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Lument Finance Trust (LFT)
NYSE:LFT
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Lument Finance Trust
(NYSE:LFT)
73Outperform
Positive Factors
Dividend
LFT shareholders received a total 2024 yield of 17.2% based on the YE23 closing price of $2.33 per share.
Earnings
Distributable EPS of $0.10 was reported, surpassing both consensus and lower estimates.
Stock Performance
LFT shares could provide a potential NTM total return of over ~36% based on the current dividend rate.
Negative Factors
Market Conditions
Even some multifamily markets are starting to see signs of stress, driven mostly by higher interest rates.
Lument Finance Trust (LFT) vs. S&P 500 (SPY)
Market Cap
$143.80M
Dividend Yield11.27%
Average Volume (3M)79.53K
Price to Earnings (P/E)7.9
Beta (1Y)0.56
Revenue Growth33.30%
EPS Growth50.74%
CountryUS
Employees600
SectorReal Estate
Sector Strength75
IndustryREITs
Share Statistics
EPS (TTM)0.35
Shares Outstanding52,292,107
10 Day Avg. Volume67,822
30 Day Avg. Volume79,528
Financial Highlights & Ratios
PEG Ratio0.16
Price to Book (P/B)N/A
Price to Sales (P/S)3.72
Price to Cash Flow (P/CF)5.80
P/FCF Ratio4.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.25Price Target Upside16.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Lument Finance Trust Business Overview & Revenue Model
Company DescriptionHunt Companies Finance Trust, Inc. operates as a real estate investment finance company, which engages in investing, financing, and managing a portfolio of mortgage-backed securities, residential mortgage loans, and other mortgage related investments. Its objective is to attract long-term risk-adjusted returns to its stockholders. The company was founded on March 28, 2012 and is headquartered in New York, NY.
How the Company Makes MoneyLument Finance Trust generates revenue primarily through interest income earned on its commercial real estate debt investments. The company originates and acquires a diversified portfolio of commercial mortgage loans, which provide a steady stream of interest payments over time. Additionally, LFT may engage in the securitization of some of its loans, selling them to investors while retaining a portion of the risk and generating fee income. The company's earnings are influenced by interest rate environments, the creditworthiness of its borrowers, and the overall performance of the commercial real estate market. Strategic partnerships with financial institutions and real estate operators may also enhance LFT's ability to originate loans and access capital markets, contributing to its revenue growth.
Lument Finance Trust Financial Statement Overview
Summary
Lument Finance Trust displays robust revenue growth and strong operational efficiencies, as evidenced by high gross and EBIT margins. However, the company's high leverage remains a concern, indicating potential financial risk. Cash flows are strong, showing effective cash management and liquidity. Overall, while the company has demonstrated solid performance and growth, careful monitoring of leverage and financial stability is advised.Income Statement
The company shows a significant revenue growth in the TTM (Trailing-Twelve-Months) compared to previous periods, with total revenue jumping to 107.97 million from 32.08 million annually. Gross profit margin is strong at 93.62% for TTM. The EBIT margin is also healthy at 54.26%, indicating efficient cost management. However, net profit margin stands at 21.19%, which, although positive, reflects substantial non-operating expenses.78
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 4.13 for TTM, indicating substantial leverage which could pose financial risk. The equity ratio is relatively low at 19.35%, suggesting a high dependence on external financing. Return on equity (ROE) is moderate at 9.41%, reflecting decent profitability from shareholders' equity.65
Positive
Cash Flow
Operating cash flow to net income ratio is strong at 1.15, suggesting good cash generation from operations relative to net income. Free cash flow has grown modestly over the periods, and the free cash flow to net income ratio is healthy at 1.15, indicating efficient management of operating and capital expenditures.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 107.97M | 32.08M | 24.22M | 21.07M | 19.14M | 16.27M | Gross Profit |
| 101.03M | 32.08M | 23.91M | 20.79M | -1.47B | -344.25M | EBIT |
| 58.58M | 21.98M | 5.11M | 10.61M | 7.97M | 6.21M | EBITDA |
| 62.99M | 94.52M | 5.17M | 10.61M | 7.97M | 6.21M | Net Income Common Stockholders |
| 22.87M | 19.71M | 9.86M | 10.53M | 8.45M | 6.25M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 7.88M | 51.25M | 1.12B | 14.75M | 11.38M | 10.94M | Total Assets |
| 679.35M | 1.45B | 1.13B | 1.05B | 621.49M | 657.90M | Total Debt |
| 523.21M | 1.19B | 876.28M | 873.63M | 502.62M | 545.31M | Net Debt |
| 515.33M | 1.14B | 832.42M | 858.88M | 491.24M | 534.37M | Total Liabilities |
| 529.15M | 1.21B | 884.96M | 879.55M | 507.79M | 549.26M | Stockholders Equity |
| 150.10M | 240.69M | 242.90M | 169.28M | 113.60M | 108.55M |
| Cash Flow | Free Cash Flow | ||||
| 26.31M | 24.74M | 16.29M | 13.85M | 12.22M | 7.28M | Operating Cash Flow |
| 26.31M | 24.74M | 16.29M | 13.85M | 12.22M | 7.28M | Investing Cash Flow |
| 199.05M | -316.72M | -51.83M | -477.29M | 87.92M | -42.30M | Financing Cash Flow |
| -213.63M | 296.13M | 64.63M | 412.35M | -46.77M | -8.19M |
Lument Finance Trust Technical Analysis
Positive
2.79
Price Trends
2.66
Positive
2.55
Positive
2.41
Positive
Market Momentum
0.02
Positive
56.89
Neutral
74.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LFT, the sentiment is Positive. The current price of 2.79 is above the 20-day moving average (MA) of 2.73, above the 50-day MA of 2.66, and above the 200-day MA of 2.41, indicating a bullish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 56.89 is Neutral, neither overbought nor oversold. The STOCH value of 74.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LFT.
Lument Finance Trust Risk Analysis
Lument Finance Trust disclosed 102 risk factors in its most recent earnings report. Lument Finance Trust 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
Lument Finance Trust Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $6.79B | 18.18 | 5.55% | 9.54% | -0.97% | 3.75% | |
73 Outperform | $143.80M | 7.93 | 9.46% | 11.27% | 33.30% | 50.74% | |
70 Outperform | $2.33B | 10.41 | 8.62% | 14.01% | -11.26% | -33.80% | |
64 Neutral | $1.11B | 12.50 | 6.92% | 10.39% | 7.13% | 64.82% | |
61 Neutral | $1.38B | ― | -6.02% | 12.04% | -9.71% | -426.57% | |
61 Neutral | $4.80B | 18.53 | -3.89% | 10.14% | 6.07% | -19.21% | |
60 Neutral | $3.59B | ― | -5.01% | 10.43% | -12.86% | -182.05% |
* Real Estate Sector Average
Performance Comparison
LFT
Lument Finance Trust
2.79
0.79
39.50%
ARI
Apollo Real Estate
9.96
0.01
0.10%
CIM
Chimera Investment
13.67
1.49
12.23%
ABR
Arbor Realty
12.31
0.87
7.60%
BXMT
Blackstone Mortgage
21.07
3.18
17.78%
STWD
Starwood Property
20.25
1.77
9.58%
Lument Finance Trust Earnings Call Summary
Earnings Call Date: Mar 19, 2025 | % Change Since: 0.00% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted stable portfolio performance and positive resolution of a previously distressed asset, along with consistent dividend payments. However, challenges remain due to the presence of 5-rated loans, reinvestment limitations, and macroeconomic uncertainties.Highlights
Positive Resolution of 5-Rated Loan
Achieved a positive resolution on a $20.3 million loan collateralized by multifamily properties in Augusta, Georgia, which was previously in monetary default.
Stable Portfolio Performance
Portfolio held steady with a weighted average risk rating of 3.6 and no new loans added to the 5 risk rating category.
Dividend Consistency
Declared a dividend of $0.08 per common share for the third quarter, in line with the prior quarter.
Strong Multifamily Market Fundamentals
Continued confidence in the multifamily market with stability in asset cap rates and an increase in property acquisition activity.
Lowlights
Presence of 5-Rated Loans
As of September 30, there were 4 loans rated 5, representing approximately 7% of the carrying value of the total portfolio, indicating elevated risk.
Limited Reinvestment Capacity
Portfolio constraints due to the CLO 1 being through its reinvestment period, leading to limited reinvestment opportunities.
Macroeconomic Uncertainty
Uncertainties related to the new government administration and potential economic policy changes impacting market stability.
Company Guidance
During the Lument Finance Trust (LFT) third-quarter 2024 earnings call, the company provided several key financial metrics and strategic insights. The company reported a GAAP net income and distributable earnings of $0.10 per share, with a declared dividend of $0.08 per common share. LFT experienced $51 million in loan payoffs and acquired two new loans totaling $45 million, resulting in a portfolio consisting of 75 floating-rate loans with an aggregate unpaid principal balance of approximately $1.2 billion. The portfolio's weighted average risk rating remained stable at 3.6, with no additions to the 5 risk rating category. LFT's total operating expenses decreased to $2.9 million from $3.5 million in the previous quarter, largely due to lower incentive fees. The company ended the quarter with a total equity of approximately $243 million and a book value of common stock at $3.50 per share. Looking forward, LFT aims to leverage its manager's origination pipeline and explore refinancing opportunities to enhance shareholder value and maintain a stable dividend.Lument Finance Trust Corporate Events
Dividends
Lument Finance Trust Declares Q4 2024 Dividends
Positive
Dec 13, 2024
Lument Finance Trust, Inc. announced the declaration of a cash dividend of $0.08 per share for common stock in the fourth quarter of 2024, along with a special cash dividend of $0.09 per share due to real estate investment trust tax considerations. Additionally, a cash dividend of $0.4921875 per share was declared for the 7.875% Cumulative Redeemable Series A Preferred Stock. These dividends are scheduled for payment in January 2025, impacting common and preferred stockholders, reflecting the company’s focus on returning value to its investors.
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.