Great Ajax (NYSE:AJX) - Share price, News & Analysis

Q: What is the Fair Price of AJX when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

AJX ($10.13) is trading below our estimate of [[fair value]] ($14.86)

AJX fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	4/6
Past Performance	1/6
Financial Health	3/6
Dividends	3/6

AJX Stock Overview

Great Ajax Corp., real estate company, acquires, invests in, and manages a portfolio of residential mortgage and small balance commercial mortgage loans.

Rewards

Trading at 31.9% below our estimate of its fair value

Earnings are forecast to grow 31.57% per year

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 10.27% is not well covered by earnings

Profit margins (25.2%) are lower than last year (42.9%)

Great Ajax Competitors

Chicago Atlantic Real Estate Finance

NasdaqGM:REFI

US$270.3m

AFC Gamma

NasdaqGM:AFCG

US$347.3m

Seven Hills Realty Trust

NasdaqCM:SEVN

US$156.5m

NexPoint Real Estate Finance

NYSE:NREF

US$454.8m

Price History & Performance

Summary of all time highs, changes and price drops for Great Ajax
Historical stock prices
Current Share Price	US$10.13
52 Week High	US$14.74
52 Week Low	US$8.68
Beta	1.7
1 Month Change	3.16%
3 Month Change	7.65%
1 Year Change	-26.27%
3 Year Change	-27.64%
5 Year Change	-26.58%
Change since IPO	-25.11%

Recent News & Updates

Aug 04

Great Ajax raises dividend by 3.8% to $0.27/share

Great Ajax (NYSE:AJX) declares $0.27/share quarterly dividend, 3.8% increase from prior dividend of $0.26. Forward yield 9.96% Payable Aug. 31; for shareholders of record Aug. 15; ex-div Aug. 12. See AJX Dividend Scorecard, Yield Chart, & Dividend Growth.

Shareholder Returns

	AJX	US Mortgage REITs	US Market
7D	-8.1%	-3.1%	1.0%
1Y	-26.3%	-19.3%	-12.9%

Return vs Industry: AJX underperformed the US Mortgage REITs industry which returned -19.4% over the past year.

Return vs Market: AJX underperformed the US Market which returned -12.8% over the past year.

Price Volatility

Is AJX's price volatile compared to industry and market?
AJX volatility
AJX Average Weekly Movement	6.0%
Mortgage REITs Industry Average Movement	5.6%
Market Average Movement	7.9%
10% most volatile stocks in US Market	17.1%
10% least volatile stocks in US Market	3.2%

Stable Share Price: AJX is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: AJX's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2014	n/a	Larry Mendelsohn	https://www.greatajax.com

Great Ajax Corp., real estate company, acquires, invests in, and manages a portfolio of residential mortgage and small balance commercial mortgage loans. The company also holds real estate owned properties acquired upon the foreclosure or other settlement of its non-performing loans, as well as through outright purchases. In addition, it acquires and originates small balance commercial loans (SBC) secured by multi-family residential and commercial mixed-use retail/residential properties; and invests in single-family and smaller commercial properties through a foreclosure event of a loan or a direct acquisition.

Great Ajax Fundamentals Summary

How do Great Ajax's earnings and revenue compare to its market cap?
AJX fundamental statistics
Market Cap	US$234.85m
Earnings (TTM)	US$15.25m
Revenue (TTM)	US$60.55m

15.4x

P/E Ratio

3.9x

P/S Ratio

Is AJX overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
AJX income statement (TTM)
Revenue	US$60.55m
Cost of Revenue	US$8.21m
Gross Profit	US$52.34m
Other Expenses	US$37.09m
Earnings	US$15.25m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.66
Gross Margin	86.45%
Net Profit Margin	25.18%
Debt/Equity Ratio	262.1%

How did AJX perform over the long term?

See historical performance and comparison

Dividends

10.3%

Current Dividend Yield

67%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is AJX undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for AJX?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for AJX. This is calculated by dividing AJX's market cap by their current preferred multiple.
What is AJX's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$234.85m

AJX key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	0.5x

Price to Earnings Ratio vs Peers

How does AJX's PE Ratio compare to its peers?

AJX PE Ratio vs Peers

The above table shows the PE ratio for AJX vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	8x
REFI Chicago Atlantic Real Estate Finance	21.4x	51.6%	US$270.3m
AFCG AFC Gamma	11.7x	44.7%	US$347.3m
SEVN Seven Hills Realty Trust	4x	-13.0%	US$156.5m
NREF NexPoint Real Estate Finance	7.1x	18.3%	US$454.8m
AJX Great Ajax	15.4x	31.6%	US$234.9m

Price-To-Earnings vs Peers: AJX is expensive based on its Price-To-Earnings Ratio (15.4x) compared to the peer average (8x).

Price to Earnings Ratio vs Industry

How does AJX's PE Ratio compare vs other companies in the US Mortgage REITs Industry?

Price-To-Earnings vs Industry: AJX is expensive based on its Price-To-Earnings Ratio (15.4x) compared to the US Mortgage REITs industry average (12.7x)

Price to Earnings Ratio vs Fair Ratio

What is AJX's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

AJX PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	15.4x
Fair PE Ratio	15.6x

Price-To-Earnings vs Fair Ratio: AJX is good value based on its Price-To-Earnings Ratio (15.4x) compared to the estimated Fair Price-To-Earnings Ratio (15.6x).

Share Price vs Fair Value

What is the Fair Price of AJX when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: AJX ($10.13) is trading below our estimate of fair value ($14.86)

Significantly Below Fair Value: AJX is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Great Ajax forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

31.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: AJX's forecast earnings growth (31.6% per year) is above the savings rate (1.9%).

Earnings vs Market: AJX's earnings (31.6% per year) are forecast to grow faster than the US market (12.8% per year).

High Growth Earnings: AJX's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: AJX's revenue (8.8% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: AJX's revenue (8.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if AJX's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Great Ajax performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-1.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: AJX has high quality earnings.

Growing Profit Margin: AJX's current net profit margins (25.2%) are lower than last year (42.9%).

Past Earnings Growth Analysis

Earnings Trend: AJX's earnings have declined by 1% per year over the past 5 years.

Accelerating Growth: AJX's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AJX had negative earnings growth (-54.2%) over the past year, making it difficult to compare to the Mortgage REITs industry average (4.1%).

Return on Equity

High ROE: AJX's Return on Equity (4.8%) is considered low.

Discover strong past performing companies

Financial Health

How is Great Ajax's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: AJX's short term assets ($1.1B) exceed its short term liabilities ($541.2M).

Long Term Liabilities: AJX's short term assets ($1.1B) exceed its long term liabilities ($607.9M).

Debt to Equity History and Analysis

Debt Level: AJX's net debt to equity ratio (250.3%) is considered high.

Reducing Debt: AJX's debt to equity ratio has reduced from 290.8% to 262.1% over the past 5 years.

Debt Coverage: AJX's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: Insufficient data to determine if AJX's interest payments on its debt are well covered by EBIT.

Balance Sheet

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Dividend

What is Great Ajax current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

10.27%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: AJX's dividend (10.27%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: AJX's dividend (10.27%) is in the top 25% of dividend payers in the US market (4.09%)

Stability and Growth of Payments

Stable Dividend: AJX has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: AJX's dividend payments have increased, but the company has only paid a dividend for 7 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (67.5%), AJX's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: AJX is paying a dividend but the company has no free cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

8.6yrs

Average management tenure

CEO

Larry Mendelsohn (61 yo)

8.58yrs

Tenure

US$179,060

Compensation

Dr. Lawrence A. Mendelsohn, also known as Larry, Ph D., serves as the Chairman and Chief Executive Officer of Great Ajax Corp. since 2014. Dr. Mendelsohn founded Aspen Capital in 1995 and has been its Part...

Leadership Team

Experienced Management: AJX's management team is seasoned and experienced (8.6 years average tenure).

Board Members

Experienced Board: AJX's board of directors are considered experienced (7.9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/06 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31