Ready Capital Intrinsic Stock Value – Ready Capital Reports Miss on Both Revenue and EPS Estimates
May 9, 2023
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The non-GAAP earnings per share of $0.30 fell short of the expectations by $0.11, while the revenue of $101.28M was below the expected amount by $99.85M. Ready Capital ($NYSE:RC) is a commercial real estate finance company specializing in financing, investing and managing a variety of multifamily and commercial real estate debt and equity investments. Its portfolio consists of primarily senior mortgage loans collateralized by stabilized commercial real estate properties. Furthermore, it reported higher operating expenses, largely attributed to increased travel and other professional fees. Looking forward, Ready Capital is focused on originating more multifamily debt, particularly through its agency lending platform.
It also plans to expand its asset management activities and focus on delivering returns to shareholders through strategic capital investments. Despite missing estimates in its latest quarterly report, Ready Capital remains focused on long-term goals and is well-positioned to take advantage of growth opportunities going forward.
Earnings
Ready Capital recently reported their earnings for the 4th quarter of FY2022 ending on December 31, 2022. Unfortunately, the company missed both their revenue and earnings per share (EPS) expectations. Total revenue for READY CAPITAL for the quarter amounted to 2.0M USD, representing a 0.0% decrease from the same period the previous year. This decline in revenue is not indicative of READY CAPITAL’s performance over the last three years, however, as their total revenue has grown from nanM USD to 2.0M USD in that time.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Ready Capital. More…
| Total Revenues | Net Income | Net Margin |
| 460.25 | 186.27 | – |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Ready Capital. More…
| Operations | Investing | Financing |
| 359.15 | -1.56k | 1.17k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Ready Capital. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 11.62k | 9.72k | 15.2 |
Key Ratios Snapshot
Some of the financial key ratios for Ready Capital are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| – | – | – |
| FCF Margin | ROE | ROA |
| – | – | – |
Share Price
On Monday, READY CAPITAL reported a miss on both revenue and earnings per share estimates. The stock opened at $10.3 and closed at $10.4, up 0.9% from the prior closing price of $10.3. These results indicate that investors are still expecting long-term growth from the company despite the short-term setback in earnings. This is a significant missed expectation and may have contributed to the stock’s relatively flat performance on Monday.
READY CAPITAL’s reported miss on both its revenue and earnings per share estimates may cause investors to remain concerned about its prospects going forward. Despite the setback in earnings, investors may still find value in the company’s long-term growth potential. As such, READY CAPITAL may still be seen as an attractive option for investors looking for a potentially profitable investment opportunity. Live Quote…
Analysis – Ready Capital Intrinsic Stock Value
At GoodWhale, we have conducted a thorough analysis of READY CAPITAL‘s fundamentals. Using our proprietary Valuation Line, we have determined the fair value of READY CAPITAL’s share to be around $13.8. Currently, READY CAPITAL’s stock is traded at $10.4, resulting in a 24.4% undervaluation of the company’s stock. This presents an opportunity for investors to capitalize on this mispricing in the market and make a potentially lucrative investment. More…
Peers
In the past decade, the commercial real estate lending landscape has shifted dramatically. New players have emerged and old ones have fallen by the wayside. Among the new breed of lenders is Ready Capital Corp, which has quickly established itself as a major player in the space. Ready Capital’s success has come at the expense of its competitors, who have been forced to adapt or die. Among those competitors are TPG RE Finance Trust Inc, ECC Capital Corp, and Manhattan Bridge Capital Inc.
– TPG RE Finance Trust Inc ($NYSE:TRTX)
TPG RE Finance Trust Inc is a publicly traded real estate investment trust that focuses on originating and acquiring senior loans collateralized by commercial real estate properties. The company’s portfolio includes office, retail, hospitality, industrial, and other types of commercial real estate properties. TPG RE Finance Trust Inc is headquartered in New York, New York.
– ECC Capital Corp ($OTCPK:ECRO)
ECC Capital Corp is a specialty finance company that provides financing solutions to small and medium-sized businesses in the United States. The company has a market cap of $7.81 million as of February 2022. ECC Capital Corp is headquartered in New York, New York.
– Manhattan Bridge Capital Inc ($NASDAQ:LOAN)
Manhattan Bridge Capital Inc is a real estate finance company that originates, services, and manages a portfolio of first mortgage loans. The Company operates in the New York metropolitan area. It offers short-term secured, non-banking loans to real estate investors to fund their acquisition, renovation, or rehabilitation of properties located in the New York metropolitan area.
Summary
Ready Capital is a publicly traded financial services company that recently released its third quarter financial results. The company failed to meet analysts’ expectations, posting non-GAAP earnings per share of $0.30, which was $0.11 lower than estimates. Investors are likely to be discouraged by the poor performance, as it signals a potential downward trend for the company. Going forward, investors will want to monitor Ready Capital’s performance to gauge whether this was a one-time hiccup or something more concerning.
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