Value
4.4/10data confidence 33%| Component | Sub-score |
|---|---|
| P/S | 3.5 |
| Analyst target | 5.0 |
NLY · Why this verdict
Why Annaly Capital Management (NLY) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score6.0/10
ConfidenceMEDIUM
MacroRISK_OFF
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. | ↑Improving |
| 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. | ↓Deteriorating |
| 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. | ↑Improving |
| 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. | ↑Improving |
| 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.
↑ImprovingBear 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.
↓DeterioratingEarnings
- 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.
↑ImprovingGrowth 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.
↑ImprovingWarnings
- 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
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.5 |
| ROA | 0.6 |
| Gross margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.0 |
| Moat | 5.4 |
| Piotroski F | 7.8 |
- ▸Strong margins: 80%
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| EPS growth | 10.0 |
Momentum
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 8.8 |
| OBV | 1.0 |
| MA position | 4.5 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.0 |
| Price target | 7.3 |
| erm sentiment | 5.0 |
Insider
5.5/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.0 |
- ▸Insider selling (low materiality) — $1,144,500 (0.008% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.3 |
| quality rank | 7.9 |
| growth rank | 5.0 |
- ▸Best-in-class margins
Technical
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.9 |
| support resistance | 4.9 |
| 52w position | 6.0 |
Risk (lower is worse)
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| days to cover | 10.0 |
| volatility | 6.7 |
| put call | 10.0 |
| implied vol | 5.6 |
| max pain risk | 7.0 |
| beta | 5.9 |
| debt equity | 0.0 |
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.1 |
| dividend safety | 7.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 16.4%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:90d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.8<4.5
- ASYMMETRY:0.3<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
0.33
Upside
+1.7%
Downside
5.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 52
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 10.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.8<4.5, ASYMMETRY:0.3<1.5@spot, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 0.33 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 10.0, Risk (lower is worse) at 6.9, and Sentiment at 6.6; the weakest are Momentum at 3.8, Value at 4.4, and Technical at 4.6. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 0.33 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Agency Mbs Concentration
Trip ifAgency MBS portfolio concentration rises above 92% while net interest margin falls below 1.5%.
- P2Four Quarter Earnings Beat Streak
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 quarters.
- P3Strong Revenue Growth
Trip ifRevenue growth declines below 10% year-over-year for 2 consecutive quarters.
- P4Price Above Analyst Target
Trip ifPrice rises above $24 while analyst consensus target remains below $23, widening the gap to more than $1.