Ready Capital (NYSE:RC) Reaches New 12-Month Low - Should You Sell?

Key Points

• Ready Capital's shares hit a new 12-month low at $3.75, down from a previous close of $3.82, reflecting a struggling stock performance with over 1.3 million shares traded.
• Analysts have decreased their target prices, with Keefe, Bruyette & Woods lowering it from $4.25 to $3.75, reflecting a prevailing "underperform" sentiment among several firms.
• The company reported disappointing earnings with a significant EPS miss of ($0.14), far below expectations, leading to concerns about its financial health.

Ready Capital Corp (NYSE:RC - Get Free Report) shares reached a new 52-week low on Monday . The stock traded as low as $3.75 and last traded at $3.77, with a volume of 1328979 shares. The stock had previously closed at $3.82.

Wall Street Analyst Weigh In

Several analysts have recently issued reports on RC shares. Keefe, Bruyette & Woods reduced their target price on shares of Ready Capital from $4.25 to $3.75 and set an "underperform" rating for the company in a research note on Tuesday, August 12th. Wall Street Zen downgraded shares of Ready Capital from a "hold" rating to a "sell" rating in a research report on Saturday. B. Riley dropped their target price on shares of Ready Capital from $6.00 to $4.00 and set a "neutral" rating on the stock in a research report on Monday, August 11th. Finally, UBS Group cut their target price on Ready Capital from $4.75 to $4.50 and set a "neutral" rating on the stock in a research note on Wednesday, May 21st. Two investment analysts have rated the stock with a sell rating, five have assigned a hold rating and one has assigned a buy rating to the company's stock. Based on data from MarketBeat, the company currently has an average rating of "Hold" and an average price target of $5.96.

Ready Capital Price Performance

The stock has a market capitalization of $619.52 million, a PE ratio of -2.04 and a beta of 1.47. The company has a debt-to-equity ratio of 0.76, a current ratio of 1.61 and a quick ratio of 1.61. The firm's 50 day simple moving average is $4.35 and its 200 day simple moving average is $4.83.

Ready Capital (NYSE:RC - Get Free Report) last issued its earnings results on Thursday, August 7th. The real estate investment trust reported ($0.14) EPS for the quarter, missing analysts' consensus estimates of ($0.01) by ($0.13). Ready Capital had a positive return on equity of 3.76% and a negative net margin of 40.59%. The business had revenue of ($9.77) million during the quarter, compared to analysts' expectations of $167.26 million. As a group, equities analysts forecast that Ready Capital Corp will post 0.93 EPS for the current fiscal year.

Ready Capital Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Thursday, July 31st. Shareholders of record on Monday, June 30th were given a $0.125 dividend. The ex-dividend date was Monday, June 30th. This represents a $0.50 annualized dividend and a yield of 13.3%. Ready Capital's payout ratio is presently -27.03%.

Institutional Trading of Ready Capital

Institutional investors have recently made changes to their positions in the stock. Private Management Group Inc. bought a new position in shares of Ready Capital during the first quarter valued at about $8,235,000. Marshall Wace LLP bought a new position in shares of Ready Capital during the second quarter valued at approximately $6,542,000. Nexpoint Asset Management L.P. purchased a new stake in Ready Capital in the first quarter worth $4,444,000. Hudson Bay Capital Management LP purchased a new position in Ready Capital during the 4th quarter valued at $4,393,000. Finally, Invesco Ltd. increased its position in Ready Capital by 16.1% during the 1st quarter. Invesco Ltd. now owns 3,618,181 shares of the real estate investment trust's stock valued at $18,417,000 after purchasing an additional 502,162 shares during the period. Hedge funds and other institutional investors own 55.87% of the company's stock.

Ready Capital Company Profile

Ready Capital Corporation operates as a real estate finance company in the United States. It operates through two segments: LMM Commercial Real Estate and Small Business Lending. The company originates, acquires, finances, and services lower-to-middle-market (LLM) commercial real estate loans, small business administration (SBA) loans, residential mortgage loans, construction loans, and mortgage-backed securities collateralized primarily by LLM loans, or other real estate-related investments.

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