PennyMac Mortgage (PMT)
NYSE:PMT
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PennyMac Mortgage
(NYSE:PMT)
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Rating:54Neutral
Price Target:
$11.00
â–¼(-9.02% Downside)
Action:ReiteratedDate:05/09/26
The score is held back primarily by very weak recent cash flow and a bearish technical setup (below key moving averages with negative MACD). Positives include improved TTM profitability and some balance-sheet improvement, plus earnings-call progress in securitizations/credit strategies, but guidance showing run-rate earnings below the dividend and elevated leverage/mark-to-market sensitivity keep the overall profile mid-range.
Positive Factors
Revenue & profitability rebound
The trailing-twelve-month revenue rebound and healthy gross and net margins demonstrate the firm's core mortgage-investing model can generate meaningful earnings despite market swings. Durable margin capacity supports reinvestment into securitizations and credit strategies, underpinning medium-term earnings power even as cyclicality requires monitoring.
Negative Factors
Severely negative cash flow
Persistently large negative operating and free cash flows materially constrain liquidity and force reliance on secured financing, asset sales, or securitizations to fund operations. Over the medium term this limits organic scaling of retained higher-return assets and raises funding risk if markets tighten.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue & profitability rebound
The trailing-twelve-month revenue rebound and healthy gross and net margins demonstrate the firm's core mortgage-investing model can generate meaningful earnings despite market swings. Durable margin capacity supports reinvestment into securitizations and credit strategies, underpinning medium-term earnings power even as cyclicality requires monitoring.
Read all positive factors
PennyMac Mortgage (PMT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$959.23M
Dividend Yield12.69%
Average Volume (3M)1.12M
Price to Earnings (P/E)17.9
Beta (1Y)0.36
Revenue Growth23.64%
EPS Growth24.40%
CountryUS
Employees7
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)1.16
Shares Outstanding87,202,360
10 Day Avg. Volume1,309,860
30 Day Avg. Volume1,123,441
Financial Highlights & Ratios
PEG Ratio-0.31
Price to Book (P/B)0.58
Price to Sales (P/S)1.06
P/FCF Ratio-0.15
Enterprise Value/Market Cap3.99
Enterprise Value/Revenue2.72
Enterprise Value/Gross Profit4.25
Enterprise Value/Ebitda5.78
Forecast
1Y Price Target
$12.25Price Target Upside1.32% Upside
Rating ConsensusHold
Number of Analyst Covering5
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
PMT makes money primarily through investment income and gains generated from residential mortgage-related assets. Key revenue/earnings drivers typically include: (1) Mortgage servicing rights (MSRs): PMT earns returns from the net cash flows assoc...
PennyMac Mortgage Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 28, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: clear operational and strategic progress in securitization activity and strong performance in credit-sensitive strategies (17% ROE and $744M of subordinate bonds with robust credit metrics) and an improved core leverage metric. However, material near-term headwinds persist from MSR prepayments and runoff, hedging/market-driven value volatility, a decline in the run-rate return (to $0.31 from $0.40), book value erosion (-2% QoQ), and higher consolidated leverage (total debt-to-equity ~11:1). Management is taking active steps to reallocate capital toward higher-return credit-sensitive investments and has maintained the dividend, but recurring earnings remain below the dividend level, resulting in balanced positives and negatives.Positive Updates
Net Income and EPS
Reported net income to common shareholders of $14 million, or $0.16 per diluted common share, representing a 4% annualized return on common equity.
Negative Updates
Earnings Run Rate Below Dividend and Reduced Outlook
Management disclosed an average run-rate return of $0.31 per quarter for the next year, down from a prior expectation of $0.40 (a ~22.5% reduction) and below the current $0.40 quarterly dividend, highlighting a gap between recurring earnings and dividend level.
Read all updates
Q1-2026 Updates
Positive
Negative
Net Income and EPS
Reported net income to common shareholders of $14 million, or $0.16 per diluted common share, representing a 4% annualized return on common equity.
Read all positive updates
Company Guidance
Management guided that it will maintain the common dividend at $0.40 per share even though expected run‑rate income (excluding market‑driven value changes) is $0.31 per quarter for the next year, which they expect to be fully covered by taxable income; the company plans to continue growing its private‑label securitization program (roughly 30 securitizations expected in 2026 — Q1 completed 8 totaling $2.8B UPB with $190M of retained subordinate bonds and $12M of senior bonds, plus 3 post‑quarter transactions totaling $1.1B UPB) to generate returns on equity in the low‑ to mid‑teens, and will actively reallocate equity away from lower‑returning interest‑rate‑sensitive strategies (MSRs are nearly half of shareholders’ equity with a 3.9% weighted‑average coupon) into credit‑sensitive strategies (subordinate bonds fair value $744M, 66% non‑owner‑occupied, weighted‑average FICO ~774 and origination LTV ~72; GSE CRT ~12% of equity with weighted‑average current LTV 46%); financing remains flexible after redeeming $345M of exchangeable notes, debt‑to‑equity excluding nonrecourse declined to 5.6x (total debt‑to‑equity ~11:1), and management will opportunistically sell or rotate assets (Q1 sale of $477M agency MBS) to fund higher‑return investments.PennyMac Mortgage Financial Statement Overview
Summary
Income Statement
68
Positive
Balance Sheet
54
Neutral
Cash Flow
25
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.40B | 1.03B | 504.60M | 725.87M | -145.66M | 757.48M |
| Gross Profit | 900.76M | 158.07M | 380.50M | 603.76M | -321.20M | 448.74M |
| EBITDA | 661.48M | 93.82M | 1.03B | 1.28B | 26.33M | 688.32M |
| Net Income | 142.81M | 127.87M | 160.98M | 199.65M | -73.29M | 56.85M |
Balance Sheet | ||||||
| Total Assets | 22.50B | 21.35B | 14.41B | 13.11B | 13.92B | 13.77B |
| Cash, Cash Equivalents and Short-Term Investments | 213.96M | 462.49M | 1.55B | 1.62B | 364.14M | 226.98M |
| Total Debt | 3.08B | 19.09B | 12.13B | 10.47B | 11.38B | 11.17B |
| Total Liabilities | 20.64B | 19.46B | 12.47B | 11.16B | 11.96B | 11.41B |
| Stockholders Equity | 1.87B | 1.89B | 1.94B | 1.96B | 1.96B | 2.37B |
Cash Flow | ||||||
| Free Cash Flow | -9.15B | -7.21B | -2.73B | 1.33B | 1.78B | -2.79B |
| Operating Cash Flow | -9.15B | -7.21B | -2.70B | 1.34B | 1.78B | -2.82B |
| Investing Cash Flow | 1.65B | 429.67M | 1.36B | -21.73M | -1.87B | 1.09B |
| Financing Cash Flow | 7.46B | 6.72B | 1.40B | -1.15B | 135.89M | 1.73B |
PennyMac Mortgage Technical Analysis
Positive
12.09
Price Trends
11.59
Positive
11.93
Positive
11.59
Positive
Market Momentum
0.15
Negative
63.27
Neutral
81.54
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 12.09 is above the 20-day moving average (MA) of 11.44, above the 50-day MA of 11.59, and above the 200-day MA of 11.59, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 63.27 is Neutral, neither overbought nor oversold. The STOCH value of 81.54 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 |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
64 Neutral | $1.14B | -5.98 | 0.75% | 11.40% | 10.27% | -151.66% | |
62 Neutral | $699.59M | 14.16 | 4.95% | 13.31% | 5.47% | -22.89% | |
58 Neutral | $1.32B | 9.57 | -19.11% | 14.29% | -6.44% | -1044.78% | |
57 Neutral | $1.41B | -16.67 | 10.24% | 20.03% | 81.33% | 86.84% | |
56 Neutral | $1.01B | -252.36 | 7.42% | 14.90% | 2.05% | -11.87% | |
54 Neutral | $959.23M | 17.93 | 7.06% | 12.69% | 23.64% | 24.40% |
* Real Estate Sector Average
PMT
PennyMac Mortgage
11.00
-0.31
-2.74%
CIM
Chimera Investment
13.64
2.19
19.13%
MFA
MFA Financial
9.90
1.65
20.01%
TWO
Two Harbors
12.55
2.07
19.73%
ORC
Orchid Island Capital
7.05
1.13
19.01%
FBRT
Franklin BSP Realty Trust
9.09
-1.04
-10.28%
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.