Two Harbors Investment Corp.
Two Harbors Investment Corp. Fundamental Analysis
Two Harbors Investment Corp. (TWO-PA) shows weak financial fundamentals with a PE ratio of -4.00, profit margin of -44.82%, and ROE of -19.11%. The company generates $0.7B in annual revenue with weak year-over-year growth of -28.40%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of -81.6/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze TWO-PA's fundamental strength across five key dimensions:
Efficiency Score
WeakTWO-PA struggles to generate sufficient returns from assets.
Valuation Score
ExcellentTWO-PA trades at attractive valuation levels.
Growth Score
WeakTWO-PA faces weak or negative growth trends.
Financial Health Score
WeakTWO-PA carries high financial risk with limited liquidity.
Profitability Score
WeakTWO-PA struggles to sustain strong margins.
Key Financial Metrics
Is TWO-PA Expensive or Cheap?
P/E Ratio
TWO-PA trades at -4.00 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, TWO-PA's PEG of -0.15 indicates potential undervaluation.
Price to Book
The market values Two Harbors Investment Corp. at 0.79 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -92.64 times EBITDA. This is generally considered low.
How Well Does TWO-PA Make Money?
Net Profit Margin
For every $100 in sales, Two Harbors Investment Corp. keeps $-44.82 as profit after all expenses.
Operating Margin
Core operations generate 57.27 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-19.11 in profit for every $100 of shareholder equity.
ROA
Two Harbors Investment Corp. generates $-3.26 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Two Harbors Investment Corp. generates limited operating cash flow of $32.38M, signaling weaker underlying cash strength.
Free Cash Flow
Two Harbors Investment Corp. generates weak or negative free cash flow of $-67.37M, restricting financial flexibility.
FCF Per Share
Each share generates $-0.65 in free cash annually.
FCF Yield
TWO-PA converts -5.25% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
-4.00
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.15
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.79
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.74
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
4.79
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.09
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.19
vs 25 benchmark
ROA
Return on assets percentage
-0.03
vs 25 benchmark
ROCE
Return on capital employed
0.22
vs 25 benchmark
How TWO-PA Stacks Against Its Sector Peers
| Metric | TWO-PA Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | -4.00 | 23.41 | Better (Cheaper) |
| ROE | -19.11% | 666.00% | Weak |
| Net Margin | -44.82% | -37342.00% (disorted) | Weak |
| Debt/Equity | 4.79 | -20.97 (disorted) | Distorted |
| Current Ratio | 0.09 | 21.32 | Weak Liquidity |
| ROA | -3.26% | -928.00% (disorted) | Weak |
TWO-PA outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Two Harbors Investment Corp.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
146.11%
Industry Style: Income, Inflation Hedge, REIT
High GrowthEPS CAGR
81.70%
Industry Style: Income, Inflation Hedge, REIT
High GrowthFCF CAGR
-90.76%
Industry Style: Income, Inflation Hedge, REIT
Declining