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 Walker & Dunlop (NYSE: WD) and the best and worst performers in the thrifts & mortgage finance industry.

Thrifts & Mortgage Finance institutions operate by accepting deposits and extending loans primarily for residential mortgages, earning revenue through interest rate spreads (difference between lending rates and borrowing costs) and origination fees. The industry benefits from demographic tailwinds as millennials enter prime homebuying age, technological advancements streamlining the loan approval process, and potential interest rate stabilization improving affordability. However, significant headwinds include net interest margin compression during rate volatility, increased competition from fintech disruptors offering digital-first experiences, mounting regulatory compliance costs, and potential housing market corrections that could impact loan portfolios and default rates.

The 18 thrifts & mortgage finance stocks we track reported a slower Q2. As a group, revenues missed analysts’ consensus estimates by 29.8% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 4.8% on average since the latest earnings results.

Walker & Dunlop (NYSE: WD)

Originating as a small mortgage banking firm during the Great Depression in 1937, Walker & Dunlop (NYSE: WD) provides commercial real estate financing, property sales, appraisal, and investment management services with a focus on multifamily properties.

Walker & Dunlop reported revenues of $319.2 million, up 17.9% year on year. This print exceeded analysts’ expectations by 17.1%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ net interest income estimates and a beat of analysts’ EPS estimates.

“Walker & Dunlop’s second quarter results demonstrate terrific performance by our team in what appears to be the advent of the next commercial real estate investment cycle,” commented Walker & Dunlop Chairman and CEO, Willy Walker.

Walker & Dunlop pulled off the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 11.7% since reporting and currently trades at $84.31.

Is now the time to buy Walker & Dunlop? Access our full analysis of the earnings results here, it’s free.

Best Q2: Ellington Financial (NYSE: EFC)

Operating under the guidance of Ellington Management Group, a respected name in structured credit markets, Ellington Financial (NYSE: EFC) acquires and manages a diverse portfolio of mortgage-related, consumer-related, and other financial assets to generate returns for investors.

Ellington Financial reported revenues of $92.54 million, up 1.5% year on year, outperforming analysts’ expectations by 11.5%. The business had a stunning quarter with a solid beat of analysts’ tangible book value per share estimates and a beat of analysts’ EPS estimates.

The market seems happy with the results as the stock is up 8.5% since reporting. It currently trades at $13.75.

Is now the time to buy Ellington Financial? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Franklin BSP Realty Trust (NYSE: FBRT)

Operating as a specialized real estate investment trust (REIT) with roots dating back to 2012, Franklin BSP Realty Trust (NYSE: FBRT) originates and manages a diversified portfolio of commercial real estate debt investments secured by properties in the United States and abroad.

Franklin BSP Realty Trust reported revenues of $50.78 million, up 171% year on year, falling short of analysts’ expectations by 8.9%. It was a disappointing quarter as it posted a significant miss of analysts’ net interest income estimates and a significant miss of analysts’ EPS estimates.

Interestingly, the stock is up 11% since the results and currently trades at $11.20.

Read our full analysis of Franklin BSP Realty Trust’s results here.

Arbor Realty Trust (NYSE: ABR)

With roots dating back to 2003 and a focus on the stability of multifamily housing, Arbor Realty Trust (NYSE: ABR) is a specialized lender that provides financing solutions for multifamily and commercial real estate while also originating and servicing government-backed mortgage loans.

Arbor Realty Trust reported revenues of $130.4 million, down 14.8% year on year. This number came in 3.8% below analysts' expectations. Overall, it was a disappointing quarter as it also produced a significant miss of analysts’ net interest income estimates and a significant miss of analysts’ EPS estimates.

The stock is up 7.2% since reporting and currently trades at $11.96.

Read our full, actionable report on Arbor Realty Trust here, it’s free.

Two Harbors Investment (NYSE: TWO)

Operating in the complex world of mortgage finance since 2009, Two Harbors Investment (NYSE: TWO) is a real estate investment trust that invests in mortgage servicing rights and agency residential mortgage-backed securities.

Two Harbors Investment reported revenues of -$12.28 million, down 111% year on year. This result lagged analysts' expectations by 111%. It was a slower quarter as it also logged a significant miss of analysts’ EPS estimates and tangible book value per share in line with analysts’ estimates.

The stock is down 1.3% since reporting and currently trades at $10.22.

Read our full, actionable report on Two Harbors Investment here, it’s free.

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.