PennyMac Mortgage (PMT) AI Stock Analysis

• Market Cap: $1.09B
• Dividend Yield: 12.72%
• Average Volume (3M): 558.02K
• Price to Earnings (P/E): 13.5
• Beta (1Y): 0.53
• Revenue Growth: -4.42%
• EPS Growth: -43.99%
• Country: US
• Employees: 7
• Sector: Real Estate
• Sector Strength: 69
• Industry: REIT - Mortgage
• EPS (TTM): -0.01
• Shares Outstanding: 87,010,605
• 10 Day Avg. Volume: 613,568
• 30 Day Avg. Volume: 558,018
• PEG Ratio: 0.04
• Price to Book (P/B): 0.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.63
• Enterprise Value/Market Cap: 4.08
• Enterprise Value/Revenue: 1.35
• Enterprise Value/Gross Profit: 12.19
• Enterprise Value/Ebitda: 1.86
• 1Y Price Target: $13.85
• Price Target Upside: 10.10% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 51 Neutral
• Price Target: $12.50 ▼(-0.64%Downside)

PennyMac Mortgage's overall stock score is influenced by financial challenges, including high leverage and negative cash flows, which are the most significant factors. Technical indicators and valuation provide moderate support, while recent corporate events show potential for improved liquidity. The balance of risks and opportunities results in an overall score indicating cautious optimism.

Positive Factors

Dividend Increase

There could also be a growing near-term case for the equity if it manages to raise the dividend to align with accretive returns from completing more private-label securitizations.

Earnings Performance

The stock rallied on good earnings results.

Securitization Activity

The company just issued its third securitization this year of Agency-eligible investor property loans, taking advantage of the relatively high guarantee fees being charged by the GSEs.

Negative Factors

Dividend Yield Comparison

The dividend yield at 12% remains lower than in the other REIT-servicers Annaly and Two Harbors.

Loan Default Risk

Default and severity rates tend to be higher for non-owner occupied loans, but the g-fee being charged by the Agencies is essentially too high relative to the risk outlook.

Origination Volume

Origination volume declined sequentially to $3.5 billion of correspondent loans acquired for PMT.

PennyMac Mortgage Business Overview & Revenue Model

Company Description

PennyMac Mortgage Investment Trust, a specialty finance company, primarily invests in mortgage-related assets in the United States. The company's Credit Sensitive Strategies segment invests in credit risk transfer (CRT) agreements, CRT securities, distressed loans, real estate, and non-agency subordinated bonds. Its Interest Rate Sensitive Strategies segment engages in investing in mortgage servicing rights, excess servicing spreads, and agency and senior non-agency mortgage-backed securities (MBS), as well as related interest rate hedging activities. The company's Correspondent Production segment is involved in purchasing, pooling, and reselling newly originated prime credit residential loans directly or in the form of MBS. PNMAC Capital Management, LLC acts as the manager of PennyMac Mortgage Investment Trust. 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 shareholders. PennyMac Mortgage Investment Trust was founded in 2009 and is headquartered in Westlake Village, California.

How the Company Makes Money

PennyMac Mortgage Investment Trust (PMT) generates revenue through several key streams. Primarily, the company earns money by investing in residential mortgage-backed securities (RMBS) and related mortgage assets, which provide interest income. PMT also gains from credit risk transfer investments, where it assumes a portion of the credit risk on specific mortgage loans in exchange for premium payments. Additionally, the company benefits from mortgage servicing rights (MSRs), which generate fee income from servicing and managing mortgage loans. PMT's business model is further supported by strategic partnerships and its ability to leverage market opportunities to optimize its investment portfolio, thereby enhancing its revenue potential.

PennyMac Mortgage Financial Statement Overview

Summary

PennyMac Mortgage faces financial challenges with declining revenues, high leverage, and negative cash flows. Despite high gross profit margins, profitability is hindered by significant EBIT losses and high debt levels, potentially affecting financial stability.

Income Statement

PennyMac Mortgage faced challenges in maintaining revenue stability, with a significant drop in total revenue to $406 million TTM from $725 million the previous year. The Gross Profit Margin is strong at 90.14%, indicating efficient cost management. However, the negative EBIT margin of -52.61% and the drop in net income to $123 million signal profitability issues. The EBITDA margin remains robust at 201.05%, showing good operational performance despite the earnings loss.

Balance Sheet

The debt-to-equity ratio of 1.82 suggests a high level of leverage, which could pose risks in economic downturns. The equity ratio is relatively low at 12.79%, indicating limited reliance on equity financing. Return on Equity (ROE) is positive at 6.47%, reflecting some profitability. The company's high debt levels could affect future growth and financial stability.

Cash Flow

The cash flow analysis shows challenges, with a negative free cash flow of -$2.97 billion TTM. Operating cash flow is negative, indicating potential cash management issues. Both operating and free cash flow ratios to net income are concerning, suggesting the company is struggling to convert earnings into cash effectively. This could impact liquidity and operational flexibility.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
406.06M	14.72M	725.87M	103.11M	82.84M	108.63M
	Gross Profit
366.05M	1.94M	603.76M	25.55M	-107.23M	-119.97M
	EBIT
-213.61M	-3.67M	558.23M	47.89M	44.66M	79.73M
	EBITDA
816.13M	1.03B	1.28B	54.64M	44.66M	79.73M
	Net Income Common Stockholders
123.06M	160.98M	199.65M	-73.29M	56.85M	52.37M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
247.94M	337.69M	409.42M	364.14M	1.93B	2.98B
	Total Assets
14.88B	14.41B	13.11B	13.92B	13.77B	11.52B
	Total Debt
6.43B	5.59B	4.85B	4.77B	4.49B	2.27B
	Net Debt
5.09B	4.14B	10.19B	3.33B	2.73B	-583.60M
	Total Liabilities
12.97B	12.47B	11.16B	11.96B	11.41B	9.22B
	Stockholders Equity
1.90B	1.94B	1.96B	1.96B	2.37B	2.30B
Cash Flow		Free Cash Flow
-2.97B	-2.73B	1.33B	1.78B	-2.79B	671.66M
	Operating Cash Flow
-2.98B	-2.73B	1.34B	1.78B	-2.82B	671.66M
	Investing Cash Flow
629.83M	1.36B	-21.73M	-1.87B	1.09B	-15.37M
	Financing Cash Flow
2.00B	1.43B	-1.15B	135.89M	1.73B	-702.64M

PennyMac Mortgage Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 12.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PMT, the sentiment is Negative. The current price of 12.58 is above the 20-day moving average (MA) of 12.51, below the 50-day MA of 12.65, and below the 200-day MA of 12.88, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 49.37 is Neutral, neither overbought nor oversold. The STOCH value of 83.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PMT.

PennyMac Mortgage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARI	66 Neutral	$1.36B	―	0.41%	10.18%	-14.98%	95.53%
EFC	65 Neutral	$1.22B	9.33	9.59%	12.12%	11.91%	52.26%
Sector *	61 Neutral	$2.83B	10.72	0.40%	6.10%	5.80%	-21.26%
DX	60 Neutral	$1.32B	15.88	6.01%	16.59%	73.74%	-34.10%
TWO	53 Neutral	$1.12B	5.06	0.63%	16.67%	-18.22%	-114.40%
PMT	51 Neutral	$1.09B	13.51	6.36%	12.72%	-4.42%	-43.99%
ARR	48 Neutral	$1.37B	8.01	-0.11%	17.19%	142.18%	50.74%

PennyMac Mortgage Corporate Events

PennyMac Mortgage Closes $105M Senior Notes Offering

On June 10, 2025, PennyMac Mortgage Investment Trust successfully closed a public offering of $105 million in 9.00% Senior Notes due 2030, including a partial exercise of an over-allotment option. The Notes, guaranteed by PennyMac Corp., are set to mature in 2030 and have been approved for listing on the New York Stock Exchange under the symbol ‘PMTW’. The offering, underwritten by major financial firms, is expected to generate net proceeds of approximately $101 million, which could increase if the remaining over-allotment option is exercised.

The most recent analyst rating on (PMT) stock is a Buy with a $15.50 price target. To see the full list of analyst forecasts on PennyMac Mortgage stock, see the PMT Stock Forecast page.