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Assessing Rithm Capital’s valuation as expansion into third‑party asset management and spin‑off plans gain traction

Simply Wall St · 2d ago

Rithm Capital (RITM) is back in focus after a fresh wave of strategic moves, from buying Crestline and Sculptor to exploring a spin off of its origination and servicing operations.

See our latest analysis for Rithm Capital.

Despite the recent pullback in its 90 day share price return, Rithm’s steady year to date share price gain and strong multi year total shareholder returns suggest sentiment is still constructive as investors weigh these expansion moves and spin off optionality.

If Rithm’s transformation has you thinking about where else capital is moving, it could be a good moment to explore fast growing stocks with high insider ownership for other high conviction ideas.

With Rithm trading at a meaningful discount to analyst targets despite solid earnings growth and expansion into fee based asset management, investors now face a key question: is this a mispriced compounder, or has the market already penciled in the upside?

Most Popular Narrative Narrative: 22.6% Undervalued

With Rithm Capital’s fair value estimate sitting notably above its last close, the most followed narrative frames today’s pricing as a sizable gap to potential.

The broad investor appetite for alternative yield products, combined with a low-to-moderate interest rate environment and Rithm's demonstrated success in attracting institutional capital to managed accounts and funds, ensures stable capital access and supports scalable growth in management fees and earnings.

Read the complete narrative.

If you want to see the engine behind this upside call, from ambitious revenue compounding to rising margins and a leaner earnings multiple, all built into 2028 projections, you can review the full narrative and see how those moving parts add up.

Result: Fair Value of $14.40 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying competition, margin pressure, and a more volatile rate backdrop could easily derail the growth, diversification, and valuation case sketched out above.

Find out about the key risks to this Rithm Capital narrative.

Build Your Own Rithm Capital Narrative

If you see the story differently or want to stress test the assumptions yourself, you can build a custom narrative in under three minutes: Do it your way.

A great starting point for your Rithm Capital research is our analysis highlighting 5 key rewards and 3 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If you stop with Rithm, you could miss out on other powerful themes, so use the Simply Wall St Screener to uncover your next edge.

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.