Granite Point Mortgage Trust Inc. — financial distress indicators
Financial-health summary
Granite Point Mortgage Trust Inc.'s reported numbers place it in the 'Watch' financial-health band (distress score 43/100). The main indicators are market-implied default probability >20%, losses in each of the last 3 years and material debt with no ebitda. Independently, the market-implied (Merton) default probability is 33.5%. In its favour: operating cash flow is positive over the latest 12 months.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Merton distance-to-default 0.43 σ → PD 34%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Debt is 44% of assets while EBITDA is not positive.
With no operating earnings, repayment depends entirely on asset sales or fresh capital.
Price is -72% from its 52-week high.
For financial firms a share-price run often precedes a deposit or funding run (confidence channel).
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
📰 Recent news scan
- Granite Point Mortgage Trust (GPMT) Stock Fair Value Rises As Analysts Weigh Balance Sheet RepairYahoo Finance · 2026-10-08
- Granite Point Mortgage Trust Inc. Announces Completion of Reverse Stock SplitYahoo Finance · 2026-10-06
- Granite Point Mortgage Trust Inc. Announces Review of Alternatives to Enhance Stockholder Value and 1-for-10 Reverse Stock SplitYahoo Finance · 2026-09-23
- Granite Point Mortgage Trust Inc. Announces Third Quarter 2026 Common and Preferred Stock Dividends and Business Update and New Loan ResolutionYahoo Finance · 2026-09-15
- Palogic Value Fund Sends Letter to the Board of Granite Point Mortgage TrustYahoo Finance · 2026-08-18
- Granite Point Mortgage Trust (GPMT) Q2 2026 Earnings Call TranscriptYahoo Finance · 2026-08-12
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do Granite Point Mortgage Trust Inc.'s financial-health indicators show?
As of 2026-10-08, Granite Point Mortgage Trust Inc.'s public financial data places it in the 'Watch' band with a distress score of 43/100, driven by market-implied default probability >20%, losses in each of the last 3 years and material debt with no ebitda. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is Granite Point Mortgage Trust Inc.'s financial distress score?
43/100 ('Watch'). Merton distance-to-default 0.43 σ (model default probability 33.5%).
What works in Granite Point Mortgage Trust Inc.'s favour?
Operating cash flow is positive over the latest 12 months.
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
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Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.