A month has gone by since the last earnings report for AGNC Investment (AGNC Quick QuoteAGNC - Free Report) . Shares have added about 5.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is AGNC Investment due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

AGNC Investment Q1 Earnings Beat on Higher Asset Yield

AGNC Investment’s first-quarter 2024 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 58 cents beat the Zacks Consensus Estimate of 56 cents. However, the bottom line declined from the 60 cents reported in the previous quarter.

Adjusted net interest and dollar roll income of $496 million moved down from $497 million in the previous quarter.

The company reported first-quarter comprehensive income per common share of 48 cents compared with $1 in the prior quarter.

Inside the Headlines

Net interest expenses were $30 million compared with $26 million in the prior quarter. The Zacks Consensus Estimate was pegged at $386 million.

AGNC Investment's average asset yield on its portfolio was 4.56% in the first quarter, up from 4.47% reported in the prior quarter.

The combined weighted average cost of funds, inclusive of interest rate swap, was 1.58% compared with 1.39% in the prior quarter.

The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 2.98%, down from 3.08% in the previous quarter.

As of Mar 31, 2024, AGNC Investment's average tangible net book value "at risk" leverage ratio was 7X compared with 7.4X in the prior quarter.

In the first quarter, the company's investment portfolio bore an average actual constant prepayment rate of 5.7%, down from 6.2% in the previous quarter.

As of Mar 31, 2024, tangible net book value per common share (BVPS) was $8.84, up from $8.70 as of Dec 31, 2023.

The economic return on tangible common equity was 5.7%. In the previous quarter, the metric was 12.1%. This included a dividend per share of 36 cents and an increase of 14 cents in tangible net BVPS.

As of Mar 31, 2024, the company’s investment portfolio aggregated $63.3 billion. This included $53.7 billion of Agency MBS, $8.4 million of net forward purchases of Agency MBS in the to-be-announced market and $1.1 billion of credit risk transfer and non-Agency securities and other mortgage credit investments.

As of Mar 31, 2024, AGNC Investment’s cash and cash equivalents totaled $505 million, down from $518 billion as of Dec 31, 2023.

Dividend Update

In the first quarter, AGNC Investment announced a dividend of 12 cents per share each for January, February and March. Notably, management declared $13.1 billion in common stock dividends or $47.56 per common share since its initial public offering in May 2008 through first-quarter 2024.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

At this time, AGNC Investment has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, AGNC Investment has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.