PennyMac Mortgage (PMT)
NYSE:PMT
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PennyMac Mortgage
(NYSE:PMT)
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Rating:55Neutral
Price Target:
$13.00
â–²(9.52% Upside)
Action:ReiteratedDate:02/19/26
The score is held back primarily by elevated leverage and inconsistent cash flow, which increase financial risk. Valuation is a support due to a moderate P/E and very high dividend yield, while technicals are neutral-to-soft and the latest earnings call was moderately positive on strategy and ROE targets despite some near-term earnings pressure.
Positive Factors
Scaled securitization program
Rapidly scaling private-label securitizations creates a durable origination and distribution engine. Larger retained positions let PMT capture higher carry and structuring economics, deepen non-agency inventory, and produce recurring securitization fee and gain opportunities supporting mid-term earnings.
Negative Factors
Very high leverage
Elevated debt-to-equity markedly increases funding, liquidity and interest-rate sensitivity typical of leveraged REITs. Such leverage constrains flexibility, amplifies earnings volatility from spread compression or rising funding costs, and raises refinancing and counterparty risks over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Scaled securitization program
Rapidly scaling private-label securitizations creates a durable origination and distribution engine. Larger retained positions let PMT capture higher carry and structuring economics, deepen non-agency inventory, and produce recurring securitization fee and gain opportunities supporting mid-term earnings.
Read all positive factors
PennyMac Mortgage (PMT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.06B
Dividend Yield12.69%
Average Volume (3M)1.13M
Price to Earnings (P/E)8.5
Beta (1Y)0.41
Revenue Growth-15.48%
EPS Growth-36.45%
CountryUS
Employees7
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.48
Shares Outstanding87,016,600
10 Day Avg. Volume1,221,003
30 Day Avg. Volume1,133,966
Financial Highlights & Ratios
PEG Ratio-0.31
Price to Book (P/B)0.58
Price to Sales (P/S)0.63
P/FCF Ratio7.67
Enterprise Value/Market Cap18.83
Enterprise Value/Revenue15.90
Enterprise Value/Gross Profit17.83
Enterprise Value/Ebitda15.28
Forecast
1Y Price Target
$13.17Price Target Upside10.92% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)1.56
Revenue Forecast (FY)$387.93M
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,...
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...
PennyMac Mortgage Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive transformation story: PMT materially scaled its private label securitization activity (19 deals / $6.7B UPB in 2025), grew retained investments nearly tenfold, achieved solid Q4 earnings ($42M, 13% ROE), and delivered attractive returns from credit-sensitive strategies. Challenges include a modest decline in run-rate EPS, a significant quarter-over-quarter drop in interest-rate sensitive income excluding market-driven value changes (driven by higher MSR prepayments and runoff), a small pretax loss in Correspondent Production, and an increase in reported debt-to-equity due to consolidation of securitization debt. On balance, the strategic momentum, strong securitization pipeline, high credit-strategy ROEs, and maintained core leverage profile outweigh the near-term operational headwinds.Positive Updates
Strong Quarterly Earnings and ROE
Net income to common shareholders of $42 million in Q4 2025, $0.48 diluted EPS, representing a 13% annualized return on common equity; book value per share increased to $15.25 from $15.16 (≈+0.6%).
Negative Updates
Decline in Run-Rate Earnings per Share
Average quarterly run-rate return potential decreased to $0.40 per share from $0.42 per share in the prior quarter (≈-4.8%), reflecting some pressure on recurring earnings.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Quarterly Earnings and ROE
Net income to common shareholders of $42 million in Q4 2025, $0.48 diluted EPS, representing a 13% annualized return on common equity; book value per share increased to $15.25 from $15.16 (≈+0.6%).
Read all positive updates
Company Guidance
Management guided that PMT expects to complete approximately 30 securitizations in 2026, targeting low‑ to mid‑teens ROE on retained investments and aiming to lift equity allocated to non‑agency securitizations from a ~9% 12‑month average to roughly 11–12% by year‑end, while optimizing toward overall targeted ROEs of 13–15%. They reiterated a quarterly run‑rate per‑share expectation of $0.40 (down from $0.42), noted the interest‑rate‑sensitive strategy’s overall run‑rate ROE of ~12.5% (interest‑rate sensitive pretax contribution $28M, 10% annualized ROE) and MSR fair‑value of $3.6B, and said MSR runoff and higher prepayments reduced income excluding market‑driven changes to $21M (from $36M). Q4 results included net income to common shareholders of $42M ($0.48 diluted, 13% annualized ROE), credit‑sensitive pretax income of $24M (27% annualized ROE) with $12M in CRT gains, subordinate MBS gains of $11M, servicing advances of $97M (up from $63M), and book value per share of $15.25 (up from $15.16). They summarized 2025 activity (19 securitizations totaling $6.7B UPB with retained investments rising to $528M from $54M in 2024), Q4 securitizations (8 deals, $2.8B UPB, $184M retained; plus $1.1B in 3 post‑quarter deals), PFSI production UPB of $3.7B (2.9B conventional, $0.8B non‑agency), with PMT buying 17% of conventional and 100% of non‑agency (expecting 15–25%/100% in Q1 2026), acquisition of $1.8B UPB for securitizations, an unchanged fulfillment fee of 18 bps, $150M of new unsecured financing raised, plan to retire $345M exchangeable notes due 2026, and leverage of ~10:1 total debt‑to‑equity (6:1 excluding nonrecourse).PennyMac Mortgage Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
38
Negative
Cash Flow
44
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.74B | 504.60M | 725.87M | -145.66M | 757.48M |
| Gross Profit | 1.60B | 380.50M | 603.76M | -321.20M | 448.74M |
| EBITDA | 964.28M | 1.03B | 1.28B | 26.33M | 688.32M |
| Net Income | 127.87M | 160.98M | 199.65M | -73.29M | 56.85M |
Balance Sheet | |||||
| Total Assets | 21.35B | 14.41B | 13.11B | 13.92B | 13.77B |
| Cash, Cash Equivalents and Short-Term Investments | 462.49M | 1.55B | 1.62B | 364.14M | 226.98M |
| Total Debt | 19.09B | 12.13B | 10.47B | 11.38B | 11.17B |
| Total Liabilities | 19.46B | 12.47B | 11.16B | 11.96B | 11.41B |
| Stockholders Equity | 1.89B | 1.94B | 1.96B | 1.96B | 2.37B |
Cash Flow | |||||
| Free Cash Flow | 142.29M | -2.73B | 1.33B | 1.78B | -2.79B |
| Operating Cash Flow | 142.29M | -2.70B | 1.34B | 1.78B | -2.82B |
| Investing Cash Flow | 429.67M | 1.36B | -21.73M | -1.87B | 1.09B |
| Financing Cash Flow | 6.72B | 1.40B | -1.15B | 135.89M | 1.73B |
PennyMac Mortgage Technical Analysis
Positive
11.87
Price Trends
11.59
Positive
11.92
Negative
11.58
Positive
Market Momentum
0.13
Negative
58.47
Neutral
84.04
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 11.87 is above the 20-day moving average (MA) of 11.40, above the 50-day MA of 11.59, and above the 200-day MA of 11.58, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 58.47 is Neutral, neither overbought nor oversold. The STOCH value of 84.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
67 Neutral | $1.03B | 5.46 | 9.66% | 14.90% | 5.52% | -47.72% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
58 Neutral | $1.40B | 2.89 | 15.05% | 20.03% | 72.30% | -54.02% | |
55 Neutral | $1.06B | 8.54 | 6.79% | 12.69% | -15.48% | -36.45% | |
54 Neutral | $723.83M | 9.99 | 5.60% | 13.31% | -0.93% | -1.92% | |
53 Neutral | $1.14B | 4.43 | 8.85% | 11.40% | 9.46% | -111.44% | |
51 Neutral | $1.17B | -2.41 | -23.93% | 14.29% | 22.48% | 50.49% |
* Real Estate Sector Average
PMT
PennyMac Mortgage
11.87
0.46
3.99%
CIM
Chimera Investment
13.36
3.26
32.26%
MFA
MFA Financial
9.94
2.23
28.96%
TWO
Two Harbors
11.13
1.53
15.96%
ORC
Orchid Island Capital
6.80
1.44
26.82%
FBRT
Franklin BSP Realty Trust
8.82
-1.22
-12.18%
PennyMac Mortgage Corporate Events
Business Operations and StrategyPrivate Placements and Financing
PennyMac Mortgage Issues Additional 2029 Exchangeable Senior Notes
Positive
Dec 22, 2025
On December 22, 2025, PennyMac Corp., an indirect wholly owned subsidiary of PennyMac Mortgage Investment Trust, issued an additional $75 million of its 8.500% Exchangeable Senior Notes due 2029 in a registered direct placement, bringing the total...
Business Operations and StrategyPrivate Placements and Financing
PennyMac Mortgage Issues $75M in Senior Notes
Neutral
Dec 16, 2025
On December 15, 2025, PennyMac Corp., a subsidiary of PennyMac Mortgage Investment Trust, issued $75 million in 8.500% Exchangeable Senior Notes due 2029. This issuance was part of a reopening of notes previously issued in May 2024, bringing the t...
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.