Adamas Trust, Inc.

▲ Bull Case

• ◆NIM expansion through the credit-asset rotation continues: The portfolio is shifting from 42% agency (5.0–5.5% yield) toward 50%+ credit (7.5–10.5% yield). If blended yield reaches 6.0%+ and Fed cuts 2 more times reducing repo to 4.0%, NIM moves from 1.4% (Q1 2025) to 2.6–3.1% — translating to FY2026E EAD/share of $1.10–$1.50 vs. $0.80 current dividend.
• ◆Internal management premium gets recognized: NYMT is the only internally managed name in its hybrid-mREIT peer group. At sub-$1B market cap, ~$15–25M/yr in fee savings = 2.3–3.9% of market cap annually — a structural advantage. P/Book re-rates to 0.95x (matching NLY/AGNC) → +18% multiple expansion.
• ◆Dividend raise cycle restarts: After 5+ quarters of $0.20 dividend post-cut, sustained EAD coverage at 1.2x+ for 3 consecutive quarters opens the door to a dividend raise to $0.225–0.25/qtr. mREIT dividend raises are a strong stock-price catalyst for income investors.

▼ Bear Case

• ◆Interest rate spike restarts BV destruction: NYMT's ~$4.2B agency RMBS portfolio carries 5–7 year duration. A 10-year Treasury move from 4.2% → 5.2% generates ~$180–250M mark-to-market loss → BVPS drops $2.00–2.75 to ~$6.50–7.00. This is the dominant single risk dwarfing every other variable.
• ◆Third dividend cut is one bad quarter away: Q1 2025 EAD coverage was 1.0x — zero buffer. Any combination of NIM compression, credit losses, or one-time expenses pushes EAD below $0.20. Two prior cuts destroyed credibility; a third would crater P/Book to 0.65x and force 30%+ stock drawdown.
• ◆Minimal moat in commodity financial intermediation: Internal management is real-but-modest cost advantage (1.5/5 moat rating). NYMT has no funding-cost advantage, no scale advantage, no proprietary asset access. Returns are competed away by capital flows. The 0.75–0.80x P/Book discount is structurally appropriate.

“The Street debate is not whether NYMT is recovering — that's broadly accepted post-Q1 2025 — but whether the recovery sticks. Bulls (67% of n=3 analysts, Strong Buy) believe Q1 2025 NII step-up of 32% QoQ is structural, with continued NIM expansion and dividend raises. Average price target $9.93 (+33% upside). Bears/Holds (33%) contend Q1 2025 was favorable timing; Q2–Q4 2025 NII momentum will moderate as easy comps lap, with credit cycle as the next leg of risk. The consensus mid-range of $7.50–9.00 is broadly consistent with this synthesis's fair value range of $7.00–9.50.”

• ◆Q2 2025 and subsequent quarterly earnings — first validation of NII trajectory sustainability
• ◆Federal Reserve rate cuts — each 25bps cut adds ~$10M annualized NII via lower repo costs
• ◆Dividend increase announcement — possible at Q3 2025 earnings (Nov 2025) if EAD sustains above 1.2x coverage
• ◆Book Value recovery toward $10+ as agency MBS spreads tighten with Fed cutting cycle
• ◆Portfolio scaling to $12–14B at 3–4x leverage adds $25–35M/year in incremental NII

• ◆Interest rate spike (10Y to 5%+) restarts BV destruction; each +100bps = −$1.50–2.50 BVPS
• ◆Third dividend cut from Q1 2025 baseline of 1.0x EAD coverage with zero buffer
• ◆Credit cycle turn in non-QM/BPL with delinquency rising to 4–6% in recession scenario
• ◆Repo market disruption forcing margin calls on $4.1B repo book; 3.4x leverage is primary mitigant
• ◆Competitive yield compression from rival mREITs and private credit bidding for same assets