Spotting Winners: Farmer Mac (NYSE:AGM) And Specialty Finance Stocks In Q3

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at HA Sustainable Infrastructure Capital and the best and worst performers in the specialty finance industry.

Specialty finance companies provide targeted lending or financial services for specific industries or needs. They benefit from expertise in particular sectors, often reduced competition in specialized niches, and tailored underwriting that can yield higher margins. Challenges include concentration risk in specific industries, difficulty achieving scale efficiencies, and potential vulnerability during sector-specific downturns affecting their specialized markets.

The 10 specialty finance stocks we track reported a mixed Q3. As a group, revenues missed analysts’ consensus estimates by 5.8%.

In light of this news, share prices of the companies have held steady as they are up 2.1% on average since the latest earnings results.

HA Sustainable Infrastructure Capital

With a proprietary "CarbonCount" metric that quantifies the environmental impact of each dollar invested, HA Sustainable Infrastructure Capital is an investment firm that finances and develops climate-positive infrastructure projects across renewable energy, energy efficiency, and ecological restoration.

HA Sustainable Infrastructure Capital reported revenues of $139.2 million, up 51.5% year on year. This print exceeded analysts’ expectations by 58.5%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ revenue estimates and an impressive beat of analysts’ EBITDA estimates.

HA Sustainable Infrastructure Capital pulled off the biggest analyst estimates beat and fastest revenue growth of the whole group. Unsurprisingly, the stock is up 18.8% since reporting and currently trades at $33.91.

Is now the time to buy HA Sustainable Infrastructure Capital? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Encore Capital Group

Operating in the often misunderstood world of debt collection since 1999, Encore Capital Group purchases portfolios of defaulted consumer debt at deep discounts and works with individuals to recover these obligations while helping them toward financial recovery.

Encore Capital Group reported revenues of $460.4 million, up 25.4% year on year, outperforming analysts’ expectations by 11.9%. The business had an incredible quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ revenue estimates.

The market seems happy with the results as the stock is up 19.6% since reporting. It currently trades at $51.13.

Is now the time to buy Encore Capital Group? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: DigitalBridge

Transforming from a traditional real estate investor to a digital-focused powerhouse in 2021, DigitalBridge Group is a global digital infrastructure investment firm that manages capital and operates assets across data centers, cell towers, fiber networks, and edge infrastructure.

DigitalBridge reported revenues of $3.82 million, down 95% year on year, falling short of analysts’ expectations by 96.2%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ revenue estimates.

DigitalBridge delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 25% since the results and currently trades at $9.52.

Read our full analysis of DigitalBridge’s results here.

Farmer Mac

Created by Congress in 1987 to build a bridge between Wall Street and rural America, Farmer Mac provides a secondary market for agricultural and rural loans, helping lenders increase their liquidity and lending capacity to serve rural America.

Farmer Mac reported revenues of $94.96 million, up 11.1% year on year. This number came in 6% below analysts' expectations. Overall, it was a softer quarter as it also logged a significant miss of analysts’ revenue estimates.

The stock is up 9.2% since reporting and currently trades at $172.69.

Read our full, actionable report on Farmer Mac here, it’s free for active Edge members.

Hercules Capital

Named after the mythological hero known for his strength, Hercules Capital is a business development company that provides debt financing to venture capital-backed and growth-stage technology and life sciences companies.

Hercules Capital reported revenues of $138.1 million, up 10.3% year on year. This result was in line with analysts’ expectations. Aside from that, it was a mixed quarter as it also produced EPS in line with analysts’ estimates but revenue in line with analysts’ estimates.

The stock is up 2.2% since reporting and currently trades at $17.98.

Read our full, actionable report on Hercules Capital here, it’s free for active Edge members.