Rithm Capital (NYSE:RITM) Hits New 1-Year Low - Here's Why

Key Points

• Rithm Capital hit a new 52-week low, trading as low as $9.11 (last $9.095) on heavy volume and was down about 3% in the session.
• Analysts remain largely positive with a consensus rating of “Moderate Buy” and an average price target of $14.50, indicating substantial implied upside from current levels.
• The company beat Q4 estimates (EPS $0.74 vs. $0.55; revenue $1.29B vs. $1.24B) but carries high leverage and liquidity risk—debt-to-equity 2.20, quick/current ratios 0.58—and pays a high 11.0% yield with a ~96% payout ratio.

Rithm Capital Corp. (NYSE:RITM - Get Free Report)'s share price reached a new 52-week low during trading on Wednesday . The company traded as low as $9.11 and last traded at $9.0950, with a volume of 6197870 shares traded. The stock had previously closed at $9.36.

Analysts Set New Price Targets

Several research firms have issued reports on RITM. Weiss Ratings restated a "hold (c+)" rating on shares of Rithm Capital in a research note on Monday, December 29th. Wedbush started coverage on Rithm Capital in a report on Monday, December 15th. They issued an "outperform" rating and a $14.00 price objective on the stock. Keefe, Bruyette & Woods reaffirmed an "outperform" rating on shares of Rithm Capital in a report on Thursday, December 18th. Wall Street Zen raised Rithm Capital from a "hold" rating to a "buy" rating in a research note on Saturday, March 7th. Finally, Piper Sandler restated an "overweight" rating and set a $15.00 target price (down from $15.50) on shares of Rithm Capital in a research note on Wednesday, February 4th. Seven research analysts have rated the stock with a Buy rating and one has given a Hold rating to the stock. According to MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average target price of $14.50.

Rithm Capital Trading Down 3.0%

The company has a market cap of $5.04 billion, a P/E ratio of 8.74 and a beta of 1.21. The firm's 50 day moving average is $10.72 and its two-hundred day moving average is $11.11. The company has a quick ratio of 0.58, a current ratio of 0.58 and a debt-to-equity ratio of 2.20.

Rithm Capital (NYSE:RITM - Get Free Report) last issued its quarterly earnings data on Tuesday, February 3rd. The real estate investment trust reported $0.74 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.55 by $0.19. The company had revenue of $1.29 billion during the quarter, compared to the consensus estimate of $1.24 billion. Rithm Capital had a return on equity of 19.74% and a net margin of 15.55%. As a group, equities research analysts anticipate that Rithm Capital Corp. will post 1.93 EPS for the current year.

Rithm Capital Dividend Announcement

The firm also recently disclosed a quarterly dividend, which was paid on Friday, January 30th. Stockholders of record on Wednesday, December 31st were given a $0.25 dividend. The ex-dividend date of this dividend was Wednesday, December 31st. This represents a $1.00 annualized dividend and a dividend yield of 11.0%. Rithm Capital's dividend payout ratio (DPR) is 96.15%.

Institutional Inflows and Outflows

A number of institutional investors have recently modified their holdings of the stock. CoreCap Advisors LLC raised its holdings in shares of Rithm Capital by 99.2% during the fourth quarter. CoreCap Advisors LLC now owns 2,295 shares of the real estate investment trust's stock valued at $25,000 after purchasing an additional 1,143 shares during the period. Los Angeles Capital Management LLC bought a new position in shares of Rithm Capital in the fourth quarter valued at approximately $26,000. Bessemer Group Inc. increased its position in shares of Rithm Capital by 658.9% during the 3rd quarter. Bessemer Group Inc. now owns 2,656 shares of the real estate investment trust's stock valued at $30,000 after purchasing an additional 2,306 shares during the last quarter. Atlantic Union Bankshares Corp purchased a new stake in Rithm Capital during the third quarter worth about $31,000. Finally, FNY Investment Advisers LLC purchased a new stake in shares of Rithm Capital during the 4th quarter worth approximately $31,000. Institutional investors and hedge funds own 44.92% of the company's stock.

About Rithm Capital

Rithm Capital Corporation is a specialty finance company that originates, acquires and manages structured credit investments collateralized by real estate assets in the United States. The company focuses primarily on senior floating-rate loans secured by multifamily, commercial, industrial and single-family rental properties, aiming to deliver attractive risk-adjusted yields through a diversified portfolio of floating-rate real estate debt.

In addition to senior loans, Rithm Capital invests in residential mortgage-backed securities, including agency and non-agency pools, as well as other real estate-related credit instruments.

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