AGNC Investment (AGNC) Down 7.1% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for AGNC Investment (AGNC). Shares have lost about 7.1% in that time frame, underperforming the S&P 500.

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

AGNC Investment Q4 Earnings Miss Estimates, Book Value Improves Y/Y

AGNC Investment’s fourth-quarter 2025 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 35 cents missed the Zacks Consensus Estimate of 37 cents. Also, the bottom line declined 5.4% from the year-ago quarter.

Results were adversely impacted by a decline in average asset yield and reduced net interest spread. Further, a higher weighted average cost of funds was another concern. However, a rise in tangible net BVPS on the portfolio was positive.

Adjusted net interest and dollar roll income available to common stockholders of $457 million moved up 12.8% from the year-ago quarter. The company reported fourth-quarter comprehensive income per common share of 89 cents against a comprehensive loss of 11 cents per common share in the year-ago quarter.

In 2025, net spread and dollar roll income per common share of $1.50 per share missed the consensus estimate of $1.53 and declined from $1.88 in 2024. Adjusted net interest and dollar roll income was $1.8 billion, up 1% from 2024.

Inside Headlines

Net interest income (NII) was $206 million against net interest expense of $115 million in the prior-year quarter. The metric missed the Zacks Consensus Estimate by 36.3%.

For 2025, NII was $675 million, which missed the Zacks Consensus Estimate of $792.3 million. The metric compared favorably with $18 million of NII in 2024.

AGNC Investment's average asset yield on its portfolio was 4.87% in the fourth quarter of 2025, down from 5.02% in the fourth quarter of 2024.
The combined weighted average cost of funds, inclusive of interest rate swap, was 3.10%, up from 2.89% in the fourth quarter of 2024.

The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 1.81%, down from 1.91% in the year-ago quarter.

As of Dec. 31, 2025, AGNC Investment’s average tangible net book value "at risk" leverage ratio was 7.2X, unchanged from the prior-year quarter.

In the fourth quarter, the company's investment portfolio bore an average actual constant prepayment rate of 9.7%, up from 9.6% in the year-ago quarter.

As of Dec. 31, 2025, tangible net BVPS was $8.88, up 5.6% on a year-over-year basis.

The economic return on tangible common equity was 11.6% against the economic loss on tangible common equity of 0.6% in the year-ago quarter.

As of Dec. 31, 2025, the company’s investment portfolio aggregated $94.8 billion. This included $81.1 billion of Agency mortgage-backed securities, $13 billion net forward purchases/(sales) of Agency MBS in the "to-be-announced" market ("TBA securities"), and $0.7 billion of CRT and non-Agency securities and other mortgage credit investments.

Balance Sheet Position

As of Dec. 31, 2025, AGNC’s cash and cash equivalents totaled $450 million, the same as the prior quarter.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -5.09% due to these changes.

VGM Scores

At this time, AGNC Investment has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of D. 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 these revisions indicates a downward shift. It's no surprise AGNC Investment has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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