Federal National Mortgage Association (FNMA): fair value, margin of safety and Wheel Score

Is FNMA undervalued?

FNMA has a margin of safety of 96%: the stock closed at 3.66 on 16 Oct 2026 against a GLS average fair value of 86.35. 8 of the 8 valuation models that produced a number sit above the price. Our screens treat a discount this large as a strong starting point for a cash-secured put, not as a verdict - the fair value is a model output, and a wide gap can mean the models are missing something the market knows.

The 8 models disagree widely: GLS Growth gives 8.87 while DCF gives 347.37. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.

The nightly engine files FNMA under Value: positive earnings at a P/E of 18 or less.

Nine valuation models for FNMA

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Financial health is average - FNMA passes 6 of the nine Piotroski tests, which passes the Sunday Scan's "6 or more" rule. The Financials tab on the Quote page shows which tests fail. The GLS Moat score is 5.1 out of 10: a ten-year record that is consistent in some of the metrics the score tracks (revenue, earnings, margins, cash flow, returns on capital) and patchy in others.

Returns on capital are thin or negative - ROIC 0.3%, ROE 13.2%, ROA 0.3% - with debt at 38.35 times equity and a free-cash-flow yield of 723.1%. Debt of 38.35 times equity is on the high side for the sector and is worth checking against the cash flow before treating the stock as a long-term hold.

Federal National Mortgage Association pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain. Revenue comes mainly from Multifamily 100% (quarter Q2 FY2026).

Institutional ownership scores 1/10, insider activity 5/10 and Congressional trading 5/10 on the GLS smart-money scales.

Wheel Score 39: No options

FNMA has no listed options in the nightly snapshot, so there is nothing to sell and the stock cannot be wheeled however good the business; the Wheel Score is capped at 39 and shown as "No options" (39 here). The valuation and quality numbers still apply to owning the shares outright.

Volume runs at 4.3M shares a day on a market cap of $4.2B, with a beta of 1.69 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 17 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

The next earnings report is due on 4 Nov 2026 (before the open), 19 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

Similar stocks in Financial - Mortgages

The 12 companies below are the closest to Federal National Mortgage Association by market cap within the Financial - Mortgages industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.

⚖ Compare FNMA with 7 of them   All Financial Services stocks →