Rithm Capital (RITM) AI Stock Analysis

• Market Cap: $6.16B
• Dividend Yield: 9%
• Average Volume (3M): 5.61M
• Price to Earnings (P/E): 7.7
• Beta (1Y): 0.60
• Revenue Growth: -1.07%
• EPS Growth: 47.50%
• Country: US
• Employees: 6,045
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): 0.54
• Shares Outstanding: 554,196,660
• 10 Day Avg. Volume: 5,330,403
• 30 Day Avg. Volume: 5,608,200
• PEG Ratio: 0.11
• Price to Book (P/B): 0.69
• Price to Sales (P/S): 1.13
• P/FCF Ratio: -2.32
• Enterprise Value/Market Cap: 6.65
• Enterprise Value/Revenue: 8.23
• Enterprise Value/Gross Profit: 8.88
• Enterprise Value/Ebitda: 16.69
• 1Y Price Target: $14.75
• Price Target Upside: 32.76% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 2.13
• Revenue Forecast (FY): $4.47B

• Rating: 59 Neutral
• Price Target: $12.00 ▲(8.01% Upside)

Rithm Capital's overall stock score is primarily impacted by its financial challenges, including high leverage and inconsistent cash flow. However, the company's attractive valuation and strategic acquisitions provide potential for future growth. The technical analysis presents mixed signals, and while the earnings call was positive, concerns about stock price underperformance remain.

Positive Factors

Strategic Acquisitions

The acquisition of Crestline Management strengthens Rithm's asset management capabilities, expanding its investable assets to $102 billion, which can drive long-term growth and diversification in revenue streams.

Increased Liquidity

Maintaining $2.2 billion in cash and liquidity provides Rithm with financial flexibility to pursue strategic investments and manage debt, supporting sustainable growth and stability.

New Product Offerings

Introducing new product offerings such as home improvement loans diversifies Rithm's portfolio and enhances its ability to capture market opportunities, potentially increasing revenue and market share.

Negative Factors

High Leverage

High leverage with a debt-to-equity ratio above 4.0 increases financial risk, potentially limiting Rithm's ability to invest in growth opportunities and making it vulnerable to interest rate fluctuations.

Inconsistent Cash Flow

Inconsistent cash flow and recent negative operating cash flow indicate liquidity challenges, which can constrain Rithm's operational flexibility and ability to fund new investments or manage debt effectively.

Declining Revenue

A significant decline in revenue and negative margins suggest operational inefficiencies and market challenges, potentially impacting Rithm's ability to sustain profitability and competitive positioning.

Rithm Capital Business Overview & Revenue Model

Company Description

Rithm Capital Corp. provides capital and services to the real estate and financial services sectors in the United States. Its investment portfolio comprises mortgage servicing related assets, residential securities and loans, and consumer loans. It qualifies as a real estate investment trust for federal income tax purposes. The company 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 New Residential Investment Corp. and changed its name to Rithm Capital Corp. in August 2022. Rithm Capital Corp. was incorporated in 2011 and is headquartered in New York, New York.

How the Company Makes Money

Rithm Capital generates revenue through several key streams, primarily from interest income on its mortgage loans and mortgage-related assets. The company earns interest from the loans it originates or acquires, as well as from the servicing of these loans. Additionally, Rithm Capital may generate income through asset management fees, which are charged for managing investment portfolios on behalf of third-party clients. The company also benefits from gains on sales of assets, as well as potential dividends from investments in other real estate-related entities. Strategic partnerships with financial institutions and mortgage servicers further enhance its revenue-generating capabilities, allowing for a diversified income stream that can adapt to market conditions.

Rithm Capital Financial Statement Overview

Summary

Rithm Capital faces significant financial challenges, including declining revenues, high leverage, and inconsistent cash flow generation. The company's financial health is under pressure, with operational inefficiencies and market volatility impacting performance. While there are periods of profitability, the overall trajectory suggests a need for strategic adjustments to stabilize and improve financial outcomes.

Income Statement

Rithm Capital's income statement reveals significant volatility. The TTM data shows a drastic decline in revenue and negative margins, indicating operational challenges. Historical data shows fluctuating revenue growth rates and inconsistent profitability, with recent periods showing negative EBIT and EBITDA margins. This suggests potential operational inefficiencies and market challenges.

Balance Sheet

The balance sheet indicates high leverage, with a debt-to-equity ratio consistently above 4.0, which poses financial risk. However, the company maintains a stable equity ratio and has shown some ability to generate returns on equity, albeit with declining ROE in recent periods. The high debt levels could limit financial flexibility and increase vulnerability to interest rate changes.

Cash Flow

Cash flow analysis shows inconsistent free cash flow growth and a recent negative operating cash flow, highlighting liquidity challenges. The TTM data indicates a near break-even free cash flow to net income ratio, suggesting limited cash generation relative to net income. Historical data shows fluctuating cash flow metrics, reflecting operational and financial instability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.98B	4.74B	3.76B	1.67B	2.90B	1.45B
Gross Profit	4.61B	4.47B	3.58B	1.03B	2.55B	1.15B
EBITDA	2.45B	3.13B	2.18B	2.06B	1.42B	-565.83M
Net Income	886.63M	931.50M	622.26M	954.52M	772.23M	-1.41B
Balance Sheet
Total Assets	47.17B	46.05B	39.72B	32.48B	39.74B	33.25B
Cash, Cash Equivalents and Short-Term Investments	10.15B	11.17B	9.82B	2.15B	10.73B	15.19B
Total Debt	32.52B	32.79B	26.96B	21.90B	29.78B	25.73B
Total Liabilities	38.26B	38.16B	32.62B	25.47B	30.22B	27.82B
Stockholders Equity	8.50B	7.79B	7.01B	6.94B	6.60B	5.32B
Cash Flow
Free Cash Flow	-2.94B	-2.32B	693.60M	5.75B	2.86B	1.32B
Operating Cash Flow	-2.93B	-2.19B	693.60M	5.75B	2.88B	1.86B
Investing Cash Flow	884.73M	-2.43B	216.72M	132.90M	2.31B	8.65B
Financing Cash Flow	2.29B	4.83B	-842.55M	-5.82B	-4.74B	-10.11B

Rithm Capital Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.11
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RITM, the sentiment is Negative. The current price of 11.11 is below the 20-day moving average (MA) of 11.17, above the 50-day MA of 11.03, and below the 200-day MA of 11.13, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 47.83 is Neutral, neither overbought nor oversold. The STOCH value of 31.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RITM.

Rithm Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AGNC	66 Neutral	$11.07B	15.60	7.94%	13.98%	729.50%	-53.65%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
ARI	64 Neutral	$1.41B	11.42	7.26%	9.89%	0.29%	―
BXMT	63 Neutral	$3.43B	32.84	2.88%	9.19%	-18.22%	―
STWD	62 Neutral	$6.83B	17.56	5.34%	10.42%	-13.19%	-11.26%
ABR	60 Neutral	$1.74B	11.34	6.43%	14.99%	-18.13%	-40.87%
RITM	59 Neutral	$6.16B	7.67	10.78%	9.00%	-1.07%	47.50%

Rithm Capital Corporate Events

Rithm Capital Completes Acquisition of Crestline Management

On December 1, 2025, Rithm Capital Corp. announced the successful completion of its acquisition of Crestline Management, L.P. This acquisition is a strategic move to enhance Rithm’s asset management platform, which now manages approximately $102 billion in investable assets. The integration of Crestline is expected to strengthen Rithm’s position as a global asset management business, offering diverse investment opportunities to institutional and private wealth investors. The acquisition is seen as a significant milestone in Rithm’s growth strategy, with expectations of delivering enhanced performance and opportunities for clients and shareholders.

Rithm Capital Updates Certificate of Designations

Rithm Capital has incorporated information regarding the Certificate of Designations into their current report on Form 8-K, as referenced in Item 5.03. This action reflects a procedural update in their reporting requirements, potentially affecting how stakeholders access and interpret the company’s regulatory filings.

Rithm Capital Announces $750 Million Stock Offering

On September 22, 2025, Rithm Capital entered into a Distribution Agreement with several financial institutions to sell up to $750 million worth of common stock through an at-the-market equity offering program. This strategic move, facilitated by a registration statement and a prospectus supplement filed with the SEC, aims to bolster the company’s financial standing and market presence.

Rithm Capital’s New Underwriting Agreement with Morgan Stanley

On September 18, 2025, Rithm Capital Corp. entered into an underwriting agreement with Morgan Stanley & Co. LLC to sell 7,600,000 shares of its 8.750% Series E Fixed-Rate Cumulative Redeemable Preferred Stock, with an option for the underwriters to purchase an additional 1,140,000 shares. The offering, expected to close on September 25, 2025, aims to raise funds for investments and general corporate purposes, reflecting the company’s strategic financial maneuvers and potentially impacting its market positioning.

Rithm Capital Announces Acquisition of Paramount Group

On September 17, 2025, Rithm Capital announced a definitive agreement to acquire Paramount Group for approximately $1.6 billion. This acquisition will provide Rithm with a substantial Class A office portfolio in key markets, enhancing its commercial real estate footprint and asset management capabilities. The transaction, expected to close in late Q4 2025, will be funded through a mix of cash and liquidity from Rithm’s balance sheet, with potential co-investor opportunities. The merger is anticipated to create new investment opportunities and strengthen Rithm’s position in the commercial real estate market, with the support of Paramount’s high-quality office assets and management expertise.