PennyMac Mortgage (PMT) AI Stock Analysis

• Market Cap: $1.10B
• Dividend Yield: 12.7%
• Average Volume (3M): 719.85K
• Price to Earnings (P/E): 17.4
• Beta (1Y): 0.51
• Revenue Growth: 1.71%
• EPS Growth: -56.69%
• Country: US
• Employees: 7
• Sector: Real Estate
• Sector Strength: 52
• Industry: REIT - Mortgage
• EPS (TTM): -0.04
• Shares Outstanding: 87,016,600
• 10 Day Avg. Volume: 644,505
• 30 Day Avg. Volume: 719,854
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 14.36
• Enterprise Value/Revenue: 136.46
• Enterprise Value/Gross Profit: 43.32
• Enterprise Value/Ebitda: 14.19
• 1Y Price Target: $13.10
• Price Target Upside: 3.97% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 57 Neutral
• Price Target: $13.00 ▲(3.17% Upside)

PennyMac Mortgage's overall stock score reflects significant financial challenges, with high leverage and negative cash flows being major concerns. However, the stock's valuation is supported by a high dividend yield, and recent corporate events and technical indicators provide some stability. The company's strategic initiatives in securitizations and MSR investments offer potential for future growth.

Positive Factors

Dividends

There could be a growing case for the equity if it manages to raise the dividend to align with accretive returns from completing more private-label securitizations.

Stock Performance

The stock rallied on good earnings results.

Negative Factors

Dividend Yield

The dividend yield at 12% remains lower than in the other REIT-servicers Annaly and Two Harbors.

Origination Volume

Origination volume declined sequentially to $3.5 billion of correspondent loans acquired for PMT.

PennyMac Mortgage Business Overview & Revenue Model

Company Description

PennyMac Mortgage Investment Trust (PMT) is a publicly traded real estate investment trust (REIT) that primarily focuses on investing in mortgage-related assets. Founded in 2008, the company operates through various sectors, including residential mortgage loans, mortgage servicing rights (MSRs), and mortgage-backed securities (MBS). PennyMac is known for its comprehensive array of mortgage solutions, catering to different borrower needs, and its commitment to providing innovative financing options.

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 is facing financial challenges with declining revenues, high leverage, and negative cash flows. Despite strong gross profit and EBITDA margins, profitability is hindered by significant EBIT losses. The high debt burden may limit financial flexibility.

Income Statement

PennyMac Mortgage faced challenges in maintaining revenue stability, with a significant drop in total revenue to $406 million TTM from $725 million the previous year. The Gross Profit Margin is strong at 90.14%, indicating efficient cost management. However, the negative EBIT margin of -52.61% and the drop in net income to $123 million signal profitability issues. The EBITDA margin remains robust at 201.05%, showing good operational performance despite the earnings loss.

Balance Sheet

The debt-to-equity ratio of 1.82 suggests a high level of leverage, which could pose risks in economic downturns. The equity ratio is relatively low at 12.79%, indicating limited reliance on equity financing. Return on Equity (ROE) is positive at 6.47%, reflecting some profitability. The company's high debt levels could affect future growth and financial stability.

Cash Flow

The cash flow analysis shows challenges, with a negative free cash flow of -$2.97 billion TTM. Operating cash flow is negative, indicating potential cash management issues. Both operating and free cash flow ratios to net income are concerning, suggesting the company is struggling to convert earnings into cash effectively. This could impact liquidity and operational flexibility.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.72M	725.87M	-145.66M	1.32B	1.47B
Gross Profit	1.94M	603.76M	-321.20M	985.98M	1.11B
EBITDA	1.03B	1.28B	26.33M	688.32M	1.29B
Net Income	160.98M	199.65M	-73.29M	56.85M	52.37M
Balance Sheet
Total Assets	14.41B	13.11B	13.92B	13.77B	11.52B
Cash, Cash Equivalents and Short-Term Investments	337.69M	409.42M	364.14M	1.93B	2.98B
Total Debt	12.13B	4.85B	11.57B	11.22B	2.27B
Total Liabilities	12.47B	11.16B	11.96B	11.41B	9.22B
Stockholders Equity	1.94B	1.96B	1.96B	2.37B	2.30B
Cash Flow
Free Cash Flow	-2.73B	1.33B	1.78B	-2.79B	671.66M
Operating Cash Flow	-2.73B	1.34B	1.78B	-2.82B	671.66M
Investing Cash Flow	1.36B	-21.73M	-1.87B	1.09B	-15.37M
Financing Cash Flow	1.40B	-1.15B	135.89M	1.73B	-702.64M

PennyMac Mortgage Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 12.6 is above the 20-day moving average (MA) of 12.20, above the 50-day MA of 12.35, and above the 200-day MA of 12.45, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 59.12 is Neutral, neither overbought nor oversold. The STOCH value of 91.20 is Negative, 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
EFC	69 Neutral	$1.38B	11.40	8.81%	11.28%	20.32%	1.58%
Sector *	63 Neutral	$7.09B	13.59	-0.50%	6.85%	4.08%	-25.24%
DX	60 Neutral	$1.68B	16.49	4.93%	14.55%	35.01%	1115.85%
PMT	57 Neutral	$1.10B	17.39	5.50%	12.70%	1.71%	-56.69%
ARI	57 Neutral	$1.53B	―	-0.35%	9.11%	-26.29%	-342.06%
TWO	55 Neutral	$1.08B	5.06	-14.78%	16.80%	-21.95%	-528.94%
ARR	48 Neutral	$1.78B	8.01	-2.04%	18.20%	157.34%	91.67%

PennyMac Mortgage Corporate Events

PennyMac Mortgage Holds Successful Annual Shareholder Meeting

On June 24, 2025, PennyMac Mortgage Investment Trust held its Annual Meeting of Shareholders to elect three Class I trustees, ratify Deloitte & Touche LLP as the independent accounting firm for 2025, and approve executive compensation. The meeting saw 81.9% of eligible shares represented, with significant support for the trustee nominees and the ratification of the accounting firm, reflecting shareholder confidence in the company’s governance and strategic direction.

PennyMac Mortgage Closes $105M Senior Notes Offering

On June 10, 2025, PennyMac Mortgage Investment Trust successfully closed a public offering of $105 million in 9.00% Senior Notes due 2030, including a partial exercise of an over-allotment option. The Notes, guaranteed by PennyMac Corp., are set to mature in 2030 and have been approved for listing on the New York Stock Exchange under the symbol ‘PMTW’. The offering, underwritten by major financial firms, is expected to generate net proceeds of approximately $101 million, which could increase if the remaining over-allotment option is exercised.