Rithm Capital (RITM) TTM Earnings Surge 60.5% Tests Bearish Cash Flow Narratives

Simply Wall St.02-04 09:29

Rithm Capital (RITM) has put up a steady run of numbers heading into FY 2025, with third quarter revenue at US$943 million and basic EPS of US$0.36, alongside trailing twelve month revenue of about US...

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The company has seen quarterly revenue move between US$646 million and US$1.3 billion over the last six reported periods, with basic EPS ranging from US$0.07 to US$0.54. This sets a clear backdrop for how investors might read the current US$10.95 share price...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"TTM":"塔塔汽车","RITM":"Rithm Capital"},"translate_title":"Rithm Capital(RITM)TTM盈利飙升60.5%考验看跌现金流叙事","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TTM":1.5,"RITM":1.5},"content_text":"Rithm Capital (RITM) has put up a steady run of numbers heading into FY 2025, with third quarter revenue at US$943 million and basic EPS of US$0.36, alongside trailing twelve month revenue of about US$4.0 billion and EPS of US$1.47. The company has seen quarterly revenue move between US$646 million and US$1.3 billion over the last six reported periods, with basic EPS ranging from US$0.07 to US$0.54. This sets a clear backdrop for how investors might read the current US$10.95 share price against its recent earnings power and improving net margins. See our full analysis for Rithm Capital. With the latest results on the table, the next step is to see how these numbers line up against the widely followed narratives around Rithm’s growth, risks, and income profile, and where those stories might need a rethink. Curious how numbers become stories that shape markets? Explore Community Narratives NYSE:RITM Earnings & Revenue History as at Feb 2026 AdvertisementTTM profit climbs to US$777 million  Over the last twelve months, Rithm generated US$3.96b of revenue and US$777 million of net income, with EPS at US$1.47 on a trailing basis and net margin reported at 19.6% versus 16.1% the prior year. What stands out for a bullish view is that earnings grew 60.5% year over year and are described as high quality, yet forecasts call for a slower 8.5% earnings growth rate each year. This invites questions about how repeatable the recent US$777 million of profit really is.\n     Supporters can point to revenue forecasts of 10.9% per year and the higher 19.6% margin as evidence that recent profitability is not a one off, at least based on the latest data. On the other hand, the gap between the 60.5% trailing growth and the 8.5% expected pace highlights that the strongest numbers in this period may not be the baseline going forward.    Valuation gap vs US$10.95 share price  At a share price of US$10.95, Rithm is trading on a P/E of 7.8x versus a peer average of 12.3x and a mortgage REIT industry average of 12.1x. The DCF fair value used here is US$18.71, which is 41.5% above the current price. Supporters of the bullish angle see the low 7.8x P/E and the gap to the US$18.71 DCF fair value as a sign that the market is not giving full credit to the US$1.47 of trailing EPS and 19.6% margin, yet those same figures also need to be tested against the more modest 8.5% earnings growth outlook.\n     The contrast between a 41.5% discount to the DCF fair value and revenue growth forecasts roughly in line with the wider market shows how much weight that model is putting on cash flows relative to current sentiment. At the same time, a 7.8x P/E paired with 60.5% trailing earnings growth suggests the multiple is being anchored more by perceived risk and cyclicality than by the most recent growth rate alone.    Recent earnings and the valuation gap raise the question of whether the current price reflects the full story on Rithm’s growth, income profile, and risks, or if the market is leaving something on the table. 📊 Read the full Rithm Capital Consensus Narrative. Leverage and 9.13% dividend coverage risk  The company carries a major risk flag that debt is not well covered by operating cash flow and a minor risk that the 9.13% dividend yield is not supported by free cash flow, alongside reports of significant insider selling over the last three months. Critics who focus on the bearish side argue that weak cash flow coverage for both debt and dividends, even against US$777 million of trailing net income and a 19.6% margin, shows that headline profit does not automatically translate into easily serviceable obligations.\n     The 9.13% yield can look appealing next to US$1.47 of EPS, but the flag on free cash flow coverage suggests investors need to separate accounting profit from cash available for payouts. Significant insider selling over the past three months, when combined with leverage that is not well covered by operating cash flow, gives bears concrete figures to point to when they question the resilience of the current capital and payout structure.     Next Steps Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Rithm Capital's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move. See What Else Is Out There Rithm pairs a 9.13% dividend yield with weak cash flow coverage for both debt and payouts, along with recent insider selling that raises questions about balance sheet resilience. If that mix makes you uneasy, check out CTA_SCREENER_SOLID_BALANCE_SHEET to focus on companies with stronger cash coverage, lower leverage, and payout profiles that appear more robust.  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: AI Stock Screener & AlertsOur new AI Stock Screener scans the market every day to uncover opportunities.• Dividend Powerhouses (3%+ Yield)• Undervalued Small Caps with Insider Buying• High growth Tech and AI CompaniesOr build your own from over 50 metrics.Explore Now for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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