Intrinsic value of New York Mortgage Trust - NYMT

Previous Close

$6.25

  Intrinsic Value

$3.56

stock screener

  Rating & Target

sell

-43%

  Value-price divergence*

0%

Previous close

$6.25

 
Intrinsic value

$3.56

 
Up/down potential

-43%

 
Rating

sell

 
Value-price divergence*

0%

Our model is not good at valuating stocks of financial companies, such as NYMT.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of NYMT stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -6.01
  5.60
  5.54
  5.49
  5.44
  5.39
  5.35
  5.32
  5.29
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.07
  5.06
  5.05
  5.05
  5.04
  5.04
  5.03
  5.03
  5.03
Revenue, $m
  360
  380
  401
  423
  446
  470
  495
  522
  549
  578
  609
  640
  674
  708
  745
  783
  823
  865
  909
  956
  1,004
  1,055
  1,109
  1,165
  1,224
  1,285
  1,350
  1,418
  1,490
  1,565
  1,643
Variable operating expenses, $m
 
  182
  191
  202
  213
  224
  236
  248
  261
  275
  289
  302
  317
  334
  351
  369
  388
  408
  428
  450
  473
  497
  522
  549
  576
  605
  636
  668
  702
  737
  774
Fixed operating expenses, $m
 
  123
  126
  129
  132
  136
  139
  143
  146
  150
  154
  157
  161
  165
  170
  174
  178
  183
  187
  192
  197
  202
  207
  212
  217
  222
  228
  234
  240
  246
  252
Total operating expenses, $m
  289
  305
  317
  331
  345
  360
  375
  391
  407
  425
  443
  459
  478
  499
  521
  543
  566
  591
  615
  642
  670
  699
  729
  761
  793
  827
  864
  902
  942
  983
  1,026
Operating income, $m
  71
  76
  84
  92
  101
  111
  120
  131
  142
  154
  166
  181
  195
  209
  224
  240
  257
  275
  294
  314
  335
  357
  380
  404
  430
  457
  486
  516
  548
  582
  617
EBITDA, $m
  71
  78
  86
  95
  104
  113
  123
  133
  144
  156
  168
  181
  195
  209
  224
  240
  257
  275
  294
  314
  335
  357
  380
  404
  430
  457
  486
  516
  548
  582
  617
Interest expense (income), $m
  301
  300
  317
  335
  354
  373
  394
  415
  438
  461
  486
  512
  539
  568
  597
  629
  661
  696
  732
  769
  809
  850
  894
  940
  988
  1,038
  1,091
  1,146
  1,204
  1,265
  1,329
Earnings before tax, $m
  71
  -224
  -233
  -243
  -252
  -263
  -273
  -284
  -296
  -308
  -320
  -331
  -344
  -358
  -373
  -388
  -404
  -420
  -438
  -456
  -474
  -494
  -514
  -535
  -557
  -580
  -605
  -630
  -656
  -683
  -712
Tax expense, $m
  3
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  68
  -224
  -233
  -243
  -252
  -263
  -273
  -284
  -296
  -308
  -320
  -331
  -344
  -358
  -373
  -388
  -404
  -420
  -438
  -456
  -474
  -494
  -514
  -535
  -557
  -580
  -605
  -630
  -656
  -683
  -712

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  84
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  8,952
  9,504
  10,031
  10,581
  11,156
  11,758
  12,387
  13,046
  13,736
  14,458
  15,215
  16,007
  16,838
  17,708
  18,621
  19,577
  20,580
  21,632
  22,736
  23,893
  25,107
  26,380
  27,717
  29,119
  30,590
  32,135
  33,755
  35,456
  37,241
  39,115
  41,082
Adjusted assets (=assets-cash), $m
  8,868
  9,504
  10,031
  10,581
  11,156
  11,758
  12,387
  13,046
  13,736
  14,458
  15,215
  16,007
  16,838
  17,708
  18,621
  19,577
  20,580
  21,632
  22,736
  23,893
  25,107
  26,380
  27,717
  29,119
  30,590
  32,135
  33,755
  35,456
  37,241
  39,115
  41,082
Revenue / Adjusted assets
  0.041
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
  0.040
Average production assets, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Working capital, $m
  0
  -38
  -40
  -42
  -45
  -47
  -50
  -52
  -55
  -58
  -61
  -64
  -67
  -71
  -74
  -78
  -82
  -87
  -91
  -96
  -100
  -106
  -111
  -116
  -122
  -129
  -135
  -142
  -149
  -156
  -164
Total debt, $m
  7,886
  8,336
  8,809
  9,305
  9,823
  10,364
  10,931
  11,524
  12,144
  12,794
  13,475
  14,189
  14,936
  15,719
  16,541
  17,402
  18,304
  19,251
  20,244
  21,286
  22,378
  23,524
  24,727
  25,989
  27,313
  28,703
  30,162
  31,692
  33,299
  34,985
  36,756
Total liabilities, $m
  8,104
  8,554
  9,027
  9,523
  10,041
  10,582
  11,149
  11,742
  12,362
  13,012
  13,693
  14,407
  15,154
  15,937
  16,759
  17,620
  18,522
  19,469
  20,462
  21,504
  22,596
  23,742
  24,945
  26,207
  27,531
  28,921
  30,380
  31,910
  33,517
  35,203
  36,974
Total equity, $m
  848
  950
  1,003
  1,058
  1,116
  1,176
  1,239
  1,305
  1,374
  1,446
  1,521
  1,601
  1,684
  1,771
  1,862
  1,958
  2,058
  2,163
  2,274
  2,389
  2,511
  2,638
  2,772
  2,912
  3,059
  3,213
  3,376
  3,546
  3,724
  3,911
  4,108
Total liabilities and equity, $m
  8,952
  9,504
  10,030
  10,581
  11,157
  11,758
  12,388
  13,047
  13,736
  14,458
  15,214
  16,008
  16,838
  17,708
  18,621
  19,578
  20,580
  21,632
  22,736
  23,893
  25,107
  26,380
  27,717
  29,119
  30,590
  32,134
  33,756
  35,456
  37,241
  39,114
  41,082
Debt-to-equity ratio
  9.300
  8.770
  8.780
  8.790
  8.800
  8.810
  8.820
  8.830
  8.840
  8.850
  8.860
  8.860
  8.870
  8.880
  8.880
  8.890
  8.890
  8.900
  8.900
  8.910
  8.910
  8.920
  8.920
  8.930
  8.930
  8.930
  8.940
  8.940
  8.940
  8.940
  8.950
Adjusted equity ratio
  0.086
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  68
  -224
  -233
  -243
  -252
  -263
  -273
  -284
  -296
  -308
  -320
  -331
  -344
  -358
  -373
  -388
  -404
  -420
  -438
  -456
  -474
  -494
  -514
  -535
  -557
  -580
  -605
  -630
  -656
  -683
  -712
Depreciation, amort., depletion, $m
  0
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Funds from operations, $m
  43
  -222
  -231
  -240
  -250
  -260
  -271
  -282
  -293
  -305
  -318
  -331
  -344
  -358
  -373
  -388
  -404
  -420
  -438
  -456
  -474
  -494
  -514
  -535
  -557
  -580
  -605
  -630
  -656
  -683
  -712
Change in working capital, $m
  -11
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
Cash from operations, $m
  54
  -220
  -228
  -238
  -248
  -258
  -268
  -279
  -291
  -303
  -315
  -328
  -341
  -355
  -369
  -384
  -400
  -416
  -433
  -451
  -469
  -489
  -509
  -530
  -552
  -574
  -598
  -623
  -649
  -676
  -704
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
New CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from investing activities, $m
  34
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Free cash flow, $m
  88
  -220
  -228
  -238
  -248
  -258
  -268
  -279
  -291
  -303
  -315
  -328
  -341
  -355
  -369
  -384
  -400
  -416
  -433
  -451
  -469
  -489
  -509
  -530
  -552
  -574
  -598
  -623
  -649
  -676
  -704
Issuance/(repayment) of debt, $m
  -137
  450
  474
  495
  518
  542
  567
  593
  621
  650
  681
  713
  747
  783
  821
  861
  903
  947
  993
  1,042
  1,093
  1,146
  1,203
  1,262
  1,324
  1,390
  1,459
  1,531
  1,607
  1,686
  1,770
Issuance/(repurchase) of shares, $m
  14
  326
  286
  298
  310
  323
  336
  350
  365
  380
  396
  410
  427
  445
  464
  484
  504
  526
  548
  571
  596
  621
  648
  676
  705
  735
  767
  800
  834
  871
  909
Cash from financing (excl. dividends), $m  
  52
  776
  760
  793
  828
  865
  903
  943
  986
  1,030
  1,077
  1,123
  1,174
  1,228
  1,285
  1,345
  1,407
  1,473
  1,541
  1,613
  1,689
  1,767
  1,851
  1,938
  2,029
  2,125
  2,226
  2,331
  2,441
  2,557
  2,679
Total cash flow (excl. dividends), $m
  140
  557
  531
  555
  580
  607
  635
  664
  695
  728
  762
  796
  834
  874
  916
  960
  1,007
  1,056
  1,108
  1,162
  1,219
  1,279
  1,342
  1,408
  1,477
  1,550
  1,627
  1,708
  1,792
  1,881
  1,975
Retained Cash Flow (-), $m
  33
  -326
  -286
  -298
  -310
  -323
  -336
  -350
  -365
  -380
  -396
  -410
  -427
  -445
  -464
  -484
  -504
  -526
  -548
  -571
  -596
  -621
  -648
  -676
  -705
  -735
  -767
  -800
  -834
  -871
  -909
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  230
  245
  257
  270
  284
  298
  314
  330
  347
  366
  386
  406
  429
  452
  477
  503
  530
  560
  591
  623
  658
  694
  732
  773
  815
  860
  908
  958
  1,011
  1,066
Discount rate, %
 
  14.40
  15.12
  15.88
  16.67
  17.50
  18.38
  19.30
  20.26
  21.28
  22.34
  23.46
  24.63
  25.86
  27.15
  28.51
  29.94
  31.43
  33.01
  34.66
  36.39
  38.21
  40.12
  42.12
  44.23
  46.44
  48.76
  51.20
  53.76
  56.45
  59.27
PV of cash for distribution, $m
 
  201
  185
  165
  146
  127
  108
  91
  75
  61
  49
  38
  29
  22
  16
  11
  8
  5
  3
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  68.0
  49.7
  36.4
  26.8
  19.8
  14.7
  10.9
  8.1
  6.1
  4.5
  3.4
  2.6
  1.9
  1.5
  1.1
  0.8
  0.6
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0

New York Mortgage Trust, Inc., a real estate investment trust (REIT), engages in acquiring, investing in, financing, and managing mortgage-related and financial assets in the United States. It primarily invests in residential mortgage-backed securities comprising adjustable-rate, hybrid adjustable-rate, fixed-rate, interest only and inverse interest only, and principal only mortgage-backed securities; multi family commercial mortgage-backed securities; and residential mortgage loans, including loans sourced from distressed markets. The company qualifies as a REIT for federal income tax purposes. It generally would not be subject to federal income tax on that portion of its income if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 1989 and is headquartered in New York, New York.

FINANCIAL RATIOS  of  New York Mortgage Trust (NYMT)

Valuation Ratios
P/E Ratio 10.2
Price to Sales 1.9
Price to Book 0.8
Price to Tangible Book
Price to Cash Flow 12.9
Price to Free Cash Flow 12.9
Growth Rates
Sales Growth Rate -6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 930%
Total Debt to Equity 930%
Interest Coverage 1
Management Effectiveness
Return On Assets 4%
Ret/ On Assets - 3 Yr. Avg. 4.1%
Return On Total Capital 0.8%
Ret/ On T. Cap. - 3 Yr. Avg. 1%
Return On Equity 7.9%
Return On Equity - 3 Yr. Avg. 12.7%
Asset Turnover 0
Profitability Ratios
Gross Margin 26.7%
Gross Margin - 3 Yr. Avg. 29%
EBITDA Margin 103.3%
EBITDA Margin - 3 Yr. Avg. 102.1%
Operating Margin 19.7%
Oper. Margin - 3 Yr. Avg. 23.5%
Pre-Tax Margin 19.7%
Pre-Tax Margin - 3 Yr. Avg. 23.5%
Net Profit Margin 18.9%
Net Profit Margin - 3 Yr. Avg. 22.4%
Effective Tax Rate 4.2%
Eff/ Tax Rate - 3 Yr. Avg. 5%
Payout Ratio 173.5%

NYMT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NYMT stock intrinsic value calculation we used $360 million for the last fiscal year's total revenue generated by New York Mortgage Trust. The default revenue input number comes from 2016 income statement of New York Mortgage Trust. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NYMT stock valuation model: a) initial revenue growth rate of 5.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 14.4%, whose default value for NYMT is calculated based on our internal credit rating of New York Mortgage Trust, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of New York Mortgage Trust.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NYMT stock the variable cost ratio is equal to 47.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $120 million in the base year in the intrinsic value calculation for NYMT stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.8% for New York Mortgage Trust.

Corporate tax rate of 27% is the nominal tax rate for New York Mortgage Trust. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NYMT stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NYMT are equal to 0%.

Life of production assets of 10 years is the average useful life of capital assets used in New York Mortgage Trust operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NYMT is equal to -10%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $848 million for New York Mortgage Trust - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 110.775 million for New York Mortgage Trust is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of New York Mortgage Trust at the current share price and the inputted number of shares is $0.7 billion.

RELATED COMPANIES Price Int.Val. Rating
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AGM Federal Agricu 66.40 192.06  str.buy
LC LendingClub 5.96 0.62  str.sell

COMPANY NEWS

▶ New York Mortgage Trust Reports Second Quarter 2017 Results   [Aug-03-17 04:01PM  GlobeNewswire]
▶ New York Mortgage Trust posts 1Q profit   [May-03-17 05:46PM  Associated Press]
▶ How Novadaq Technologies Inc. (NVDQ) Stacks Up Against Its Peers   [Dec-12-16 08:17PM  at Insider Monkey]
▶ Is Nimble Storage Inc (NMBL) A Good Stock To Buy?   [Nov-28-16 10:37PM  at Insider Monkey]
▶ New York Mortgage Trust Trades Ex-Dividend (NYMT)   [Jun-23-16 11:36AM  at Investopedia]
Stock chart of NYMT Financial statements of NYMT
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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