tiprankstipranks
Trending News
More News >
Rithm Capital (RITM)
NYSE:RITM
Advertisement

Rithm Capital (RITM) AI Stock Analysis

Compare
6,794 Followers

Top Page

RITM

Rithm Capital

(NYSE:RITM)

Select Model
Select Model
Select Model
Neutral 57 (OpenAI - 4o)
Rating:57Neutral
Price Target:
$11.50
▲(4.26% Upside)
Rithm Capital's overall stock score reflects a mix of strengths and challenges. The strong earnings performance and strategic acquisitions highlighted in the earnings call are significant positives. However, financial performance issues, including high leverage and inconsistent cash flows, weigh heavily on the score. The stock's undervaluation and high dividend yield provide some upside potential, but technical indicators suggest caution.
Positive Factors
Strong Earnings Performance
Strong earnings performance indicates robust operational efficiency and profitability, supporting long-term growth and shareholder value.
Significant Acquisitions
Strategic acquisitions expand asset management capabilities and market reach, enhancing competitive positioning and growth potential.
Increased Cash and Liquidity
High liquidity provides financial flexibility to invest in growth opportunities and manage debt, supporting long-term stability.
Negative Factors
High Leverage
High leverage increases financial risk and limits flexibility, potentially impacting the company's ability to withstand economic downturns.
Inconsistent Cash Flow
Inconsistent cash flow generation can strain liquidity and hinder the company's ability to fund operations and growth initiatives.
Declining Revenue
Declining revenue and negative margins indicate operational challenges and market pressures, affecting long-term profitability.

Rithm Capital (RITM) vs. SPDR S&P 500 ETF (SPY)

Rithm Capital Business Overview & Revenue Model

Company DescriptionRithm Capital (RITM) is a diversified real estate investment trust (REIT) that focuses on acquiring, financing, and managing a portfolio of mortgage loans, mortgage-related assets, and other real estate investments. The company operates primarily in the residential mortgage sector, leveraging its expertise to create value through strategic investments and asset management. Rithm Capital aims to generate attractive risk-adjusted returns for its investors by capitalizing on market opportunities and optimizing the performance of its asset portfolio.
How the Company Makes MoneyRithm 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 Earnings Call Summary

Earnings Call Date:Oct 30, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Feb 05, 2026
Earnings Call Sentiment Neutral
The earnings call detailed strong earnings performance and significant acquisitions, which are expected to drive further growth. However, concerns about stock price underperformance and challenges with certain segments were noted, indicating a need for strategic focus on asset management and growth to achieve proper valuation.
Q3-2025 Updates
Positive Updates
Strong Earnings Performance
Generated approximately $300 million in earnings with an 18% ROE. Earnings available for distribution were $0.54 per diluted share, marking the 24th consecutive quarter where EAD exceeded dividends paid.
Significant Acquisitions
Announced the acquisition of Crestline with $18 billion to $20 billion in AUM and Paramount, a Class A office REIT, with properties in New York and San Francisco.
New Product Offerings
Expanded product offerings including a forward flow to acquire up to $1 billion in home improvement loans and a securitization for a little under $500 million on non-QM loans.
Growth in Mortgage Segment
Direct origination production up 32% year-over-year. Recapture rates and non-agency originations showed significant gains.
Increased Cash and Liquidity
Ended the quarter with $2.2 billion in cash and liquidity.
Negative Updates
Stock Price Underperformance
Share price underperformance compared to peers was noted, with concerns about market perceptions and the need to drive more FRE through the company's assets.
Challenges with RPT
RPT is trading poorly, and there is uncertainty about its future growth. If growth is not achieved, a tender for shares is considered.
Interest Income Decline
Interest income from the investment portfolio fell from $82 million to $52 million quarter-over-quarter due to lower agency balances and retrospective adjustments.
Margin Pressure in Mortgage Segment
Despite increased production, weighted average margins dropped to 114 basis points, influenced by channel mix and a rise in government streamline refinances.
Company Guidance
During the Rithm Capital Third Quarter 2025 Earnings Call, the company reported strong performance across its business lines, generating approximately $300 million in earnings, which translated to an 18% return on equity (ROE). The quarter concluded with $2.2 billion in cash and liquidity. Rithm Capital announced two acquisitions: Crestline, a credit manager with $18 billion to $20 billion in assets under management (AUM), and Paramount, a real estate office REIT with a $7 billion portfolio. The acquisitions are expected to be funded through a combination of balance sheet resources and third-party limited partners. The company's book value at the end of the quarter was $12.83, with a dividend of $0.25 per share. The call highlighted the company's focus on generating steady growth, expanding product offerings to limited partners, and exploring strategic opportunities to enhance shareholder value.

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
30
Negative
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
45
Neutral
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
40
Negative
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.98B4.74B3.76B1.67B2.90B1.45B
Gross Profit4.61B4.47B3.58B1.03B2.55B1.15B
EBITDA2.45B3.13B2.18B2.06B1.42B-565.83M
Net Income886.63M931.50M622.26M954.52M772.23M-1.41B
Balance Sheet
Total Assets47.17B46.05B39.72B32.48B39.74B33.25B
Cash, Cash Equivalents and Short-Term Investments10.15B11.17B9.82B2.15B10.73B15.19B
Total Debt32.52B32.79B26.96B21.90B29.78B25.73B
Total Liabilities38.26B38.16B32.62B25.47B30.22B27.82B
Stockholders Equity8.50B7.79B7.01B6.94B6.60B5.32B
Cash Flow
Free Cash Flow-2.94B-2.32B693.60M5.75B2.86B1.32B
Operating Cash Flow-2.93B-2.19B693.60M5.75B2.88B1.86B
Investing Cash Flow884.73M-2.43B216.72M132.90M2.31B8.65B
Financing Cash Flow2.29B4.83B-842.55M-5.82B-4.74B-10.11B

Rithm Capital Technical Analysis

Technical Analysis Sentiment
Positive
Last Price11.03
Price Trends
50DMA
11.11
Negative
100DMA
11.52
Negative
200DMA
11.13
Negative
Market Momentum
MACD
-0.04
Positive
RSI
50.56
Neutral
STOCH
28.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RITM, the sentiment is Positive. The current price of 11.03 is above the 20-day moving average (MA) of 11.00, below the 50-day MA of 11.11, and below the 200-day MA of 11.13, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 50.56 is Neutral, neither overbought nor oversold. The STOCH value of 28.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RITM.

Rithm Capital Risk Analysis

Rithm Capital disclosed 113 risk factors in its most recent earnings report. Rithm 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

Rithm Capital Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
66
Neutral
$11.03B15.547.94%14.20%729.50%-53.65%
65
Neutral
$2.17B12.193.79%4.94%3.15%1.96%
64
Neutral
$1.38B11.227.26%10.06%0.29%
63
Neutral
$3.16B30.272.88%9.97%-18.22%
62
Neutral
$6.61B17.025.34%10.75%-13.19%-11.26%
60
Neutral
$1.67B10.896.43%15.61%-18.13%-40.87%
57
Neutral
$6.11B7.6110.78%9.07%-1.07%47.50%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RITM
Rithm Capital
11.03
0.84
8.24%
AGNC
AGNC Investment
10.28
1.89
22.53%
ARI
Apollo Real Estate
9.94
1.63
19.61%
ABR
Arbor Realty
8.52
-4.53
-34.71%
BXMT
Blackstone Mortgage
18.85
1.71
9.98%
STWD
Starwood Property
17.86
-0.49
-2.67%

Rithm Capital Corporate Events

Rithm Capital Corp. Faces Financial Uncertainty Amid Paramount and Crestline Acquisitions
Nov 2, 2025

Rithm Capital Corp. faces a significant financial risk due to the substantial transaction fees and costs associated with the Paramount and Crestline Acquisitions. The company anticipates incurring a considerable amount of non-recurring expenses, with additional unanticipated costs potentially arising during the integration process. Estimating these expenses proves challenging, and there is uncertainty whether cost savings from eliminating duplicative expenses will offset these integration costs in the near term. The timing and total amount of these charges remain uncertain, posing a financial challenge for Rithm Capital Corp.

Rithm Capital’s Acquisition Challenges: Navigating Risks and Synergies in Commercial Real Estate
Nov 2, 2025

Rithm Capital Corp. faces significant risks in its efforts to integrate the Paramount and Crestline acquisitions, which could hinder the realization of anticipated synergies and cost savings. The integration process may encounter challenges such as management distraction, cultural differences, and retention of key personnel, potentially leading to delays or increased costs. Additionally, the acquisitions expose Rithm to heightened risks in the commercial real estate and asset management sectors, which could adversely affect its financial performance. These factors, largely beyond Rithm’s control, could impact its financial position, operations, and stock value.

Rithm Capital’s Earnings Call: Strong Growth Amid Challenges
Nov 1, 2025

Rithm Capital Corp. recently held its earnings call, revealing a strong performance with significant growth prospects. The company reported robust earnings and strategic acquisitions, although concerns about stock price underperformance and challenges in certain segments were also highlighted. The sentiment was generally positive, with a focus on asset management and growth to achieve proper valuation.

Rithm Capital Reports Q3 2025 Financial Results
Oct 31, 2025

Rithm Capital Corp. is a global asset manager specializing in credit and real estate assets, with a focus on innovation and growth across various market segments. The company operates through subsidiaries like Newrez, Genesis Capital, and Sculptor Capital Management, offering a unique owner-operator model for managing debt and equity investments.

Regulatory Filings and Compliance
Rithm Capital Updates Certificate of Designations
Neutral
Sep 25, 2025

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.

The most recent analyst rating on (RITM) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on Rithm Capital stock, see the RITM Stock Forecast page.

Private Placements and FinancingRegulatory Filings and Compliance
Rithm Capital Announces $750 Million Stock Offering
Neutral
Sep 22, 2025

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.

The most recent analyst rating on (RITM) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on Rithm Capital stock, see the RITM Stock Forecast page.

Business Operations and StrategyPrivate Placements and Financing
Rithm Capital’s New Underwriting Agreement with Morgan Stanley
Neutral
Sep 19, 2025

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.

The most recent analyst rating on (RITM) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on Rithm Capital stock, see the RITM Stock Forecast page.

M&A Transactions
Rithm Capital Announces Acquisition of Paramount Group
Positive
Sep 17, 2025

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.

The most recent analyst rating on (RITM) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on Rithm Capital stock, see the RITM Stock Forecast page.

Business Operations and StrategyM&A Transactions
Rithm Capital Announces Acquisition of Crestline Management
Positive
Sep 4, 2025

On September 4, 2025, Rithm Capital Corp. announced a definitive agreement to acquire Crestline Management L.P., an alternative investment manager with $17 billion in assets under management. This strategic acquisition is set to significantly enhance Rithm’s asset management platform by adding insurance and reinsurance capabilities, expanding its direct lending and fund liquidity solutions, and increasing its total investable assets to $98 billion. The transaction, expected to close in the fourth quarter of 2025, will maintain Crestline’s existing operations and investment strategies, while creating new opportunities for growth and value creation for investors and shareholders.

The most recent analyst rating on (RITM) stock is a Buy with a $16.00 price target. To see the full list of analyst forecasts on Rithm Capital stock, see the RITM Stock Forecast page.

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.Date of analysis: Nov 04, 2025