Invesco Mortgage (IVR) AI Stock Analysis

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Invesco Mortgage

(NYSE:IVR)

50Neutral

Invesco Mortgage's overall score reflects moderate financial health amid revenue volatility and profitability challenges. The technical analysis suggests bearish momentum, but the valuation seems attractive due to its high dividend yield. The earnings call provided mixed signals, with some positive developments but ongoing risks, resulting in a balanced outlook.

Invesco Mortgage (IVR) vs. S&P 500 (SPY)

Market Cap

$499.84M

Dividend Yield20.08%

Average Volume (3M)2.19M

Price to Earnings (P/E)18.2

Beta (1Y)1.15

Revenue Growth137.36%

EPS GrowthN/A

CountryUS

EmployeesN/A

SectorReal Estate

Sector Strength70

IndustryREIT - Mortgage

Share Statistics

EPS (TTM)0.64

Shares Outstanding65,942,500

10 Day Avg. Volume1,224,294

30 Day Avg. Volume2,189,940

Financial Highlights & Ratios

PEG Ratio-0.15

Price to Book (P/B)0.63

Price to Sales (P/S)0.00

P/FCF Ratio2.71

Enterprise Value/Market Cap0.85

Enterprise Value/Revenue-2.19

Enterprise Value/Gross Profit5.53

Enterprise Value/Ebitda0.50

Forecast

1Y Price Target

$8.00

Price Target Upside4.30% Upside

Rating ConsensusModerate Sell

Number of Analyst Covering2

Invesco Mortgage Business Overview & Revenue Model

Company DescriptionInvesco Mortgage Capital Inc. (IVR) is a real estate investment trust (REIT) that primarily focuses on investing in, financing, and managing residential and commercial mortgage-backed securities and mortgage loans. The company's portfolio is largely comprised of Agency RMBS, which are residential mortgage-backed securities guaranteed by U.S. government agencies, along with non-Agency RMBS and commercial mortgage-backed securities (CMBS). Invesco Mortgage Capital aims to generate income through its investments in these mortgage-related assets by leveraging its expertise in the mortgage finance sector.

How the Company Makes MoneyInvesco Mortgage Capital makes money primarily through the interest income generated from its portfolio of mortgage-backed securities and mortgage loans. The company's revenue model involves acquiring high-quality mortgage-backed securities, both residential and commercial, and earning the spread between the interest income on these securities and the cost of borrowing to finance them. By utilizing leverage, Invesco Mortgage Capital seeks to enhance its returns on equity. The company also engages in active portfolio management to optimize its asset mix and manage interest rate risks. In addition to interest income, the company may realize gains or losses from the sale of securities within its portfolio. Key factors contributing to its earnings include the performance of the housing and commercial real estate markets, interest rate trends, and government policies affecting mortgage financing.

Invesco Mortgage Financial Statement Overview

Summary

Invesco Mortgage exhibits moderate financial health with strong cash flow management and a manageable balance sheet, but faces significant revenue and profit volatility. The income statement reflects these challenges, which could pose ongoing risks.

Income Statement

Negative

The income statement shows significant fluctuations in total revenue and profitability over recent years. Notably, revenue recovered in 2024 compared to previous years, but the company still reported a net income of zero, indicating challenges in achieving profitability. The gross profit margin is 100% in 2024, which is unusual and suggests potential accounting adjustments or unique revenue recognition practices. The overall lack of consistent profitability and revenue volatility poses a risk to financial stability.

Balance Sheet

Neutral

Invesco Mortgage's balance sheet shows a relatively low debt-to-equity ratio in 2024 due to zero reported total debt, which is a positive indicator. However, the equity ratio is 12.85%, pointing to modest equity backing for the assets. The company's financial health has improved from earlier years, but the overall balance sheet strength is moderate, given the historical volatility in liabilities and equity.

Cash Flow

Neutral

The cash flow analysis reveals a stable operating cash flow, which is a positive sign of operational efficiency. Free cash flow has shown a decline in 2024 compared to 2023, but still remains positive, indicating some level of financial resilience. The company's ability to generate operating cash flow despite net income challenges suggests effective cash management, although growth in free cash flow remains a concern.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
286.55M	4.19M	194.51M	-63.41M	-1.65B
	Gross Profit
79.55M	4.19M	177.61M	-126.81M	-3.30B
	EBIT
309.79M	0.00	-351.36M	-90.00M	-1.67B
	EBITDA
310.38M	0.00	0.00	-101.54M	-1.48B
	Net Income Common Stockholders
59.88M	-15.86M	-454.48M	-90.00M	-1.67B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
73.40M	76.97M	175.53M	357.13M	148.01M
	Total Assets
5.69B	5.28B	5.10B	8.44B	8.63B
	Total Debt
0.00	4.46B	4.23B	6.99B	7.23B
	Net Debt
-73.40M	4.26B	4.06B	6.63B	7.08B
	Total Liabilities
4.96B	4.50B	4.29B	3.06M	2.27M
	Stockholders Equity
730.73M	782.66M	804.08M	1.40B	1.37B
Cash Flow		Free Cash Flow
183.16M	237.79M	196.08M	152.29M	170.46M
	Operating Cash Flow
183.16M	237.79M	196.08M	152.29M	170.46M
	Investing Cash Flow
-497.43M	-536.80M	2.42B	120.75M	11.55B
	Financing Cash Flow
326.51M	218.87M	-2.92B	-88.57M	-11.62B

Invesco Mortgage Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7.67

Price Trends

50DMA

7.47

Positive

100DMA

7.69

Negative

200DMA

7.67

Negative

Market Momentum

MACD

0.08

Negative

RSI

58.62

Neutral

STOCH

72.99

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IVR, the sentiment is Positive. The current price of 7.67 is above the 20-day moving average (MA) of 7.22, above the 50-day MA of 7.47, and above the 200-day MA of 7.67, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 58.62 is Neutral, neither overbought nor oversold. The STOCH value of 72.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IVR.

Invesco Mortgage Risk Analysis

Invesco Mortgage disclosed 86 risk factors in its most recent earnings report. Invesco 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

Invesco Mortgage Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TRTX	67 Neutral	$623.69M	11.21	6.22%	12.29%	-13.64%	―
ORC	61 Neutral	$765.91M	17.83	5.23%	20.14%	61.59%	―
Sector *	60 Neutral	$2.77B	10.47	0.42%	8531.49%	6.23%	-16.09%
KREF	54 Neutral	$641.36M	58.57	2.42%	10.60%	-16.46%	―
CMTG	52 Neutral	$341.44M	―	-11.91%	34.69%	-45.51%	-3658.39%
IVR	50 Neutral	$499.84M	18.21	6.55%	20.08%	137.36%	―
NYMT	50 Neutral	$631.18M	―	2.63%	11.13%	33.94%	96.99%

* Real Estate Sector Average

Performance Comparison

IVR

Invesco Mortgage

7.72

-0.09

-1.15%

NYMT

New York Mortgage

7.12

1.62

29.45%

ORC

Orchid Island Capital

7.17

-0.10

-1.38%

KREF

Kkr Real Estate Finance

9.52

0.54

6.01%

TRTX

Tpg Re Finance

7.98

0.06

0.76%

CMTG

Claros Mortgage Trust

2.56

-5.59

-68.59%

Invesco Mortgage Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 4.35%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted a positive economic return and stable funding conditions, but it was overshadowed by challenges such as a decline in book value, increased market volatility, and reduced leverage due to policy uncertainties. While the long-term outlook remains favorable, the near-term challenges and decline in book value indicate a cautious sentiment.

Q1-2025 Updates

Positive Updates

Positive Economic Return

The portfolio produced a positive economic return for the quarter of 2.6%, consisting of a $0.34 dividend and a modest $0.11 decline in book value to $8.81.

Stable Funding Market

The funding market for assets has been stable since year-end, with haircuts unchanged and one-month repo spreads remaining between SOFR plus 15 to 18 basis points.

Attractive Levered Gross ROEs

Levered gross ROEs in the low 20% represent a very attractive entry point for investors with longer investment horizons.

Improvement in Capital Structure

Further improvement in the capital structure remains a focus, aimed at maximizing shareholder returns.

Negative Updates

Decline in Book Value

Book value per common share declined in April, with an estimate for April 30th between $7.74 and $8.06.

Increased Market Volatility

The market experienced substantial volatility in early April due to trade policy announcements, causing agency mortgages to notably underperform treasuries.

Reduced Leverage Due to Uncertainty

Leverage was reduced from 7.1 times debt to equity to the mid-6s due to increased uncertainty regarding monetary, fiscal, and trade policies.

Potential Delays in Bank Demand

Increased uncertainty could delay bank demand for agency RMBS into the second half of the year amidst higher supply due to housing season.

Company Guidance

During the Invesco Mortgage Capital earnings call for the first quarter of 2025, the company provided guidance reflecting challenging market conditions. The quarter was marked by a tightening of financial conditions, influenced by anticipated U.S. fiscal and trade policies, which led to increased expectations for future inflation and a 75 basis point drop in the Fed funds target rate through year-end. Despite this environment, the company achieved a positive economic return of 2.6%, supported by a $0.34 dividend but offset by an $0.11 decline in book value to $8.81. Looking forward, the book value per share is estimated to be between $7.74 and $8.06 at the end of April. Invesco Mortgage Capital remains cautious about agency mortgages due to elevated interest rate volatility and ongoing policy uncertainty, although they maintain a favorable long-term outlook, anticipating improved investor demand for higher coupon investments.

Invesco Mortgage Corporate Events

Delistings and Listing ChangesBusiness Operations and Strategy

Invesco Mortgage: Termination and Stock Reclassification Events

Neutral

Dec 27, 2024

Invesco Mortgage Capital Inc. announced the termination of its Equity Distribution Agreement, which allowed the company to offer and sell preferred stocks through an agent. The company did not sell any shares under this agreement and faces no penalties for the termination. Additionally, the company redeemed all outstanding shares of its Series B Preferred Stock, reclassifying the authorized but unissued shares to Preferred Stock without designation and completing the redemption on December 27, 2024.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.