Angel Oak Mortgage REIT (NYSE:AOMR) Posts Quarterly Earnings Results, Misses Estimates By $0.04 EPS

Angel Oak Mortgage REIT (NYSE:AOMR) released its quarterly earnings data on Tuesday. The company reported $0.28 EPS for the quarter, missing analysts’ consensus estimates of $0.32 by ($0.04), FiscalAI reports. Angel Oak Mortgage REIT had a net margin of 11.85% and a return on equity of 7.74%. The company had revenue of ($10.63) million during the quarter, compared to the consensus estimate of $11.39 million.

Here are the key takeaways from Angel Oak Mortgage REIT’s conference call:

• Higher rates and wider spreads pressured valuations: GAAP net loss was $16.7 million, or $0.72 per share, while GAAP book value fell 11.5% quarter over quarter to $8.97 per share. Management attributed the decline primarily to non-cash mark-to-market losses, split roughly evenly between interest-rate moves and non-QM spread widening.
• Underlying credit performance remained stable: Portfolio-wide 90-plus-day delinquencies were approximately 2.1%, unchanged from the prior quarter, and management said valuation declines did not reflect deterioration in expected loan cash flows. Distributable earnings improved to $6.4 million, or $0.28 per share, from $0.5 million, or $0.02, in the prior-year period.
• Securitization access and liquidity remained solid: The company completed two securitizations during the quarter and another in October, while renewing financing facilities at lower spreads. It ended the quarter with $49 million of cash, a 2.0-times recourse debt-to-equity ratio, and approximately $1 billion of undrawn loan financing capacity.
• Capital deployment remains disciplined amid compressed returns: Angel Oak purchased $233.1 million of loans during the quarter, but current investment returns remain below the company’s historical 15%-20% target because of higher rates. Management expects returns to recover toward that range if the rate environment remains stable and indicated that non-QM remains its primary acquisition focus.
• The quarterly dividend was maintained at $0.32 per share, payable November 30, 2026. Management also said fourth-quarter book value had recovered by approximately two percentage points as market conditions became more favorable.

Angel Oak Mortgage REIT Stock Down 7.8%

Shares of NYSE AOMR traded down $0.56 during mid-day trading on Tuesday, hitting $6.59. The company had a trading volume of 85,814 shares, compared to its average volume of 116,831. The company has a market capitalization of $153.08 million, a PE ratio of 8.79 and a beta of 1.28. The firm has a 50-day simple moving average of $7.66 and a two-hundred day simple moving average of $8.45. The company has a current ratio of 7.16, a quick ratio of 7.16 and a debt-to-equity ratio of 8.76. Angel Oak Mortgage REIT has a one year low of $6.63 and a one year high of $9.48.

Insider Activity at Angel Oak Mortgage REIT

In related news, Director W D. Minami acquired 6,800 shares of the company’s stock in a transaction dated Thursday, September 10th. The shares were bought at an average price of $8.10 per share, for a total transaction of $55,080.00. Following the purchase, the director directly owned 87,118 shares in the company, valued at approximately $705,655.80. This trade represents a 8.47% increase in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, CFO Brandon Filson sold 65,000 shares of the company’s stock in a transaction that occurred on Tuesday, September 22nd. The stock was sold at an average price of $7.93, for a total value of $515,450.00. Following the sale, the chief financial officer owned 107,815 shares in the company, valued at approximately $854,972.95. This represents a 37.61% decrease in their position. The disclosure for this sale is available in the SEC filing. 2.90% of the stock is owned by company insiders.

Analysts Set New Price Targets

Several research analysts recently weighed in on AOMR shares. Wall Street Zen raised shares of Angel Oak Mortgage REIT from a “sell” rating to a “hold” rating in a research note on Saturday, August 8th. BTIG Research dropped their price objective on Angel Oak Mortgage REIT from $10.00 to $9.00 and set a “buy” rating on the stock in a research note on Tuesday, October 6th. JonesTrading reiterated a “buy” rating and set a $10.50 target price on shares of Angel Oak Mortgage REIT in a report on Tuesday, August 4th. Wells Fargo & Company reduced their target price on Angel Oak Mortgage REIT from $11.00 to $10.00 and set an “overweight” rating on the stock in a report on Wednesday, August 5th. Finally, Weiss Ratings cut Angel Oak Mortgage REIT from a “hold (c-)” rating to a “sell (d+)” rating in a research note on Thursday, October 8th. Three equities research analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat.com, Angel Oak Mortgage REIT has an average rating of “Hold” and an average price target of $9.81.

Angel Oak Mortgage REIT Company Profile

Angel Oak Mortgage REIT, Inc is a real estate investment trust focused on investing in residential mortgage assets. The company primarily targets non-qualified mortgage loans, or non-QM loans, which are residential mortgages made to creditworthy borrowers whose financial profiles may not fit traditional agency underwriting standards.

Its investment portfolio may also include residential mortgage-backed securities and other mortgage-related assets. Angel Oak Mortgage REIT seeks to generate income through interest payments and other returns from these investments, with an emphasis on loans secured by residential properties in the United States.

Angel Oak Mortgage REIT is externally managed by Angel Oak Capital Advisors, an investment management firm specializing in mortgage credit and related strategies.