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

Key Points

• Angel Oak Mortgage REIT missed quarterly expectations: Earnings were $0.28 per share, $0.04 below estimates, while revenue came in at negative $10.63 million versus expectations of $11.39 million.
• Book value declined sharply due to market pressures: GAAP net loss totaled $16.7 million, and book value fell 11.5% to $8.97 per share as higher rates and wider non-QM spreads caused non-cash valuation losses. Credit performance remained stable, with 90-plus-day delinquencies at approximately 2.1%.
• Liquidity and shareholder distributions remained intact: The company completed multiple securitizations, retained approximately $1 billion in undrawn financing capacity, and maintained its $0.32-per-share quarterly dividend. Management expects returns to improve toward its historical 15%-20% target if rates stabilize.

Angel Oak Mortgage REIT (NYSE:AOMR - Get Free Report) announced its quarterly earnings results on Tuesday. The company reported $0.28 earnings per share for the quarter, missing the consensus estimate of $0.32 by ($0.04), FiscalAI reports. Angel Oak Mortgage REIT had a return on equity of 7.74% and a net margin of 11.85%. The business had revenue of ($10.63) million during the quarter, compared to analysts' expectations 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 Price Performance

Shares of Angel Oak Mortgage REIT stock traded down $0.42 during mid-day trading on Tuesday, reaching $6.73. 77,492 shares of the stock traded hands, compared to its average volume of 116,675. The stock has a market capitalization of $156.24 million, a PE ratio of 8.97 and a beta of 1.28. The business has a 50-day moving average of $7.66 and a 200 day moving average of $8.45. Angel Oak Mortgage REIT has a fifty-two week low of $6.63 and a fifty-two week high of $9.48. The company has a quick ratio of 7.16, a current ratio of 7.16 and a debt-to-equity ratio of 8.76.

Insider Activity

In other Angel Oak Mortgage REIT news, CFO Brandon Filson sold 65,000 shares of the firm's stock in a transaction that occurred on Tuesday, September 22nd. The shares were sold at an average price of $7.93, for a total value of $515,450.00. Following the transaction, the chief financial officer directly owned 107,815 shares of the company's stock, valued at $854,972.95. This trade represents a 37.61% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, Director W D. Minami bought 6,800 shares of the 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 completion of the acquisition, the director owned 87,118 shares in the company, valued at approximately $705,655.80. The trade was a 8.47% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. Company insiders own 2.90% of the company's stock.

Analyst Upgrades and Downgrades

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

About Angel Oak Mortgage REIT

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.

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