Value
4.7/10data confidence 33%| Component | Sub-score |
|---|---|
| P/S | 5.8 |
| Analyst target | 4.0 |
NLY · Why this verdict
Why Annaly Capital Management (NLY) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Annaly Capital Management has delivered four consecutive earnings beats and strong 49% year-over-year growth, but its 89% Agency MBS concentration and current price above analyst consensus make the near-term risk-reward unfavorable for adding new exposure.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Approximately 89% of Annaly's portfolio is in Agency mortgage-backed securities, meaning its earnings and book value are highly sensitive to changes in interest rate spreads and Federal Reserve policy with limited diversification buffer. Bear case | Annaly reduces its Agency MBS concentration below 85% or maintains net interest margin above 2.0% over the next 12 months as rates evolve. | →Stable |
| CounterAgency MBS carry an implicit government guarantee, so concentration in this asset class is substantially lower risk than comparable fixed-income alternatives at similar yield levels. | ||
Annaly has beaten earnings estimates in all 4 of the last 4 quarters, with each beat in a narrow range suggesting management has strong visibility into its net interest income and hedging performance. Earnings | Annaly continues beating earnings estimates in at least 3 of the next 4 quarters, maintaining its track record of consistent delivery. | →Stable |
| CounterAverage EPS surprises are only about 1.9%, which is barely above analyst estimates and may reflect conservative guidance rather than genuine operational strength. | ||
Revenue growth of approximately 49% year-over-year places Annaly among the strongest growers in its sector, reflecting either favorable rate positioning or portfolio expansion that has meaningfully increased earnings power. Growth breakdown | Revenue growth remains above 20% year-over-year for at least 2 of the next 4 quarters. | →Stable |
| CounterMortgage REIT revenue can be volatile and driven by spread dynamics that can reverse quickly if the yield curve flattens or inverts again. | ||
The current price of $22.24 has already reached or exceeded the analyst consensus price target, leaving virtually no upside in analyst models and a negative risk-reward ratio at current levels. Warnings | Analyst consensus price target is revised upward by at least 10% within 6 months, restoring meaningful headroom above the current price. | →Stable |
| CounterAnalyst targets for mortgage REITs often lag market moves, and the technical breakout pattern with a golden cross and RSI of 59 suggests momentum could carry the stock higher. | ||
Approximately 89% of Annaly's portfolio is in Agency mortgage-backed securities, meaning its earnings and book value are highly sensitive to changes in interest rate spreads and Federal Reserve policy with limited diversification buffer.
→StableBear case
- Expectation
- Annaly reduces its Agency MBS concentration below 85% or maintains net interest margin above 2.0% over the next 12 months as rates evolve.
CounterAgency MBS carry an implicit government guarantee, so concentration in this asset class is substantially lower risk than comparable fixed-income alternatives at similar yield levels.
Annaly has beaten earnings estimates in all 4 of the last 4 quarters, with each beat in a narrow range suggesting management has strong visibility into its net interest income and hedging performance.
→StableEarnings
- Expectation
- Annaly continues beating earnings estimates in at least 3 of the next 4 quarters, maintaining its track record of consistent delivery.
CounterAverage EPS surprises are only about 1.9%, which is barely above analyst estimates and may reflect conservative guidance rather than genuine operational strength.
Revenue growth of approximately 49% year-over-year places Annaly among the strongest growers in its sector, reflecting either favorable rate positioning or portfolio expansion that has meaningfully increased earnings power.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 20% year-over-year for at least 2 of the next 4 quarters.
CounterMortgage REIT revenue can be volatile and driven by spread dynamics that can reverse quickly if the yield curve flattens or inverts again.
The current price of $22.24 has already reached or exceeded the analyst consensus price target, leaving virtually no upside in analyst models and a negative risk-reward ratio at current levels.
→StableWarnings
- Expectation
- Analyst consensus price target is revised upward by at least 10% within 6 months, restoring meaningful headroom above the current price.
CounterAnalyst targets for mortgage REITs often lag market moves, and the technical breakout pattern with a golden cross and RSI of 59 suggests momentum could carry the stock higher.
Per-dimension breakdown
Quality
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.0 |
| ROA | 1.2 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 2.1 |
| Moat | 6.9 |
| Piotroski F | 4.4 |
- ▸Strong margins: 87%
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 49% YoY
Momentum
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 8.3 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.0 |
| Price target | 6.2 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $1,515,752 (0.009% of mkt cap)
Peer rank
6.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.2 |
| quality rank | 8.5 |
| growth rank | 7.3 |
- ▸Superior ROE vs peers
Technical
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.8 |
| support resistance | 1.0 |
| 52w position | 8.9 |
Risk (lower is worse)
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| volatility | 7.8 |
| put call | 0.0 |
| implied vol | 2.2 |
| beta | 6.0 |
| debt equity | 0.0 |
- ▸Elevated put/call: 2.13
- ▸High IV: 67%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.4 |
| dividend safety | 3.5 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:6.5>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:27d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.9=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.87
Upside
-6.1%
Downside
7.0%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 67, MACD bullish
EdgeCATALYST — Earnings in 27d with 4/4 beat streak
SuitabilityMODERATE — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.5>=5.5. Top dim: Growth at 10.0; weakest: Technical at 3.9. No conviction either direction.
The strongest dimensions are Growth at 10.0, Momentum at 6.5, and Peer rank at 6.5; the weakest are Technical at 3.9, Risk (lower is worse) at 4.3, and Value at 4.7. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.87 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Approximately 89% of Annaly's portfolio is in Agency mortgage-backed securities, meaning its earnings and book value are highly sensitive to changes in interest rate spreads and Federal Reserve policy with limited diversification buffer.
Trip ifAgency MBS portfolio concentration rises above 92% while net interest margin falls below 1.5%.
- P2Annaly has beaten earnings estimates in all 4 of the last 4 quarters, with each beat in a narrow range suggesting management has strong visibility into its net interest income and hedging performance.
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 quarters.
- P3Revenue growth of approximately 49% year-over-year places Annaly among the strongest growers in its sector, reflecting either favorable rate positioning or portfolio expansion that has meaningfully increased earnings power.
Trip ifRevenue growth declines below 10% year-over-year for 2 consecutive quarters.
- P4The current price of $22.24 has already reached or exceeded the analyst consensus price target, leaving virtually no upside in analyst models and a negative risk-reward ratio at current levels.
Trip ifPrice rises above $24 while analyst consensus target remains below $23, widening the gap to more than $1.