Annaly Capital Management has delivered a 82.8% share price gain over the past three years, even as more recent returns have cooled, which puts fresh focus on whether that run lines up with the returns the business earns on its capital. With the stock now around US$18.34 after a weaker year to date, investors are asking if the current valuation is still supported by the way Annaly deploys and reinvests its equity base.
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A 82.8% move over three years means long term holders have meaningful gains at stake. The question is whether those past rewards are backed by durable returns on capital or mostly by shifting sentiment around the mortgage REIT sector.
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Recent results included a reported loss of about US$1b alongside continued dividend payments and portfolio adjustments, which can influence how efficiently Annaly converts its capital into income in a higher rate world.
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What if you looked at Annaly Capital Management through its earnings instead? See what Annaly Capital Management's 15.1x P/E says about the price .
The issue now is whether Annaly Capital Management's current share price is properly aligned with the returns it earns on the capital entrusted to it.
If you are weighing whether Annaly Capital Management's 82.8% three year gain is well supported by the returns it earns on its capital, it can help to compare with 29 high quality undervalued stocks .
Is Annaly Capital Management a Bargain on Excess Returns?
The Excess Returns model looks at how effectively Annaly Capital Management turns its equity base into earnings above the cost of that capital. On this view, the business is modeled with a Book Value of $17.86 per share and a Stable EPS of $3.17 per share, both anchored in estimates from five analysts. The implied Cost of Equity is $2.38 per share, so the Excess Return of $0.80 per share suggests the firm is expected to earn more on its equity than investors are modeled to require over the long run.
An average Return on Equity of 16.75% and a Stable Book Value projection of $18.95 per share underpin why the Excess Returns approach places Annaly Capital Management's estimated intrinsic value substantially above the current share price of $18.34. The recent Q3 2026 loss of about $1b, alongside continued dividends and portfolio moves, helps explain why the price may still lag the earnings power implied by these excess returns. Readers who want to see how that gap is quantified can check the detailed Excess Returns workup and compare it directly with the current share price. Find out what Annaly Capital Management could be worth using our Excess Returns estimate .
The Annaly Capital Management Narrative: What Would Justify Today's Price?
Narratives for Annaly Capital Management pick up where the valuation puzzle leaves off, spelling out which future paths for growth, margins and earnings would need to hold for the shares to trade materially higher or lower than today. Instead of relying on a single multiple or model line, each scenario lays out the key drivers behind its implied value so you can compare those assumptions with Annaly Capital Management's reported numbers as they come through. Narratives are available on Simply Wall St's Community page.
One of the top community narratives on Annaly Capital Management: 24% undervalued
"Improved financing costs and economic leverage, along with $400 million in accretive common equity raised, have set the stage for increased earnings..."
Discover why this Narrative puts Annaly Capital Management at 24% undervalued .
One more Annaly Capital Management check that belongs beside the share price
The missing piece is who is steering Annaly Capital Management and how their pay packets line up with your interests, because the structure of those incentives can shape what happens next. See who runs Annaly Capital Management and how they are paid .
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 NLY .
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