Granite Point Mortgage Trust Inc. (GPMT) stock intrinsic value fair value estimate & owner earnings analysis

Granite Point Mortgage Trust is a real estate investment trust that made senior floating-rate first-mortgage loans on U.S. commercial properties and funded them with bank repurchase facilities and securitized debt. At the end of 2025 the loan book was $1.69 billion of unpaid principal, 43.6% office and 31.3% multifamily by carrying value. It has been shrinking for years: loans repaid were $664.6 million in 2023, $534.6 million in 2024 and $335.7 million in 2025, while new originations and additional fundings were only $47.6 million in 2025. Two properties taken over from borrowers ($90.7 million carrying value at June 30, 2026) are now held as real estate owned. How we measured earnings. We start from operating cash flow, remove working-capital swings, subtract stock compensation and the capital spending on the foreclosed properties, and then subtract the $14.4 million a year paid on the 7.00% Series A preferred stock (8,229,500 shares, $25 liquidation preference, $205.7 million in total), because that dividend ranks ahead of common shareholders and is paid in cash. On that basis, owner earnings per common share were about $1.18 in 2019, $0.72 in 2022 and $0.59 in 2023, then turned negative: $(0.25) in 2024 and $(0.43) in 2025. We do not use the older years as the level for today's value. Those years came when the loan book was larger (loans of $2.7 billion at the end of 2023) and before the credit losses of 2024 and 2025; it is now a smaller, credit-impaired book. The most recent level is below zero, so the value here rests on what the loan book returns to common shareholders as it repays, not on an ongoing earnings stream. Operating cash flow was $2.7 million in 2025 and $(1.9) million in the first half of 2026. Recent growth in owner earnings is not credited: it fell from $(0.25) to $(0.43) in 2025, and we assume no new lending, because new fundings have shrunk to $47.6 million a year and nothing in the filings shows the company growing the book again. What the shares are backed by. Reported book value per common share was $8.47 at the end of 2024, $7.29 at the end of 2025 and $5.70 at June 30, 2026, after a $47.0 million provision for credit losses and a net loss to common shareholders of $62.0 million ($1.29 per share) in the second quarter of 2026, according to the company's earnings release. At the end of 2025 four loans with $248.7 million of principal were rated in the company's weakest risk category, with a $104.5 million reserve against them. The dividend to common shareholders has been cut to $0.05 per quarter, compared with $1.68 for all of 2019. Unrestricted cash was $58.5 million at June 30, 2026 and $35.7 million on August 3, 2026, per the company's earnings release, with a total leverage ratio of 1.9 times. The three cases all start from the $5.70 book value and assume the existing loans repay over roughly four years, in line with the $335.7 million to $664.6 million a year repaid in 2023 to 2025. Book value already carries the company's own reserve for expected losses. The cases differ in further losses beyond that reserve and in how much the company spends each year on operating costs and preferred dividends beyond what its loans earn. Cash returned late is worth less today, which we discount at 6% a year, costing about 11% of the value returned. Base case, about $3.10 per share: further credit losses of $30 million ($0.63 per share, similar to the $27.5 million provision in 2025), a shortfall of about $0.40 per share a year (the second-quarter 2026 run-rate before realized losses was $(0.10) per quarter), worth $1.39 over four years, and $0.55 for the delay in getting capital back. $5.70 less these three items is about $3.13, rounded to $3.10. Bear case, about $1.45 per share: a further $100 million of losses ($2.10 per share). That compares with $229 million of provisions in 2024 and 2025 combined and the $47.0 million second-quarter 2026 provision. We also assume a shortfall of $0.50 per share a year, close to the $(0.43) of 2025 owner earnings, worth $1.73 over four years, and $0.39 for delay, leaving about $1.48, rounded to $1.45. Common equity would be much reduced, and it ranks behind $1.2 billion of liabilities (at the end of 2025) and the $205.7 million preferred stock. Bull case, about $4.40 per share: no further losses beyond the current reserve, a smaller shortfall of $0.20 per share a year ($0.69 over four years) as the company's 2026 refinancing of its older securitized debt, which the company says lowered funding costs by 38 basis points, takes hold, and $0.62 for delay. Even here the shares are worth less than the $5.70 book value, because the book is running off at a loss. We do not credit any return to lending or profit growth, as nothing signed or already under way supports it. What could make this wrong. If the office loans (43.6% of the book) or the four weakest loans lose far more than we assume, common equity falls toward zero. The reserve has needed repeated increases, with provisions of $201.4 million in 2024, $27.5 million in 2025 and $47.0 million in the second quarter of 2026 alone. On the other side, faster repayments at or near par would put value above our base case, but nothing in the filings lets us count on that today. The 2026 quarterly figures come from the company's earnings release and quarterly report and are not audited.