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Granite Point Mortgage Trust (GPMT)
:GPMT
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Granite Point Mortgage
(NYSE:GPMT)52Neutral
Positive Factors
Share Repurchase
During the quarter, GPMT repurchased 1.2M shares of its common stock, which increased book value by $0.13 per share.
Negative Factors
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 Losses
Distributable earnings were negatively impacted by $95.2M in write-offs related to the resolution of four 5-rated loans.
Granite Point Mortgage (GPMT) vs. S&P 500 (SPY)
Market Cap
$139.22M
Dividend Yield10.53%
Average Volume (3M)368.89K
Price to Earnings (P/E)―
Beta (1Y)1.52
Revenue Growth-26.87%
EPS Growth-189.15%
CountryUS
Employees35
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)-4.40
Shares Outstanding48,850,685
10 Day Avg. Volume364,930
30 Day Avg. Volume368,890
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
$3.42Price Target Upside21.28% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Granite Point Mortgage Business Overview & Revenue Model
Company DescriptionGranite Point Mortgage Trust, Inc. operates as a real estate investment trust. It focuses primarily on directly originating, investing in and managing senior commercial mortgage loans and other debt, such as commercial real estate investments. The company was founded on April 7, 2017 and is headquartered in New York, NY.
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
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.45
Neutral
Balance Sheet
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.50
Neutral
Cash Flow
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.60
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 176.54M | 185.55M | 266.49M | 78.26M | 87.53M | 104.93M | Gross Profit |
| 147.30M | 166.09M | 255.20M | 47.28M | 57.44M | 75.90M | EBIT |
| 22.45M | 50.88M | 121.89M | 85.32M | 68.55M | -39.85M | EBITDA |
| 32.10M | 0.00 | 0.00 | 70.82M | 68.55M | -39.85M | Net Income Common Stockholders |
| -185.88M | -221.45M | -63.20M | -40.83M | 68.35M | -40.44M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 91.70M | 87.79M | 188.37M | 3.48B | 191.93M | 261.42M | Total Assets |
| 3.36B | 2.12B | 2.85B | 3.45B | 3.99B | 4.22B | Total Debt |
| 997.40M | 875.09M | 1.95B | 1.41B | 2.26B | 1.53B | Net Debt |
| 905.70M | 787.30M | 887.33M | 1.28B | 2.07B | 1.27B | Total Liabilities |
| 2.53B | 1.50B | 1.99B | 2.47B | 2.26B | 1.53B | Stockholders Equity |
| 827.53M | 619.09M | 858.90M | 983.54M | 1.01B | 933.85M |
| Cash Flow | Free Cash Flow | ||||
| 18.08M | 8.76M | 52.10M | 58.90M | 60.30M | 20.25M | Operating Cash Flow |
| 17.24M | 8.76M | 52.10M | 58.90M | 60.30M | 20.25M | Investing Cash Flow |
| 472.66M | 435.24M | 561.43M | 408.63M | 139.77M | 341.62M | Financing Cash Flow |
| -649.91M | -528.74M | -554.47M | -531.66M | -324.97M | -192.44M |
Granite Point Mortgage Technical Analysis
Negative
2.82
Price Trends
2.88
Negative
3.02
Negative
2.91
Negative
Market Momentum
-0.02
Positive
45.43
Neutral
40.95
Neutral
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 2.82 is below the 20-day moving average (MA) of 2.93, below the 50-day MA of 2.88, and below the 200-day MA of 2.91, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 45.43 is Neutral, neither overbought nor oversold. The STOCH value of 40.95 is Neutral, 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 75 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 |
|---|---|---|---|---|---|---|---|
69 Neutral | $9.36B | 10.99 | 9.58% | 14.09% | 384.69% | 963700.00% | |
68 Neutral | $12.52B | 13.35 | 7.95% | 12.14% | 13.33% | ― | |
62 Neutral | $1.44B | 5.82 | 11.86% | 13.04% | 28.33% | ― | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
60 Neutral | $1.07B | 12.76 | 6.47% | 13.30% | 26.34% | 79.07% | |
52 Neutral | $139.22M | ― | -28.15% | 10.53% | -26.87% | -189.15% | |
50 Neutral | $108.91M | ― | -13.30% | 17.75% | 16.46% | 29.76% |
* Real Estate Sector Average
Performance Comparison
GPMT
Granite Point Mortgage
2.82
-1.50
-34.72%
AGNC
AGNC Investment
10.29
2.02
24.43%
NLY
Annaly Capital
21.69
4.71
27.74%
MFA
MFA Financial
10.63
0.84
8.58%
TWO
Two Harbors
13.93
2.79
25.04%
CHMI
Cherry Hill Mortgage
3.43
0.37
12.09%
Granite Point Mortgage Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -11.60% | 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.
Executive/Board ChangesBusiness Operations and Strategy
Granite Point Mortgage Announces Leadership Transition Plan
Neutral
Jan 7, 2025
Granite Point Mortgage Trust Inc. announced a transition in its Chief Operating Officer role, with Ethan Lebowitz set to succeed Steven Plust by May 1, 2025. Plust will continue as Senior Managing Director until his retirement in 2027. This leadership change reflects the company’s internal talent development and aims to maintain operational momentum and strategic growth.
Business Operations and Strategy
Granite Point Mortgage Highlights Strategic Financial Position
Positive
Jan 6, 2025
Granite Point Mortgage has released an investor presentation that outlines its business strategy and financial position, emphasizing its experienced senior team and diversified investment portfolio. The company highlights its focus on originating and managing floating-rate first mortgage loans on high-quality U.S. commercial real estate, with a well-balanced funding profile and a strategic emphasis on non-recourse and non-mark-to-market financing. The presentation suggests a strong market opportunity for non-bank specialty finance companies in the commercial real estate lending markets, which are expected to gain market share from traditional banks over the long term.
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.