Adamas Trust came into this Q3 2026 earnings release already under pressure, with the share price down over the past quarter and then dropping a further 8.9% to US$6.54 on the latest trading day. The stock traded as if the story had broken, yet the headline was different. Earnings available for distribution, the real lifeblood for a mortgage REIT, covered the quarterly dividend at US$0.30 per share, even as adjusted book value per share slid and a US$171 million loss was reported under generally accepted accounting principles. That gap between income stability and bruised book value is what the market is now trying to price.
Love that Adamas Trust still covered its dividend but worried about the hit to book value and the GAAP loss reported this quarter? Compare that income profile with other real estate finance plays in our list of solid balance sheet and fundamentals stocks (24 results)
Q3 2026 Earnings Summary
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Revenue (Q3 2026 vs. Q3 2025):Total revenue loss of US$116.4 million vs. revenue of US$93.1 million (swing from profit to loss in the top line).
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Net Income (Q3 2026 vs. Q3 2025):Net loss of US$171.0 million vs. net income of US$32.7 million (sharp move into loss).
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Basic EPS (Q3 2026 vs. Q3 2025):Loss of US$1.89 per share vs. earnings of US$0.36 per share (earnings per share turned deeply negative).
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Earnings Available for Distribution, EAD (Q3 2026 vs. Q3 2025):EAD of US$0.30 per share, up 25% year on year and covering the US$0.30 quarterly dividend.
Book value sank, but management called it a rare entry point. Ask Charlie what makes Adamas Trust so bullish after a 20% hit .
Adamas Trust Bull Case Faces Mixed Scorecard
The bullish story rests on Adamas Trust turning origination control and funding access into stronger, steadier earnings power.
"Improved liquidity, lower financing costs, and scalable origination capability support margin expansion, efficient capital deployment, and long-term earnings growth."
Liquidity looks stronger, with available cash up to US$259 million and total excess capacity of US$447 million. Constructive originated US$406 million, with Adamas retaining 57% and pushing roughly 98% of BPL rental exposure into non recourse funding, which supports the margin argument. EAD of US$0.30 per share fully covering the dividend for a seventh straight quarter points to earnings resilience, although the US$171 million GAAP loss keeps the growth piece of this claim unproven for now.
Adamas Trust Bear Case Gets Fresh Ammunition
On the risk side, critics focus on leverage and book value vulnerability in a stressed rate backdrop.
"Elevated and increasing leverage, evidenced by the rise in recourse leverage ratios to fund Agency RMBS acquisitions and the bond amendment allowing leverage up to 8x, exposes NYMT to refinancing, interest rate, and liquidity risks in volatile market environments, potentially eroding net interest margins, book value, or causing forced asset sales during adverse conditions."
Economic recourse leverage now sits at 4.8x, down from 8.3x earlier, so management pulled back when volatility spiked. That said, adjusted book value slid about 19.6% to US$8.88 per share in one quarter and GAAP book value is US$7.93, both hit mainly by agency marks. The TBA hedge added US$0.29 per share of protection, yet the share price still fell about 8.9% on the print, which suggests investors are treating the book value shock as more than a theoretical risk.
One Narrative disagrees with today's price. → See where this Narrative says Adamas Trust should trade .
Hunt For Mispriced Cash Flows
Adamas Trust just showed how earnings strength can sit alongside a sharp hit to book value. The real opportunity is finding stocks that could be undervalued before the market corrects them.
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Company 1 - 42% below our estimate - builds an aviation aftermarket platform that incorporates a large acquisition to deepen engine and component services.
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Company 2 - 30% below our estimate - turns an entrenched productivity and cloud ecosystem into an AI layer embedded directly into enterprise workflows.
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Company 3 - 38% below our estimate - scales a device recommerce platform as policy-backed trade in programs steer more consumers toward refurbished electronics.
That is three of the list. See all 33 potentially undervalued companies →
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ADAM .
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