Ready Capital Corporation

$1.75

-0.28%

N/A-$0.01

Real Estate

REIT - Mortgage

NYSE

Active Trading

Ready Capital Corporation is a U.S.-based entity primarily engaged in the real estate finance sector. Its business activities encompass the procurement, generation, ...

Fundamental Analysis of RC

Key Strengths

Strong market position in small-balance commercial lending with over $35 billion in originations since inception (per company data).

Diversified business model across SBC lending, SBA 7(a) lending, and residential mortgage banking, providing multiple revenue streams.

Risk Factors

High leverage (debt-to-equity 3.735) and debt-to-assets ratio (0.744) increase financial risk.

Negative net margins and ROE indicate severe profitability issues, possibly due to credit losses and impairments.

Profitability

Net Margin-135.95%

Operating Margin-108.15%

Valuation

P/E Ratio-0.51x

Current Ratio0.28

Efficiency

ROE-37.62%

ROA-8.88%

Fundamental Analysis of RC

Ready Capital Corporation is a mortgage REIT specializing in small-balance commercial (SBC) loans, SBA 7(a) loans, and residential mortgage banking. As of the latest TTM data, the company is experiencing significant financial distress. Revenue per share is $2.489, but net income per share is -$3.384, resulting in a net profit margin of -136%. This indicates that the company is losing more than its revenue, driven by high credit costs and impairments in its commercial real estate portfolio. The return on equity is -37.6%, and return on assets is -8.9%, reflecting severe profitability issues. The balance sheet is highly leveraged with a debt-to-equity ratio of 3.735, and the current ratio is only 0.171, indicating potential liquidity challenges. The company's price-to-book ratio is 0.231, which might suggest undervaluation, but it could also reflect the market's concerns about asset quality and future earnings. The dividend yield is 8.9% (based on the last dividend of $0.155), but the dividend payout ratio is negative, implying the dividend is not covered by earnings. The company's stock price has dropped from a 52-week high of $4.47 to $1.75, reflecting investor pessimism. Analyst consensus suggests a SELL rating with a target price of $2.00. Key risks include rising delinquencies (60+ day core delinquencies at 14.8% of the core CRE portfolio), elevated leverage, and negative operating cash flows relative to debt service. However, the company has a strong franchise in SBC lending, with over $35 billion in originations since inception, and serves a niche market. The future depends on its ability to navigate credit cycle and deleverage successfully.

Key Strengths of RC

Strong market position in small-balance commercial lending with over $35 billion in originations since inception (per company data).
Diversified business model across SBC lending, SBA 7(a) lending, and residential mortgage banking, providing multiple revenue streams.
Franchise value in SBA lending, which benefits from government guarantees, reducing credit risk on those loans.
Experienced management team with a long track record in the industry.
Potential for recovery as the real estate market stabilizes and credit conditions improve.
Low price-to-book ratio (0.231) may present a value opportunity if asset quality stabilizes.

Risk Factors of RC

High leverage (debt-to-equity 3.735) and debt-to-assets ratio (0.744) increase financial risk.
Negative net margins and ROE indicate severe profitability issues, possibly due to credit losses and impairments.
Rising core CRE delinquencies (14.8% for 60+ days) signal deteriorating asset quality.
Dividend is not covered by earnings and may be cut further or eliminated.
Liquidity concerns with current ratio of 0.171, potentially leading to funding stress.
Macro risks: rising interest rates and economic slowdown could increase defaults and reduce loan origination volumes.
Regulatory risks: REIT status requires distributing 90% of taxable income, which may strain cash flows in a downturn.

Market Cap vs Revenue & Earnings

Earnings

n/a

Revenue

n/a

Market cap

$289.13M

-0.5x

P/E Ratio

0.7x

P/S Ratio

Earnings & Revenue

Last Reportedn/a

Earnings per share (EPS)n/a

Gross Margin-17.82%

Net Profit Margin-135.95%

Debt/Equity Ratio3.74

Profitability Bridge (Current vs YoY)

How gross, operating and net margins shifted versus last year.

Revenue / Net Income / FCF History (USD B)

Growth Signals of RC

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Revenue	—	—	—	—	Flat
Diluted EPS	—	—	—	—	Flat
Free Cash Flow	—	—	—	—	Flat

Profitability of RC

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Net Margin	—	-146.16%	—	—	Flat
Operating Margin	—	-43.81%	—	—	Flat
ROE	—	—	—	—	Flat

Financial Health of RC

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Current Ratio	—	0.276	—	—	Flat
Quick Ratio	—	0.276	—	—	Flat
Debt / Equity	—	3.735	—	—	Flat

Valuation of RC

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
P/E	—	-0.71x	—	—	Flat
P/B	—	0.23x	—	—	Flat

Supply Chain of RC

RELATIONS

Upstream

Waterfall Asset Management, LLCFreddie Mac (Federal Home Loan Mortgage Corp)OTC:FMCC Fannie Mae (Federal National Mortgage Association)OTC:FNMAU.S. Small Business Administration (SBA)Morgan Stanley & Co. LLCNYSE:MS Piper Sandler & Co.NYSE:PIPR RBC Capital Markets (Royal Bank of Canada)NYSE:RY Computershare LtdNYSE:CPUiBusiness Funding, LLCGMFS, LLCEsusu Financial Inc.Ebusiness Funding, LLCReadyCap Lending, LLCKnight Capital, LLC / Knight Capital Funding I, LLC

Downstream

Multifamily Commercial Real Estate BorrowersSmall Business Borrowers (SBA 7(a) & USDA loan recipients)Freddie Mac (Federal Home Loan Mortgage Corp)OTC:FMCC Fannie Mae (Federal National Mortgage Association)OTC:FNMASecuritization Note Investors (institutional)United Development Funding IV (UDF IV) ShareholdersOffice / Industrial / Retail Commercial Real Estate Borrowers

Proxies

Arbor Realty Trust Inc.NYSE:ABR Blackstone Mortgage Trust Inc.NYSE:BXMT Starwood Property Trust Inc.NYSE:STWD Ares Commercial Real Estate Corp.NYSE:ACRE Apollo Commercial Real Estate Finance Inc.NYSE:ARI

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Plutux is not an investment adviser. Market data and AI-generated analysis are for information and education only, not investment advice. Disclaimer