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Ready Capital (RC)
NYSE:RC
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Ready Capital
(NYSE:RC)
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Rating:44Neutral
Price Target:
$2.00
▼(-4.76% Downside)
The score is held down primarily by deteriorating financial performance (negative revenue and sizable net losses) and a bearish technical setup (below key moving averages with negative MACD). A very high dividend yield and improved TTM cash generation provide some support but do not outweigh the current loss profile and weak trend.
Positive Factors
Cash Flow Resilience
Positive free cash flow indicates Ready Capital's ability to generate cash, which is crucial for maintaining operations and servicing debt despite revenue challenges.
Partnerships for Capital Access
Strategic partnerships enhance Ready Capital's ability to access capital markets for securitization, supporting its lending capacity and risk management.
High Dividend Yield
A high dividend yield can attract income-focused investors, providing a buffer against stock price volatility and supporting shareholder returns.
Negative Factors
Declining Revenue
A significant revenue decline reflects operational challenges and market pressures, impacting Ready Capital's ability to sustain growth and profitability.
High Leverage
High leverage increases financial risk, potentially limiting Ready Capital's flexibility to invest in growth opportunities and manage economic downturns.
Negative Profitability
Sustained negative profitability undermines Ready Capital's financial health, necessitating strategic adjustments to improve operational efficiency and cost management.
Ready Capital (RC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$350.19M
Dividend Yield26.82%
Average Volume (3M)5.07M
Price to Earnings (P/E)―
Beta (1Y)0.88
Revenue Growth-43.56%
EPS Growth-166.72%
CountryUS
Employees475
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)-0.94
Shares Outstanding162,126,280
10 Day Avg. Volume3,448,467
30 Day Avg. Volume5,072,506
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)0.63
Price to Sales (P/S)42.16
P/FCF Ratio-22.52
Enterprise Value/Market Cap12.19
Enterprise Value/Revenue-461.73
Enterprise Value/Gross Profit-142.07
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.43Price Target Upside15.71% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering3
EPS Forecast (FY)-0.25
Revenue Forecast (FY)$308.27M
Ready Capital Business Overview & Revenue Model
Company DescriptionReady Capital Corporation operates as a real estate finance company in the United States. The company acquires, originates, manages, services, and finances small to medium balance commercial (SBC) loans, small business administration (SBA) loans, residential mortgage loans, and mortgage backed securities collateralized primarily by SBC loans, or other real estate-related investments. It operates through three segments: SBC Lending and Acquisitions; Small Business Lending; and Residential Mortgage Banking. The SBC Lending and Acquisitions segment, through its subsidiary, ReadyCap Commercial, LLC, originate SBC loans secured by stabilized or transitional investor properties using various loan origination channels. The Small Business Lending segment, through its subsidiary, ReadyCap Lending, LLC, acquires, originates, and services owner-occupied loans guaranteed by the SBA under its SBA Section 7(a) Program. The Residential Mortgage Banking segment, through its subsidiary, GMFS, LLC, originates residential mortgage loans. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as Sutherland Asset Management Corporation and changed its name to Ready Capital Corporation in September 2018. Ready Capital Corporation was founded in 2007 and is headquartered in New York, New York.
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:Nov 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 11, 2026
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
Overall financials are fragile: revenue turned negative with a sharp collapse (TTM revenue growth -127%) and profitability remains deeply loss-making (TTM net income -$311M). Leverage has improved materially (debt-to-equity down to ~2.1x TTM), and TTM operating/free cash flow is positive (~$366M), but cash flows have been volatile and ROE is negative (~-16.8%).Income Statement
Performance has deteriorated sharply: TTM (Trailing-Twelve-Months) revenue turned negative and collapsed versus the prior period (revenue growth -127%), while profitability swung deeply into losses (TTM net income -$311M after a -$436M loss in 2024). Although 2022–2023 showed solid revenue scale and positive earnings, the most recent results indicate severe pressure on earnings quality and business momentum.Balance Sheet
Leverage remains high for a mortgage REIT, though it has improved: debt-to-equity declined from ~5.1–5.5x (2020–2022) to ~2.1x in TTM (Trailing-Twelve-Months). However, returns to shareholders are currently negative (TTM return on equity about -16.8%), and equity has trended down from 2023 to TTM, reflecting recent losses and weaker capital durability.Cash Flow
Cash generation is currently a relative bright spot, with TTM (Trailing-Twelve-Months) operating cash flow and free cash flow both positive at ~$366M, a notable reversal from negative operating/free cash flow in 2024. That said, cash flow has been volatile over time (including deeply negative free cash flow in 2021) and the TTM free-cash-flow growth rate is sharply negative, suggesting the recent improvement may not be stable.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | -9.25M | 27.35M | 389.94M | 383.33M | 296.34M | 384.65M |
| Gross Profit | -30.06M | 27.35M | 389.94M | 383.33M | 296.34M | 384.65M |
| EBITDA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Net Income | -310.87M | -435.75M | 339.45M | 194.26M | 157.74M | 44.87M |
Balance Sheet | ||||||
| Total Assets | 8.33B | 10.14B | 12.44B | 11.62B | 9.53B | 5.37B |
| Cash, Cash Equivalents and Short-Term Investments | 147.51M | 143.80M | 148.27M | 281.68M | 229.53M | 0.00 |
| Total Debt | 3.78B | 6.04B | 7.24B | 9.34B | 7.92B | 4.12B |
| Total Liabilities | 6.46B | 8.21B | 9.79B | 9.72B | 8.25B | 4.54B |
| Stockholders Equity | 1.77B | 1.84B | 2.55B | 1.80B | 1.28B | 815.40M |
Cash Flow | ||||||
| Free Cash Flow | 366.24M | -51.22M | 33.07M | 359.15M | -3.74B | 68.89M |
| Operating Cash Flow | 366.24M | -51.22M | 33.07M | 359.15M | -34.44M | 68.89M |
| Investing Cash Flow | 1.93B | 1.86B | 1.04B | -1.56B | -1.72B | -59.44M |
| Financing Cash Flow | -2.35B | -1.88B | -1.09B | 1.17B | 1.88B | 63.05M |
Ready Capital Technical Analysis
Negative
2.10
Price Trends
2.46
Negative
3.11
Negative
3.65
Negative
Market Momentum
-0.12
Negative
38.13
Neutral
44.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RC, the sentiment is Negative. The current price of 2.1 is below the 20-day moving average (MA) of 2.19, below the 50-day MA of 2.46, and below the 200-day MA of 3.65, indicating a bearish trend. The MACD of -0.12 indicates Negative momentum. The RSI at 38.13 is Neutral, neither overbought nor oversold. The STOCH value of 44.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
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 | $709.83M | 13.69 | 5.87% | 10.48% | -10.86% | -5.90% | |
56 Neutral | $627.16M | 17.58 | 6.56% | 16.08% | 48624.87% | -57.39% | |
52 Neutral | $526.49M | -22.54 | -0.16% | 11.33% | -24.37% | -19.19% | |
47 Neutral | $395.42M | -1.06 | -19.24% | ― | -65.32% | -325.73% | |
46 Neutral | $105.24M | -1.51 | -9.11% | 7.97% | -28.13% | 62.49% | |
44 Neutral | $350.19M | ― | -14.78% | 26.82% | -43.56% | -166.72% |
* Real Estate Sector Average
RC
Ready Capital
2.07
-4.01
-65.95%
IVR
Invesco Mortgage
8.96
2.49
38.49%
KREF
Kkr Real Estate Finance
7.84
-1.67
-17.56%
GPMT
Granite Point Mortgage
2.20
-0.38
-14.73%
TRTX
Tpg Re Finance
8.92
1.45
19.41%
CMTG
Claros Mortgage Trust
2.80
-1.28
-31.37%
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.