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PennyMac Mortgage
(NYSE:PMT)
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Rating:55Neutral
Price Target:
$9.50
â–¼(-2.46% Downside)
Action:Reiterated
Date:08/06/26
The score is weighed down primarily by weak financial resilience (very high leverage and deeply negative/volatile recent cash flow) and a bearish technical setup (below major moving averages with negative MACD). These risks are partially offset by low headline valuation (P/E ~6.6) and an earnings-call backdrop showing operational momentum and improved run-rate guidance, though dividend coverage remains a key concern.
Positive Factors
Private-label securitizations
A sustained ramp in private‑label securitizations builds an organic, repeatable origination and fee-generation engine. Retaining subordinate bonds and MSR interests creates a durable source of higher-yielding, credit-sensitive income that diversifies reliance on agency spreads.
Negative Factors
Very high leverage
Extremely elevated leverage materially increases sensitivity to funding costs, margin compression, and market liquidity stress. Over a multi-month horizon, high debt amplifies losses on valuation swings and limits management flexibility for opportunistic capital deployment.
Read all positive and negative factors
Positive Factors
Negative Factors
Private-label securitizations
A sustained ramp in private‑label securitizations builds an organic, repeatable origination and fee-generation engine. Retaining subordinate bonds and MSR interests creates a durable source of higher-yielding, credit-sensitive income that diversifies reliance on agency spreads.
Read all positive factors
PennyMac Mortgage (PMT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$824.06M
Dividend Yield16.88%
Average Volume (3M)1.69M
Price to Earnings (P/E)6.6
Beta (1Y)0.34
Revenue Growth21.86%
EPS Growth97.23%
CountryUS
Employees7
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)1.44
Shares Outstanding87,202,360
10 Day Avg. Volume1,519,763
30 Day Avg. Volume1,693,704
Financial Highlights & Ratios
PEG Ratio-0.46
Price to Book (P/B)0.58
Price to Sales (P/S)0.63
P/FCF Ratio-0.15
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$10.67Price Target Upside9.51% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)1.09
Revenue Forecast (FY)$373.58M
PennyMac Mortgage Business Overview & Revenue Model
Company Description
PennyMac Mortgage Investment Trust (PMT) functions as a specialized financial firm, concentrating its investments primarily on mortgage-related assets within the United States. The company operates through several key divisions: Its Credit Sensiti...
How the Company Makes Money
PMT generates earnings primarily through a combination of (1) net interest income and (2) production/transaction-related income tied to buying, selling, and securitizing residential mortgage loans.
1) Net interest income from mortgage-related inv...
PennyMac Mortgage Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call described meaningful operational momentum in the company’s core strategic initiative—private-label securitizations—with strong organic investment creation, increased retained bond balances, rising income excluding market-driven changes, and a clear plan to redeploy capital away from lower-return MSR investments (including a $13 billion MSR sale). Offsetting these positives are lower near-term contributions from certain credit-sensitive and aggregation activities, ongoing earnings (ex-market changes) that remain below the dividend level, modest book value decline, and higher leverage ratios due to consolidation of securitizations. Management emphasized active portfolio management, effective hedging, and confidence in dividend coverage, suggesting the company is taking concrete steps to address challenges while capitalizing on securitization opportunities.Positive Updates
Net Income and EPS
Second quarter net income to common shareholders of $20 million, or $0.23 per diluted common share, representing a 6% annualized return on common equity.
Negative Updates
Lower Contribution from Credit Sensitive and Aggregation Strategies
Earnings were impacted by a lower contribution from Credit Sensitive Strategies driven by market-driven value declines; aggregation and securitization pretax income declined to $11 million from $16 million QoQ, with net gains on loans acquired for sale down approximately $8 million due to lower volumes.
Read all updates
Q2-2026 Updates
Positive
Negative
Net Income and EPS
Second quarter net income to common shareholders of $20 million, or $0.23 per diluted common share, representing a 6% annualized return on common equity.
Read all positive updates
Company Guidance
Management guided to a run‑rate return of $0.33 per quarter for the next year (up from $0.31 previously) while maintaining the quarterly common dividend at $0.40 per share, which they expect taxable income to be sufficient to cover; they reiterated a strategic pivot toward private‑label securitizations (on pace for ~30 securitizations in 2026) after completing 6 Q2 securitizations totaling $2.2B UPB (plus two post‑quarter deals totaling $692M) that retained $120M of subordinate bonds and $31M of new MSRs, and they expect to add more than $600M of retained bonds through 2026 (retained bonds FV $936M at quarter end; 63% non‑owner occupied, 21% jumbo; WA FICO 774; WA LTV 72%); they also entered an agreement to sell $13B UPB of low‑coupon agency MSRs (expected close end of August) and signaled redeploying equity into higher‑yielding credit‑sensitive investments while monitoring leverage (debt‑to‑equity ex‑nonrecourse 6.2x vs. 5.6x prior quarter; total debt‑to‑equity ~12:1 vs. 11:1).PennyMac Mortgage Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
38
Negative
Cash Flow
24
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.65B | 1.74B | 504.60M | 725.87M | -145.66M | 757.48M |
| Gross Profit | 1.31B | 1.60B | 380.50M | 603.76M | -321.20M | 448.74M |
| EBITDA | 972.47M | 93.82M | 1.03B | 1.28B | 33.08M | 688.32M |
| Net Income | 166.27M | 127.87M | 160.98M | 199.65M | -73.29M | 56.85M |
Balance Sheet | ||||||
| Total Assets | 25.09B | 21.35B | 14.41B | 13.11B | 13.92B | 13.77B |
| Cash, Cash Equivalents and Short-Term Investments | 421.00M | 462.49M | 1.55B | 1.62B | 364.14M | 226.98M |
| Total Debt | 22.92B | 19.09B | 12.13B | 10.47B | 11.38B | 11.17B |
| Total Liabilities | 23.20B | 19.46B | 12.47B | 11.16B | 11.96B | 11.41B |
| Stockholders Equity | 1.85B | 1.89B | 1.94B | 1.96B | 1.96B | 2.37B |
Cash Flow | ||||||
| Free Cash Flow | -10.07B | -7.21B | -2.73B | 1.33B | 1.78B | -2.79B |
| Operating Cash Flow | -10.07B | -7.21B | -2.70B | 1.34B | 1.78B | -2.82B |
| Investing Cash Flow | 1.71B | 429.67M | 1.36B | -21.73M | -1.87B | 1.09B |
| Financing Cash Flow | 8.23B | 6.72B | 1.40B | -1.15B | 135.89M | 1.73B |
PennyMac Mortgage Technical Analysis
Negative
9.74
Price Trends
9.85
Negative
10.36
Negative
10.92
Negative
Market Momentum
-0.16
Positive
43.88
Neutral
56.75
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PMT, the sentiment is Negative. The current price of 9.74 is above the 20-day moving average (MA) of 9.63, below the 50-day MA of 9.85, and below the 200-day MA of 10.92, indicating a bearish trend. The MACD of -0.16 indicates Positive momentum. The RSI at 43.88 is Neutral, neither overbought nor oversold. The STOCH value of 56.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PMT.
PennyMac Mortgage Risk Analysis
PennyMac Mortgage disclosed 73 risk factors in its most recent earnings report. PennyMac 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
PennyMac Mortgage Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
56 Neutral | $927.99M | 6.93 | 8.23% | 15.75% | 19.70% | 13.45% | |
56 Neutral | $1.31B | 4.47 | 25.58% | 21.10% | 89.39% | 661.99% | |
55 Neutral | $824.06M | 6.58 | 8.88% | 16.43% | 21.86% | 97.23% | |
55 Neutral | $660.21M | 17.82 | 4.45% | 14.21% | 11.14% | -54.56% | |
54 Neutral | $1.26B | -16.60 | -1.23% | 11.24% | 18.65% | 78.83% | |
49 Neutral | $996.17M | -15.83 | 0.05% | 13.12% | 14.40% | -178.46% |
* Real Estate Sector Average
PMT
PennyMac Mortgage
9.48
-1.21
-11.29%
CIM
Chimera Investment
11.84
-0.33
-2.74%
MFA
MFA Financial
9.15
0.76
9.01%
TWO
Two Harbors
12.04
3.01
33.29%
ORC
Orchid Island Capital
6.62
0.70
11.88%
FBRT
Franklin BSP Realty Trust
8.05
-1.89
-19.05%
PennyMac Mortgage Corporate Events
Executive/Board ChangesShareholder Meetings
PennyMac Mortgage Adds Trustee, Shareholders Back Governance
Positive
Jun 16, 2026
On June 15, 2026, PennyMac Mortgage Investment Trust appointed veteran financial executive Scott Sauer as a Class III trustee and member of its Risk Committee, aligning his compensation with other non-management trustees and granting him a prorate...
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.