weather economic downturns.

Declining Revenue Growth

The sharp decline in revenue growth suggests challenges in maintaining market share or pricing power, which could undermine PennyMac's long-term profitability and competitive standing in the mortgage industry.

Negative Operating Cash Flow

Negative operating cash flow indicates potential liquidity issues, impacting PennyMac's ability to finance operations and invest in growth, which could hinder its financial health and strategic initiatives over the long term.

PennyMac Mortgage Business Overview & Revenue Model

Company Description

PennyMac Mortgage Investment Trust, a specialty finance company, primarily invests in mortgage-related assets in the United States. The company's Credit Sensitive Strategies segment invests in credit risk transfer (CRT) agreements, CRT securities, distressed loans, real estate, and non-agency subordinated bonds. Its Interest Rate Sensitive Strategies segment engages in investing in mortgage servicing rights, excess servicing spreads, and agency and senior non-agency mortgage-backed securities (MBS), as well as related interest rate hedging activities. The company's Correspondent Production segment is involved in purchasing, pooling, and reselling newly originated prime credit residential loans directly or in the form of MBS. PNMAC Capital Management, LLC acts as the manager of PennyMac Mortgage Investment Trust. 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 shareholders. PennyMac Mortgage Investment Trust was founded in 2009 and is headquartered in Westlake Village, California.

How the Company Makes Money

PennyMac generates revenue primarily through the acquisition and management of mortgage-related assets, including mortgage loans and MSRs. The company earns income from the interest on loans it originates, as well as from servicing fees associated with managing the loans on behalf of investors. Additionally, PMT generates revenue through the sale of mortgage-backed securities, where it pools loans and sells them to investors, thereby earning a profit from the spread between the loan interest rates and the securities' yields. Key partnerships with financial institutions and a robust origination platform further enhance its revenue streams, allowing PMT to capitalize on market opportunities and manage risks effectively.

PennyMac Mortgage Financial Statement Overview

Summary

PennyMac Mortgage faces a challenging financial environment with declining revenue growth and high leverage. While profitability metrics are strong, the company's high debt levels and negative operating cash flow pose risks. The company needs to focus on improving revenue generation and managing debt to enhance financial stability and performance.

Income Statement

PennyMac Mortgage's income statement shows mixed results. The TTM data reveals a significant decline in revenue growth rate of -54.54%, indicating a challenging period for revenue generation. However, the company maintains a strong gross profit margin of 79.43% in the TTM, which suggests effective cost management. The net profit margin is positive at 39.04%, but the EBIT margin is negative, reflecting operational challenges. Overall, while profitability metrics are strong, the declining revenue growth is a concern.

Balance Sheet

The balance sheet indicates high leverage with a debt-to-equity ratio of 7.80 in the TTM, which poses a risk in terms of financial stability. The return on equity is modest at 5.50%, suggesting limited returns for shareholders. The equity ratio is not explicitly calculated, but the high debt levels overshadow the equity, indicating potential financial vulnerability. The company needs to manage its debt levels to improve financial stability.

Cash Flow

Cash flow analysis shows a significant improvement in free cash flow growth rate at 75.83% in the TTM, indicating better cash management. However, the operating cash flow is negative, and the operating cash flow to net income ratio is -1.41, highlighting cash flow challenges. The free cash flow to net income ratio is slightly above 1, suggesting that free cash flow is covering net income, but the negative operating cash flow remains a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	512.63M	504.60M	725.87M	-145.66M	757.48M	1.41B
Gross Profit	436.05M	380.50M	603.76M	-321.20M	448.74M	1.08B
EBITDA	371.13M	0.00	1.28B	0.00	0.00	0.00
Net Income	122.05M	160.98M	199.65M	-73.29M	56.85M	52.37M
Balance Sheet
Total Assets	18.53B	14.41B	13.11B	13.92B	13.77B	11.52B
Cash, Cash Equivalents and Short-Term Investments	263.49M	1.55B	1.62B	364.14M	226.98M	2.98B
Total Debt	3.13B	5.59B	4.85B	11.38B	11.17B	2.27B
Total Liabilities	16.65B	12.47B	11.16B	11.96B	11.41B	9.22B
Stockholders Equity	1.88B	1.94B	1.96B	1.96B	2.37B	2.30B
Cash Flow
Free Cash Flow	-4.23B	-2.73B	1.33B	1.78B	-2.79B	671.66M
Operating Cash Flow	-4.23B	-2.70B	1.34B	1.78B	-2.82B	671.66M
Investing Cash Flow	595.19M	1.36B	-21.73M	-1.87B	1.09B	-15.37M
Financing Cash Flow	3.65B	1.40B	-1.15B	135.89M	1.73B	-702.64M

PennyMac Mortgage Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PMT, the sentiment is Positive. The current price of 12.81 is above the 20-day moving average (MA) of 12.48, above the 50-day MA of 12.21, and above the 200-day MA of 12.17, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 63.20 is Neutral, neither overbought nor oversold. The STOCH value of 74.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PMT.

PennyMac Mortgage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
ORC	65 Neutral	$1.09B	14.81	7.02%	19.97%	72.30%	-54.02%
CIM	63 Neutral	$1.07B	―	2.10%	11.59%	9.46%	-111.44%
MFA	62 Neutral	$969.84M	11.15	6.90%	15.07%	5.52%	-47.72%
PMT	58 Neutral	$1.12B	14.08	6.37%	12.49%	-15.48%	-36.45%
FBRT	58 Neutral	$847.89M	13.02	5.88%	13.68%	-0.93%	-1.92%
TWO	53 Neutral	$1.05B	―	-9.69%	16.24%	22.48%	50.49%

PennyMac Mortgage Corporate Events

PennyMac Mortgage Investment Trust Reports Strong Q3 2025 Results

PennyMac Mortgage Investment Trust is a real estate investment trust (REIT) that primarily invests in residential mortgage loans and related assets, managed by PNMAC Capital Management, LLC, a subsidiary of PennyMac Financial Services, Inc.