Federal Agricultural Mortgage Corp (AGM) is a government‑sponsored enterprise that provides agricultural mortgage and secondary‑market financing, showing relatively predictable reported earnings with trailing twelve‑month net income of $207.2M and a cash‑flow profile dominated by financing activity ( TTM financing cash flow $1.48B versus operating cash flow $436.4M ). Financial Performance and Cas
Federal Agricultural Mortgage Corp (AGM) is a government‑sponsored enterprise that provides agricultural mortgage and secondary‑market financing, showing relatively predictable reported earnings with trailing twelve‑month net income of $207.2M and a cash‑flow profile dominated by financing activity (TTM financing cash flow $1.48B versus operating cash flow $436.4M).
The company’s earnings trajectory has been a relative strength: net income rose from $146.9M at 2022‑03‑31 to $200.0M at 2023‑12‑31 and reached $207.2M TTM at 2024‑12‑31, reflecting steady improvement over the last two-plus years. Operating cash flow has historically exceeded reported earnings, with the most recent observation of $436.4M (TTM) compared with the $207.2M net income (TTM), which supports earnings quality and cash conversion. Financing capacity has also been available when needed — financing cash flow peaked near $2.26B in 2020 and, after a dip to $1.21B at 2024‑12‑31, rebounded to $1.48B TTM as of 2025‑03‑31.
There are clear areas of concern. Revenue showed a sharp sequential deterioration in 2025, falling from $185.0M for the quarter ended 2025‑06‑30 to $66.7M for 2025‑09‑30 and then to $4.0M for 2025‑12‑31, marking an abrupt inflection that contrasts with the company’s relatively steady quarterly net income history (most quarters previously in the $40M–$60M range, with a spike to $110.3M in 2024‑12‑31). The balance of cash flows also warrants attention: investing cash flow is reported as deeply negative at −$995.1M (TTM, last available observation 2013‑12‑31), and the most recent financing cash flow ($1.48B) remains materially larger than operating cash flow ($436.4M), highlighting dependence on external funding.
The foundation of business quality and long-term value creation
FEDERAL AGRICULTURAL MORTGAGE CORP's revenue shows a sharp decline in the most recent quarters after a relatively large quarter in mid—2025. Revenue fell from $185.0M for the quarter ended 2025-06-30 to $66.7M for 2025-09-30 and then to $4.0M for 2025-12-31, marking a clear inflection point between June and December 2025.
Net income has generally sat in the \$40M—\$60M range for many quarters prior to late 2024, with a notable spike to $110.3M for the quarter ended 2024-12-31. The most recent net income observation is $55.0M for the quarter ended 2025-09-30, which is below the December 2024 peak but within the historical mid—range.
Most recent quarterly revenue: $4.0M (2025-12-31)
Most recent quarterly net income: $55.0M (2025-09-30)
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Period Information
Report Type: Annual (10-K)
Period: Jan 2025 to Dec 2025
Analyzing long-term margin stability and competitive positioning
Understanding Profit Margins
Between Jan 2025 and Dec 2025, Federal Agricultural Mortgage Corp converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
FEDERAL AGRICULTURAL MORTGAGE CORP’s trailing twelve‑month net income shows a clear upward trajectory in the recent sample. Net income rose from $146.9M at 2022‑03‑31 through incremental quarterly increases to $200.0M at 2023‑12‑31 and reached $207.2M at 2024‑12‑31, indicating steady improvement in reported earnings over the last two-plus years.
Operating cash flow (TTM) observations in the dataset are available only through 2021; the latest reported operating cash flow TTM is $436.4M at 2021‑12‑31. In each period where both metrics are present historically (2013, 2015, 2021), operating cash flow exceeded net income for the same trailing period. The most recent Net Income (TTM) was $207.2M. The most recent Operating Cash Flow (TTM) observation was $436.4M (2021‑12‑31).
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
Over the period shown, cash flows from financing exhibit the clearest recent movement: after earlier highs around $2.26B (2020) and $2.19B (2022), trailing twelve‑month financing cash flow declined to $1.21B at 2024‑12‑31 and then rose to $1.48B as of 2025‑03‑31, representing a partial rebound in the most recent quarter. Financing cash flow remains materially larger than the most recently reported operating cash flow in the dataset.
Operating and investing cash flows in the chart are older and show no later updates: the latest reported operating cash flow (TTM) is positive at $436.4M as of 2021‑12‑31, while the latest investing cash flow (TTM) is negative at ‑995.1M as of 2013‑12‑31. These values indicate the most recent magnitudes available for each category on the chart.
The most recent trailing twelve‑month financing cash flow was $1.48B. The most recent trailing twelve‑month operating cash flow was $436.4M. The most recent trailing twelve‑month investing cash flow was ‑995.1M.
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.