Granite Point Mortgage (GPMT) AI Stock Analysis

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Granite Point Mortgage

(NYSE:GPMT)

47Neutral

Granite Point Mortgage faces significant challenges, with declining revenues and substantial net losses negatively impacting the stock's financial performance. Despite improvements in debt management and strategic cash flow actions, the company's financial trajectory remains uncertain. Technical indicators are bearish, and while the dividend yield is high, its sustainability is questionable. Earnings call insights suggest some strategic efforts to resolve loan issues and improve market sentiment. The appointment of new board members is a positive step towards enhancing governance and strategic direction.

Positive Factors

Loan Portfolio

Repayments came in at a healthy $240.1M and the loan portfolio now sits at $2.3B.

Stock Repurchase

GPMT repurchased 1.2M shares of its common stock, increasing book value by $0.13 per share.

Negative Factors

Dividend Coverage

Distributable earnings did not cover the reduced $0.05 placeholder dividend.

Earnings Performance

Granite Point reported a GAAP loss of $0.86 per share and a distributable loss of $1.98 per share, which was below consensus and analyst estimates.

Loan Loss Reserves

GAAP earnings were negatively impacted by a $27.9M, or $0.55 per share, increase to CECL loan loss reserves.

Granite Point Mortgage (GPMT) vs. S&P 500 (SPY)

Market Cap

$103.07M

Dividend Yield14.22%

Average Volume (3M)343.32K

Price to Earnings (P/E)―

Beta (1Y)1.51

Revenue Growth-26.87%

EPS Growth-189.15%

CountryUS

Employees33

SectorReal Estate

Sector Strength86

IndustryREIT - Mortgage

Share Statistics

EPS (TTM)-4.40

Shares Outstanding48,850,685

10 Day Avg. Volume353,933

30 Day Avg. Volume343,321

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)18.50

Price to Cash Flow (P/CF)1160.20

P/FCF Ratio1.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$3.33

Price Target Upside81.97% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering4

Granite Point Mortgage Business Overview & Revenue Model

Company DescriptionGranite Point Mortgage Trust Inc. (GPMT) is a real estate investment trust (REIT) that primarily focuses on originating, investing in, and managing senior floating rate commercial mortgage loans and other debt and debt-like commercial real estate investments. The company operates within the commercial real estate finance sector, providing financing solutions for a wide range of property types, including office, multifamily, hotel, and retail, across the United States.

How the Company Makes MoneyGranite Point Mortgage Trust Inc. generates revenue primarily through the interest income earned on its portfolio of commercial real estate loans. The company originates loans, typically senior floating rate loans, and earns interest over the life of the loan. GPMT also benefits from fees associated with loan origination and, occasionally, from the sale of loans or other real estate investments. By focusing on floating rate loans, GPMT seeks to position itself favorably in varying interest rate environments, which can impact its net interest income. The company's performance is influenced by factors such as prevailing interest rates, credit conditions in the commercial real estate market, and the overall economic environment.

Granite Point Mortgage Financial Statement Overview

Summary

Granite Point Mortgage faces substantial financial headwinds with declining revenues and widening net losses impacting profitability. The company's balance sheet reflects improved debt management with the elimination of its total debt in 2024, although overall asset and equity reductions pose long-term risks. Cash flows are under pressure, but strategic reductions in financing activities offer some liquidity respite. The company needs to address revenue and profit challenges to stabilize its financial trajectory.

Income Statement

Neutral

Granite Point Mortgage's income statement reveals significant challenges. The company experienced a substantial decline in revenue from $266.5 million in 2023 to $185.6 million in 2024, a drop of approximately 30.4%. Net income also turned negative at -$221.5 million in 2024, down from -$63.2 million in 2023, negatively impacting net profit margins. Gross profit margin remained strong at approximately 89.5% in 2024, indicating efficient cost management despite revenue drops, but overall profitability remains under pressure due to high net losses.

Balance Sheet

Neutral

The balance sheet shows a decrease in total assets from $2.85 billion in 2023 to $2.12 billion in 2024, alongside a decline in stockholders' equity from $858.9 million to $619.1 million. The debt-to-equity ratio improved as total debt was cleared in 2024. However, the equity ratio decreased from 30.2% in 2023 to 29.3% in 2024, reflecting reduced financial stability. The company's ability to improve its debt position is a positive indicator, but overall equity and asset reduction signal caution.

Cash Flow

Neutral

Granite Point Mortgage demonstrated a significant improvement in cash flow metrics. Operating cash flow remains positive at $8.76 million in 2024, though significantly reduced from $52.1 million in 2023. Free cash flow followed a similar trend. Despite this decline, the company reduced its financing outflows substantially, which may support future liquidity. While cash flows were pressured, strategic management of financing activities provided some relief.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
185.55M	266.49M	78.26M	87.53M	104.93M
	Gross Profit
166.09M	255.20M	47.28M	57.44M	75.90M
	EBIT
50.88M	121.89M	85.32M	68.55M	-39.85M
	EBITDA
0.00	0.00	70.82M	68.55M	-39.85M
	Net Income Common Stockholders
-221.45M	-63.20M	-40.83M	68.35M	-40.44M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
87.79M	188.37M	3.48B	191.93M	261.42M
	Total Assets
2.12B	2.85B	3.45B	3.99B	4.22B
	Total Debt
875.09M	1.95B	1.41B	2.26B	1.53B
	Net Debt
787.30M	887.33M	1.28B	2.07B	1.27B
	Total Liabilities
1.50B	1.99B	2.47B	2.26B	1.53B
	Stockholders Equity
619.09M	858.90M	983.54M	1.01B	933.85M
Cash Flow		Free Cash Flow
8.76M	52.10M	58.90M	60.30M	20.25M
	Operating Cash Flow
8.76M	52.10M	58.90M	60.30M	20.25M
	Investing Cash Flow
435.24M	561.43M	408.63M	139.77M	341.62M
	Financing Cash Flow
-528.74M	-554.47M	-531.66M	-324.97M	-192.44M

Granite Point Mortgage Technical Analysis

Technical Analysis Sentiment

Negative

Last Price1.83

Price Trends

50DMA

2.70

Negative

100DMA

2.86

Negative

200DMA

2.81

Negative

Market Momentum

MACD

-0.06

Positive

RSI

31.16

Neutral

STOCH

-6.54

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GPMT, the sentiment is Negative. The current price of 1.83 is below the 20-day moving average (MA) of 2.50, below the 50-day MA of 2.70, and below the 200-day MA of 2.81, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 31.16 is Neutral, neither overbought nor oversold. The STOCH value of -6.54 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GPMT.

Granite Point Mortgage Risk Analysis

Granite Point Mortgage disclosed 72 risk factors in its most recent earnings report. Granite Point 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

Granite Point Mortgage Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NLY	68 Neutral	$11.25B	11.61	8.40%	14.08%	13.33%	―
TWO	62 Neutral	$1.19B	4.81	13.74%	15.79%	28.33%	―
Sector *	61 Neutral	$4.30B	16.20	-3.61%	11.22%	6.29%	-21.37%
AGNC	59 Neutral	$8.16B	9.58	9.58%	16.16%	384.69%	963700.00%
MFA	55 Neutral	$943.22M	11.25	6.35%	15.33%	26.34%	79.07%
GPMT	47 Neutral	$103.07M	―	-28.15%	14.22%	-26.87%	-189.15%
CHMI	45 Neutral	$87.00M	39.53	4.93%	22.22%	18.47%	―

* Real Estate Sector Average

Performance Comparison

GPMT

Granite Point Mortgage

1.83

-2.27

-55.37%

AGNC

AGNC Investment

8.12

0.02

0.25%

NLY

Annaly Capital

17.30

1.07

6.59%

MFA

MFA Financial

8.18

-1.34

-14.08%

TWO

Two Harbors

10.72

0.21

2.00%

CHMI

Cherry Hill Mortgage

2.45

-0.35

-12.50%

Granite Point Mortgage Earnings Call Summary

Earnings Call Date: Feb 13, 2025 | % Change Since: -41.53% | Next Earnings Date: May 13, 2025

Earnings Call Sentiment Neutral

Granite Point exhibited strong efforts in loan resolutions and share buybacks, which were overshadowed by substantial net losses and a high volume of non-performing loans. The market outlook for 2025 appears optimistic, but ongoing challenges with loan resolutions and credit loss provisions persist.

Highlights

Successful Loan Resolutions

In 2024, Granite Point resolved nine loans totaling approximately $344 million at or near carrying value, with an additional $441 million in resolutions since the beginning of 2024.

Share Buyback Program

Granite Point repurchased about 2.4 million common shares in 2024, including 1.2 million in the fourth quarter, reflecting confidence in stock undervaluation.

Improved Market Sentiment

The commercial real estate market sentiment improved with better liquidity and transaction volume expected in 2025, particularly in the SASB and CLO markets.

Active Portfolio Management

The company ended the fourth quarter with a well-diversified loan portfolio of $2.2 billion in commitments and an average loan portfolio yield of about 6.6%.

Lowlights

Net Loss and Decline in Book Value

Granite Point reported a GAAP net loss of $42.4 million for the fourth quarter, with a book value decline to $8.47 per common share due to credit loss provisions and write-offs.

High Non-performing Loans

As of the end of 2024, the company had seven nonaccrual loans totaling $453 million, with significant loan resolutions still required in 2025.

Provision for Credit Losses

The fourth quarter included a provision for credit losses of $37.2 million, primarily related to collateral-dependent loans.

Challenges with Specific Loans

Several loans, including those in Baton Rouge, Chicago, and Minneapolis, remain under active resolution processes with uncertain timelines.

Company Guidance

During the Granite Point Mortgage Trust's fourth quarter and full year 2024 earnings call, the management provided comprehensive guidance on their financial performance and strategic outlook. They reported a GAAP net loss of $42.4 million or negative $0.86 per basic common share, largely driven by a provision for credit losses amounting to $37.2 million. Notably, they resolved nine loans totaling $344 million in principal balance and realized approximately $415 million in loan repayments, paydowns, and amortization over the year. The company ended 2024 with a total loan portfolio commitment of $2.2 billion, an outstanding principal balance of $2.1 billion, and a weighted average stabilized loan-to-value (LTV) of 64% at origination. They also repurchased about 2.4 million of their common shares, reflecting the belief that their stock was undervalued, with 1.2 million shares bought back in the fourth quarter. Looking ahead, Granite Point plans to navigate the improving market sentiment by focusing on liquidity, addressing nonperforming loans, and preparing to return to new originations and portfolio growth later in 2025.

Granite Point Mortgage Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Granite Point Mortgage Appoints New Board Members

Positive

Jan 15, 2025

Granite Point Mortgage Trust Inc. announced the appointment of Patrick Halter and Lazar Nikolic to its Board of Directors, effective January 15, 2025. Mr. Halter joins the Compensation Committee and Mr. Nikolic the Nominating and Corporate Governance Committee. This move is part of Granite Point’s strategy to enhance board expertise and navigate current market conditions, aiming to drive growth and shareholder value.

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.