The stock of the Federal National Mortgage Association (FNMA), commonly known as “Fannie Mae,” is a key player in the United States mortgage market. As of July 3, 2025, the stock traded at $9.48, marking a 1.39% increase on the last trading day. The company’s market capitalization stands at approximately $10.98 billion. However, an examination of its financial data, particularly the infinite P/E ratio and volatile returns, points to a unique complexity associated with the company’s special status.

About Fannie Mae and its Market Position

The Federal National Mortgage Association (Fannie Mae) is a U.S. government-sponsored enterprise (GSE) originally established to increase the supply of money available for housing construction and home purchases. Its primary role involves purchasing mortgages from banks and other lenders, packaging them into mortgage-backed securities (MBS), and selling them to investors. This activity enables banks to continue issuing new loans, thereby creating liquidity in the mortgage market. Fannie Mae is managed differently from typical public companies; since the 2008 financial crisis, it has been under almost complete government control, subject to complex bailout agreements.

Financial Performance and Returns: Contrasts and Interpretation

The stock data presents a complex and unusual picture. The Trailing 12-Month P/E ratio is listed as “infinite” (∞), and the Trailing 12-Month EPS is $0.00. These figures stem from Fannie Mae’s 2008 bailout agreement, under which all its profits are required to be remitted to the U.S. Treasury, preventing ordinary shareholders from recognizing these earnings. Despite this, the company shows significant revenues of $30.44 billion over the last 12 months and a net income of $13 million attributable to common shareholders, indicating healthy business operations. The high profit margins (53.61%) and return on equity (18.10%) also reflect its operational efficiency.

The stock’s returns across different periods reveal extreme volatility, characteristic of the company’s situation:

Year-to-Date Return: 189.02%

1-Year Return: 540.54%

3-Year Return: 2,006.67%

5-Year Return: 332.88%

These returns, significantly higher than the S&P 500 index for the same periods, likely reflect speculation surrounding a potential change in Fannie Mae’s government conservatorship status and the return of value to private shareholders. However, it’s important to remember that the stock trades at a relatively low price, and even a small absolute increase can generate enormous percentage returns. Furthermore, the wide 52-week range ($1.02 – $11.91) highlights the high volatility and inherent risk of investing in it. The one-year target price of $2.50, significantly lower than its current price, underscores the uncertainty and disagreement among analysts regarding the stock’s future.

Recent News and Future Trends

Recent news surrounding Fannie Mae indicates significant developments in the U.S. mortgage sector. Reports on exploring the integration of crypto as a federal mortgage asset, and the establishment of a joint venture (U.S. Financial Technology, LLC) with Freddie Mac to manage a $6.5 trillion mortgage-backed securities (MBS) portfolio and sell technology to other institutions, reflect the potential for structural and technological changes in the company’s operations. These initiatives, particularly those related to cryptocurrencies, could expand the potential borrower base but also expose the market to new risks.

Fannie Mae’s status remains a subject of ongoing political and legal debate in the U.S. The central question is whether and when the company will be allowed to exit conservatorship and return to a more independent entity, which could restore significant value to common shareholders. Until then, investors in the stock assume high risk associated with regulatory and political uncertainty.

In conclusion

Fannie Mae’s stock offers immense return potential due to a possible change in its status, but it is a highly speculative investment. The infinite P/E ratio, lack of dividends, and extreme volatility, coupled with its dependence on government decisions, make it suitable only for investors with a high-risk tolerance. This article provides analysis only and does not constitute investment advice.