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Ready Capital Corporation (RC)
NYSE:RC
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Ready Capital
(NYSE:RC)
Rating:47Neutral
Price Target:
$4.00
â–Ľ(-5.44% Downside)
Positive Factors
Loan Originations
RC closed $784.3M of total loan originations and acquisitions, with high-margin SBA originations being very solid.
Strategic Management
Analyst's recommendation for Ready Capital stock is based on the company's strategic management changes and legal actions that have become clearer.
Negative Factors
Dividends
The quarterly dividend was reduced by 50% to $0.125 from $0.25 per share in order to preserve liquidity.
Earnings Coverage
Distributable earnings did not cover the new dividend of $0.125 per share.
Financial Performance
GAAP earnings were negatively impacted by a $285M, or $1.69 per share, increase to CECL loan loss reserves and a $29.8M, or $0.18 per share, impairment of real estate assets.
Ready Capital (RC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$701.68M
Dividend Yield17.73%
Average Volume (3M)2.06M
Price to Earnings (P/E)―
Beta (1Y)0.96
Revenue Growth-34.48%
EPS Growth-373.29%
CountryUS
Employees475
SectorReal Estate
Sector Strength49
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)-0.14
Shares Outstanding164,327,270
10 Day Avg. Volume2,134,068
30 Day Avg. Volume2,064,909
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap11.10
Enterprise Value/Revenue34.19
Enterprise Value/Gross Profit40.95
Enterprise Value/Ebitda-155.14
Forecast
1Y Price Target
$4.19Price Target Upside-0.95% Downside
Rating ConsensusHold
Number of Analyst Covering4
Ready Capital Business Overview & Revenue Model
Company DescriptionReady Capital (RC) is a real estate finance company that focuses on providing financing solutions primarily for small to mid-sized businesses and real estate investors. Operating in the commercial real estate sector, Ready Capital specializes in originating, underwriting, and servicing loans for properties such as multifamily, industrial, and office buildings. The company offers a range of products including bridge loans, permanent loans, and small business loans, catering to diverse financing needs in the market.
How the Company Makes MoneyReady Capital generates revenue primarily through interest income earned on the loans it originates and manages. The company's revenue model includes key streams such as origination fees, servicing fees, and interest income from both fixed-rate and floating-rate loans. Additionally, Ready Capital may receive fees from borrowers for loan modifications, extensions, and other ancillary services. The company has established partnerships with various financial institutions and investors, allowing it to fund loans and manage risk effectively. By leveraging these partnerships, Ready Capital can access capital markets for securitization, which further enhances its earnings potential.
Ready Capital Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Neutral
The earnings call revealed strategic initiatives aimed at repositioning and stabilizing the company's financials, including the sale of legacy assets and increasing liquidity. However, these were offset by significant losses, increased operating costs, and challenges in divestments, pointing to a complex transition period.Q3-2025 Updates
Positive Updates
Strategic Sale of Legacy Assets
Completed a bulk sale of $494 million of legacy multifamily bridge assets, generating net proceeds of $85 million, eliminating 100% of the 2021 vintage syndicated loans and resulting in an immediate increase of $0.05 per share per quarter.
Ownership and Stabilization of Portland Asset
Took ownership of a mixed-use asset in Portland, including a Ritz-Carlton Hotel, avoiding foreclosure and planning stabilization with institutional partners.
Enhanced Liquidity and Funding Capacity
Increased warehouse capacity with $71 million in proceeds from improved advance rates and closed a $100 million USDA warehouse facility.
Reduction in Noncore Portfolio
Post-settlement of the bulk sale, the noncore portfolio was reduced by an additional 52% to $333 million, minimizing financial drag.
Negative Updates
GAAP Loss from Continuing Operations
Reported a GAAP loss from continuing operations of $0.31 per common share for the second quarter, with distributable earnings at a loss of $0.14 per common share.
Increased Operating Costs
Operating costs from normal operations increased by 5% from the previous quarter to $58 million.
Negative Yield on Noncore Portfolio
The quarterly yield on the noncore portfolio was negative 10.7%, resulting in a cost of $5.3 million or negative $0.03 per share.
Divestment Challenges
The disposition of the GMFS residential mortgage banking business resulted in a cumulative loss of $3 million.
Company Guidance
During Ready Capital's second quarter 2025 earnings call, several key initiatives and metrics were highlighted, reflecting the company's strategic repositioning and financial performance outlook. Ready Capital completed a bulk sale of $494 million in legacy multifamily bridge assets, generating $85 million in net proceeds, which is expected to increase earnings by $0.05 per share per quarter by removing negative carry and an additional $0.02 per share from reinvestment. The Portland mixed-use asset, including a Ritz-Carlton Hotel, was acquired, with plans to stabilize and reduce its $5.3 million quarterly negative carry. In capital markets, Ready Capital enhanced liquidity by collapsing two CRE CLOs, improving advance rates by 7%, and increasing warehouse capacity by $75 million, supporting loan origination. The CRE loan portfolio was segmented into a $5.4 billion core and a $695 million noncore portfolio, with significant progress in liquidating underperforming assets. Despite a GAAP loss of $0.31 per share, the company anticipates modest earnings growth in the latter half of 2025, driven by new loan originations, stabilization of the Portland asset, and increased SBA 7(a) lending volumes.Ready Capital Financial Statement Overview
Summary
Ready Capital is facing significant financial challenges, with declining revenue and profitability. The high leverage and low equity ratios increase financial risk, although there are some positive cash flow signs. Immediate strategic adjustments are crucial for recovery.Income Statement
Ready Capital has experienced significant volatility in revenue and profitability. The most recent year shows a drastic decline in revenue from $1,145 million to -$101 million, alongside a negative net income of -$443 million. This indicates a severe downturn in financial performance. Historical data shows some growth until 2023, but the recent downturn is concerning.30
Negative
Balance Sheet
The company's balance sheet reflects high leverage, with a Debt-to-Equity ratio of 2.38, suggesting significant financial risk. Equity has declined over the years, although there was a temporary increase in 2023. The equity ratio remains low at 18.1%, indicating potential vulnerability in its financial structure.45
Neutral
Cash Flow
Cash flow analysis shows some resilience with positive free cash flow in recent years, although the growth rate has been inconsistent. The operating cash flow to net income ratio was positive in 2023 but deteriorated in 2024 due to negative net income. There is a need for consistent positive cash flow to stabilize financial operations.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 227.83M | 27.35M | 1.15B | 404.04M | 337.88M | 635.00M |
| Gross Profit | 190.23M | 27.35M | 1.09B | 767.50M | 535.94M | 440.12M |
| EBITDA | -50.21M | 162.02M | 899.56M | 666.90M | 427.15M | 237.92M |
| Net Income | -303.65M | -435.75M | 339.45M | 194.26M | 157.74M | 44.87M |
Balance Sheet | ||||||
| Total Assets | 9.31B | 10.14B | 12.44B | 11.62B | 9.53B | 5.37B |
| Cash, Cash Equivalents and Short-Term Investments | 162.94M | 143.80M | 148.27M | 281.68M | 229.53M | 0.00 |
| Total Debt | 720.89M | 6.04B | 7.24B | 9.34B | 7.92B | 4.12B |
| Total Liabilities | 7.37B | 8.21B | 9.79B | 9.72B | 8.25B | 4.54B |
| Stockholders Equity | 1.83B | 1.84B | 2.55B | 1.80B | 1.28B | 815.40M |
Cash Flow | ||||||
| Free Cash Flow | 310.35M | 274.81M | 51.13M | 359.15M | -3.74B | 68.89M |
| Operating Cash Flow | 310.35M | 274.81M | 51.13M | 359.15M | -34.44M | 68.89M |
| Investing Cash Flow | 1.66B | 1.54B | 1.02B | -1.56B | -1.72B | -59.44M |
| Financing Cash Flow | -2.04B | -1.88B | -1.09B | 1.17B | 1.88B | 63.05M |
Ready Capital Technical Analysis
Neutral
4.23
Price Trends
4.24
Negative
4.25
Negative
5.14
Negative
Market Momentum
<0.01
Negative
56.13
Neutral
86.98
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RC, the sentiment is Neutral. The current price of 4.23 is above the 20-day moving average (MA) of 4.01, below the 50-day MA of 4.24, and below the 200-day MA of 5.14, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 56.13 is Neutral, neither overbought nor oversold. The STOCH value of 86.98 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RC.
Ready Capital Risk Analysis
Ready Capital disclosed 128 risk factors in its most recent earnings report. Ready Capital 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
Ready Capital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $950.27M | 11.62 | 6.74% | 12.31% | -3.60% | 19.31% | |
63 Neutral | $1.15B | 11.21 | 7.32% | 10.43% | 4.83% | -25.07% | |
62 Neutral | $1.05B | 11.42 | 6.90% | 13.92% | -7.70% | 40.36% | |
54 Neutral | $634.77M | 56.21 | -1.76% | 10.47% | -20.88% | -420.89% | |
53 Neutral | $1.23B | 2.98 | -5.63% | 5.85% | -6.20% | -79.02% | |
47 Neutral | $701.68M | ― | -13.92% | 17.73% | -34.48% | -373.29% | |
46 Neutral | $790.85M | 28.34 | -6.97% | 11.56% | 31.71% | -499.14% |
* Real Estate Sector Average
Performance Comparison
RC
Ready Capital
4.23
-2.78
-39.66%
CIM
Chimera Investment
14.19
0.29
2.09%
MFA
MFA Financial
10.20
-0.51
-4.76%
RWT
Redwood
6.14
-0.48
-7.25%
KREF
Kkr Real Estate Finance
9.55
-1.48
-13.42%
FBRT
Franklin BSP Realty Trust
11.54
-0.15
-1.28%
Ready Capital Corporate Events
Executive/Board ChangesShareholder Meetings
Ready Capital Holds Virtual Annual Stockholders’ Meeting
Neutral
Jul 1, 2025
On June 25, 2025, Ready Capital Corporation conducted its annual stockholders’ meeting virtually, where all seven director nominees were elected to serve until 2026. The stockholders also ratified Deloitte & Touche LLP as the independent registered public accounting firm for 2025, approved executive compensation, and determined the frequency of future advisory votes on executive compensation.
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.