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Two Harbors
(NYSE:TWO)
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Rating:53Neutral
Price Target:
$12.50
â–²(3.31% Upside)
Action:Reiterated
Date:07/30/26
The score is held back primarily by weak and inconsistent financial performance, especially negative TTM operating/free cash flow and historically high leverage risk. Offsetting this, the cash M&A path (earnings call and corporate updates) improves certainty, the chart trend is moderately supportive with price above longer-term averages, and the dividend yield is high despite a negative P/E.
Positive Factors
MSR economics and market demand
Durable servicing-rights economics and strong market demand underpin a recurring, fee-like income stream. Low delinquencies and rising MSR multiples support stable servicing cash flows, diversifying earnings away from mark-to-market RMBS volatility and improving medium-term revenue visibility.
Negative Factors
Weak and inconsistent cash generation
Persistent negative TTM operating and free cash flow constrains the firm's ability to self-fund dividends, absorb mark-to-market shocks, or rebuild capital without external financing. The historical choppiness reduces predictability of distributable cash and increases reliance on volatile repo and capital markets.
Read all positive and negative factors
Positive Factors
Negative Factors
MSR economics and market demand
Durable servicing-rights economics and strong market demand underpin a recurring, fee-like income stream. Low delinquencies and rising MSR multiples support stable servicing cash flows, diversifying earnings away from mark-to-market RMBS volatility and improving medium-term revenue visibility.
Read all positive factors
Two Harbors (TWO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.27B
Dividend Yield11.25%
Average Volume (3M)1.89M
Price to Earnings (P/E)―
Beta (1Y)0.58
Revenue Growth18.52%
EPS Growth78.83%
CountryUS
Employees486
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)-0.73
Shares Outstanding105,134,760
10 Day Avg. Volume1,858,184
30 Day Avg. Volume1,888,906
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.61
Price to Sales (P/S)1.81
P/FCF Ratio-72.58
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$12.00Price Target Upside-0.83% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering3
EPS Forecast (FY)1.18
Revenue Forecast (FY)$18.80M
Two Harbors Business Overview & Revenue Model
Company Description
Two Harbors Investment Corp. (TWO) operates as a Real Estate Investment Trust (REIT) with a strategic focus on the U.S. mortgage market. The firm is actively involved in acquiring, funding, and overseeing a diverse portfolio of financial instrumen...
How the Company Makes Money
Two Harbors makes money primarily from the net interest spread generated by its investment portfolio—earning interest income on its mortgage-related assets (especially agency MBS) and paying interest expense on the borrowings used to finance those...
Two Harbors Earnings Call Summary
Earnings Call Date:Apr 28, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 2026
Earnings Call Sentiment Positive
The call balanced meaningful near-term challenges—quarterly mark-to-market losses, a comprehensive loss of $24.7M and a decline in book value—with material strategic and operational positives: a definitive cash merger (increased to $11.30/share) providing shareholder certainty, strong MSR performance and market demand, solid liquidity and improved risk metrics. While RMBS market volatility and spread widening pressured the securities sleeve this quarter, the company highlighted durable MSR economics, an improving origination platform, and an attractive prospective return profile. On net, the strategic certainties and operational strengths (especially MSR and the merger) outweigh the quarterly performance headwinds.Positive Updates
Definitive Cash Merger with CrossCountry (Increased Consideration)
Board executed a merger agreement with CrossCountry Mortgage; amended consideration increased from $10.80 to $11.30 per share in cash. Transaction expected to close in H2 2026, not subject to a financing condition; special shareholder meeting set for May 19 and Board unanimously recommends the transaction.
Negative Updates
Quarterly Book Value Decline and Negative Economic Return
Book value fell to $10.57 per share at March 31 from $11.13 at December 31 (≈ -5.1% change in book value). Including a $0.34 common stock dividend, the company reported a negative 2.0% quarterly economic return.
Read all updates
Q1-2026 Updates
Positive
Negative
Definitive Cash Merger with CrossCountry (Increased Consideration)
Board executed a merger agreement with CrossCountry Mortgage; amended consideration increased from $10.80 to $11.30 per share in cash. Transaction expected to close in H2 2026, not subject to a financing condition; special shareholder meeting set for May 19 and Board unanimously recommends the transaction.
Read all positive updates
Company Guidance
Management reiterated that the amended CrossCountry merger (cash consideration increased to $11.30 from $10.80) is expected to close in the second half of 2026, is not subject to a financing condition, and will be voted on at a special meeting on May 19 (regular quarterly dividends to continue, no stub dividend). On results/guidance metrics they reported Q1 book value $10.57 (from $11.13 at 12/31), a negative 2.0% quarterly economic return, a comprehensive loss of $24.7M ($0.24/sh), cash of over $500M, repayment of $261.9M convertible notes, RMBS repo spreads ~SOFR+15–18bp with weighted average repo maturity 71 days, $1.5B MSR borrowings across five lenders with $977M unused MSR financing capacity, $69M drawn (and $81M available) on servicing advances, portfolio $11.9B ($8.9B settled, $3.0B TBAs), economic debt/equity 6.4x, sensitivity to a 25bp spread tightening ~3.2%, MSR additions $152M UPB, MSR multiple 5.9x, MSR CPR 5.6% (aggregate pool speeds 9.8% vs 8.6% prior quarter), and static return estimates of 11–14% for servicing, 11–15% for securities, a pre-leverage portfolio return of 8–11.4%, and an estimated common‑equity static return of 7.3–12.9% (prospective quarterly per‑share static return $0.19–$0.34).Two Harbors Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
41
Neutral
Cash Flow
30
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 858.34M | 605.61M | 845.84M | 640.49M | 12.61M | -142.91M |
| Gross Profit | 669.55M | 592.88M | 884.29M | 566.36M | -81.51M | -229.16M |
| EBITDA | 318.24M | 45.52M | 952.56M | 559.83M | 582.85M | 280.59M |
| Net Income | -21.68M | -454.30M | 298.17M | -106.37M | 220.24M | 187.23M |
Balance Sheet | ||||||
| Total Assets | 8.83B | 10.86B | 12.20B | 13.14B | 13.47B | 12.11B |
| Cash, Cash Equivalents and Short-Term Investments | 5.73B | 842.46M | 7.88B | 9.06B | 8.46B | 8.32B |
| Total Debt | 6.62B | 8.56B | 9.09B | 9.91B | 10.40B | 8.90B |
| Total Liabilities | 7.09B | 9.07B | 10.08B | 10.94B | 11.28B | 9.37B |
| Stockholders Equity | 1.74B | 1.79B | 2.12B | 2.20B | 2.18B | 2.74B |
Cash Flow | ||||||
| Free Cash Flow | -133.18M | -15.07M | 86.88M | 30.87M | -6.41M | -318.64M |
| Operating Cash Flow | -122.11M | 88.92M | 201.00M | 343.51M | 623.40M | 423.51M |
| Investing Cash Flow | 3.70B | 911.61M | 895.28M | -195.78M | -2.75B | 6.31B |
| Financing Cash Flow | -3.76B | -756.22M | -1.07B | -479.40M | 1.17B | -7.30B |
Two Harbors Technical Analysis
Positive
12.10
Price Trends
12.06
Positive
11.43
Positive
10.67
Positive
Market Momentum
0.03
Positive
57.82
Neutral
69.05
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TWO, the sentiment is Positive. The current price of 12.1 is above the 20-day moving average (MA) of 12.09, above the 50-day MA of 12.06, and above the 200-day MA of 10.67, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 57.82 is Neutral, neither overbought nor oversold. The STOCH value of 69.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TWO.
Two Harbors Risk Analysis
Two Harbors disclosed 64 risk factors in its most recent earnings report. Two Harbors 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
Two Harbors 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% | |
57 Neutral | $811.85M | 6.59 | 7.62% | 16.43% | 16.63% | 96.52% | |
56 Neutral | $934.69M | 8.35 | 7.43% | 15.75% | 2.05% | -11.87% | |
56 Neutral | $1.32B | 4.39 | 25.58% | 21.10% | 89.39% | 661.99% | |
55 Neutral | $642.77M | 16.80 | 4.52% | 14.21% | 11.14% | -54.56% | |
53 Neutral | $1.27B | -16.67 | -1.23% | 11.24% | 18.52% | 78.83% | |
49 Neutral | $1.06B | -23.55 | 0.75% | 13.12% | 10.27% | -151.66% |
* Real Estate Sector Average
TWO
Two Harbors
12.09
3.46
40.14%
CIM
Chimera Investment
12.48
0.64
5.41%
MFA
MFA Financial
9.11
1.27
16.14%
PMT
PennyMac Mortgage
9.43
-0.86
-8.32%
ORC
Orchid Island Capital
6.49
0.68
11.72%
FBRT
Franklin BSP Realty Trust
7.59
-1.75
-18.72%
Two Harbors Corporate Events
Business Operations and StrategyM&A TransactionsShareholder Meetings
Two Harbors Shareholders Approve Merger with CrossCountry Mortgage
Positive
Jul 6, 2026
On July 2, 2026, Two Harbors held a virtual special meeting at which common stockholders approved the merger of the REIT with CrossCountry Intermediate Holdco and its Merger Sub, paving the way for Two Harbors to become a wholly owned subsidiary o...
Business Operations and StrategyM&A TransactionsShareholder Meetings
Two Harbors Adjourns Vote on CrossCountry Acquisition
Positive
Jun 23, 2026
On June 23, 2026, Two Harbors Investment Corp. said it had adjourned its virtual special meeting of stockholders, originally set for May 19, 2026, to July 2, 2026, to secure additional proxy support for its planned acquisition by CrossCountry Inte...
Business Operations and StrategyM&A TransactionsShareholder Meetings
Two Harbors Reschedules Special Meeting on CrossCountry Deal
Neutral
Jun 8, 2026
On June 8, 2026, Two Harbors Investment Corp. postponed its special meeting of stockholders related to a proposed transaction with CrossCountry Intermediate Holdco, LLC, an affiliate of CrossCountry Mortgage, LLC. The rescheduled virtual meeting w...
M&A TransactionsShareholder Meetings
Two Harbors Adjourns Vote on CrossCountry Acquisition Deal
Positive
May 28, 2026
On May 28, 2026, Two Harbors Investment Corp. adjourned its virtual special meeting of stockholders to June 11, 2026, to gain more time to engage investors and gather additional proxies for its all-cash acquisition by CrossCountry Intermediate Hol...
Legal ProceedingsM&A TransactionsShareholder Meetings
Two Harbors Adjourns Vote on CrossCountry Acquisition
Positive
May 19, 2026
On May 19, 2026, Two Harbors adjourned its virtual special meeting of stockholders to May 28, 2026, to allow more time to solicit proxies in favor of its all-cash acquisition by CrossCountry Intermediate Holdco, an affiliate of CrossCountry Mortga...
Legal ProceedingsM&A TransactionsShareholder Meetings
Two Harbors faces lawsuit challenging CrossCountry merger process
Negative
May 15, 2026
On May 13, 2026, Two Harbors disclosed that stockholder George Assad filed a federal lawsuit in Maryland alleging the company and its directors violated U.S. securities laws by issuing a materially incomplete and misleading proxy statement related...
DividendsM&A Transactions
Two Harbors Sets Stub Dividend Ahead of Merger Close
Positive
May 14, 2026
On May 13, 2026, CrossCountry Intermediate Holdco, LLC and its merger subsidiary waived a merger agreement restriction to allow Two Harbors to declare and pay a pro-rated “stub period” dividend on its common stock for the quarter in wh...
Delistings and Listing ChangesDividendsM&A Transactions
Two Harbors Increases Cash Consideration in CrossCountry Merger
Positive
May 8, 2026
Two Harbors Investment Corp. and CrossCountry Intermediate Holdco, an affiliate of CrossCountry Mortgage, amended their merger agreement on May 7, 2026, raising the all-cash consideration for Two Harbors shareholders to $12.00 per share from $11.3...
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.