Is Rithm Capital Corp. overvalued or undervalued?

As of 5 May 2021, Rithm Capital Corp. moved from a risky to a very attractive valuation grade, indicating a significant improvement in its investment appeal. The company appears undervalued, supported by a P/E ratio of 8, a Price to Book Value of 0.75, and an EV to EBITDA ratio of 1.43, which are notably lower than many peers in the realty sector. For instance, AGNC Investment Corp. has a P/E of 28.50, while Agree Realty Corp. stands at 41.08, highlighting Rithm's relative value.
In terms of performance, Rithm Capital Corp. has delivered a year-to-date return of 13.48%, slightly outperforming the S&P 500's return of 12.22%. However, over the longer term, the stock has lagged with a 5-year return of 51.54% compared to the S&P 500's 96.61%. Overall, the combination of attractive valuation ratios and the recent grade change suggests that Rithm Capital Corp. is a compelling investment opportunity.