Should You Investigate New York Mortgage Trust, Inc. (NASDAQ:NYMT) At US$6.00?

New York Mortgage Trust, Inc. (NASDAQ:NYMT), which is in the mortgage reits business, and is based in United States, saw significant share price movement during recent months on the NASDAQGS, rising to highs of $6.35 and falling to the lows of $5.62. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether New York Mortgage Trust’s current trading price of $6 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at New York Mortgage Trust’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for New York Mortgage Trust

What is New York Mortgage Trust worth?

According to my relative valuation model, the stock seems to be currently fairly priced. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that New York Mortgage Trust’s ratio of 9.64x is trading slightly below its industry peers’ ratio of 10.72x, which means if you buy New York Mortgage Trust today, you’d be paying a reasonable price for it. And if you believe that New York Mortgage Trust should be trading at this level in the long run, then there’s not much of an upside to gain from mispricing. Furthermore, it seems like New York Mortgage Trust’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.

What does the future of New York Mortgage Trust look like?

NasdaqGS:NYMT Past and Future Earnings, February 28th 2019
NasdaqGS:NYMT Past and Future Earnings, February 28th 2019
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to grow by 23% over the next couple of years, the future seems bright for New York Mortgage Trust. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? NYMT’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at NYMT? Will you have enough conviction to buy should the price fluctuate below the true value?

Are you a potential investor? If you’ve been keeping an eye on NYMT, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic forecast is encouraging for NYMT, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on New York Mortgage Trust. You can find everything you need to know about New York Mortgage Trust in the latest infographic research report. If you are no longer interested in New York Mortgage Trust, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.