Federal National Mortgage Association (FNMA) Stock Analysis & Winston Score

Federal National Mortgage Association, known as Fannie Mae, helps make it easier for Americans to buy homes. It does this by purchasing home loans from banks and mortgage lenders, which frees up those lenders to offer more loans to new borrowers. Fannie Mae is one of two government-sponsored enterprises that together support a large share of the entire U.S. mortgage market.

Fannie Mae makes money by packaging the mortgages it buys into mortgage-backed securities and selling them to investors, while charging a fee to guarantee those payments. It operates entirely within the United States and, given its government backing, holds a structural advantage that private competitors cannot easily replicate. Fannie Mae has been under U.S. government conservatorship since the 2008 financial crisis, and its future ownership structure — whether it stays under government control or is released as a private company — remains the central uncertainty investors watch closely.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-0.2% YoY

YoY Growth Rate

Revenue declining

EPS Growth

>+1,000% YoY

YoY Growth Rate

Strong earnings growth

R&D Spend

$0/ year

0.0% of revenue

Below sector average (7%)

Research and development spending

Insider Activity

0.0%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$11.5B cash & investments

Quarterly Free Cash Flow

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

Federal National Mortgage Association's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count broadly stable

0.0% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 5.89B (2021) → 5.89B (2025)

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

97.7%

Premium pricing power — 97.7% gross margin

Operating Margin

95.0%

Excellent — 95.0% operating margin

ROCE

0.9%

Weak — 0.9% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+3.9%

Slow sales growth (3.9% YoY)

EPS YoY

+54.9%

Earnings growing fast (54.9% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

182%

Turns 182% of profit into real cash

FCF Margin

16.4%

Converts sales into free cash efficiently (16.4%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

37.04

Heavy debt load (37.04)

Interest Cover

1.14x

Dangerous — barely covers interest (1.1x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

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Valuation

P/E Ratio (TTM)

3.8x

Attractive valuation — P/E 3.8

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

+1.4

GROWING

Earnings expected to grow — slightly cheaper on forward P/E

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Dividends

Not applicable for this business.

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