AGNC Investment (AGNC) reported second quarter 2026 earnings on July 20, with net income of US$654 million compared with a net loss of US$140 million a year earlier. Basic earnings per share were US$0.53.

At a recent share price of US$10.90, AGNC Investment has seen short term share price returns move slightly in both directions. However, the 1 year total shareholder return of 30.37% and 3 year total shareholder return of 66.91% point to stronger momentum over a longer horizon.

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AGNC Investment has produced eye catching earnings and solid multi year returns, yet the share price sits close to the latest analyst target. Is the stock already reflecting that strength or still trading at a discount?

Price-to-Earnings of 6.1x: Is it justified for AGNC Investment?

On a P/E of 6.1x, AGNC Investment appears inexpensive compared with both its own fair value estimate and peers, given the last close of $10.90 and strong recent earnings growth.

The P/E multiple links the current share price to earnings per share and is a common way for investors to compare how the market is pricing profit across similar companies. For a mortgage REIT like AGNC Investment, this helps frame how much investors are currently paying for each dollar of earnings.

AGNC Investment is described as trading at 41.5% below the Simply Wall St estimate of fair value based on the SWS DCF model, with the stock at $10.90 versus an estimated future cash flow value of $18.65. Against that backdrop, the current P/E of 6.1x sits below an estimated fair P/E of 11.3x, which is presented as a level the market could move towards if sentiment and fundamentals align.

Compared with the US Mortgage REITs industry average P/E of 10.2x and a peer average of 12.1x, AGNC Investment is priced at a clear discount. That gap suggests the stock is being valued more cautiously than many of its closest comparables despite very strong recent earnings growth and high net margins.

Result: Price-to-Earnings of 6.1x (UNDERVALUED)

However, AGNC Investment still faces risks if mortgage spreads widen, or if annual revenue and net income growth, which have recently declined, continue to come under pressure.

Another View on AGNC Investment Using the SWS DCF Model

While the P/E of 6.1x makes AGNC Investment look inexpensive relative to peers, the SWS DCF model goes further and suggests the stock trades at a 41.5% discount to an estimated future cash flow value of $18.65. Both methods point to upside, but it is important to consider whether they are flagging opportunity or highlighting additional risk.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out AGNC Investment for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With AGNC Investment showing both appealing valuation signals and some flagged concerns, it makes sense to review the full picture and act on your own timeline. To see both sides of the story in one place, take a closer look at the 3 key rewards and 3 important warning signs.

Looking for more investment ideas beyond AGNC Investment?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.