Is Ready Capital Corp. overvalued or undervalued?

Jun 25 2025 09:12 AM IST
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As of August 7, 2024, Ready Capital Corp. is considered overvalued and risky, with a negative return on equity of -18.81%, a year-to-date decline of 34.02%, and financial metrics such as a Price to Book Value of 0.38 and an EV to EBITDA ratio of 1.28, indicating poor performance compared to its peers.
As of 7 August 2024, Ready Capital Corp. has moved from a very attractive to a risky valuation grade. The company appears to be overvalued given its current financial metrics. The Price to Book Value stands at 0.38, while the EV to EBITDA ratio is 1.28, and the EV to Sales ratio is 0.59, indicating that the company is not generating sufficient earnings relative to its valuation.

In comparison to its peers, Ready Capital Corp. shows a significant disparity, with a peer comp exhibiting an EV to EBITDA ratio of 1.31, which suggests that the market is valuing similar companies more favorably. Additionally, the company's return on equity (ROE) is notably negative at -18.81%, further emphasizing its financial struggles. Despite a high dividend yield of 21.62%, the overall performance has been poor, with a year-to-date decline of 34.02% compared to a modest 2.44% gain in the S&P 500. This reinforces the notion that Ready Capital Corp. is currently overvalued.
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