FBR Capital Markets said Monday that it has initiated coverage on Stonegate Mortgage (SGM) with an Outperform rating and a price target of $21.00.

"Stonegate, with its focus on originating primarily purchase mortgages in all three mortgage market channels and building a long-duration servicing asset, is well positioned to take advantage of the market shift to nonbank originators," said Paul Miller, a managing director at FBR.

"This is especially true given the company's continued geographic expansion, established relationships with correspondents, and planned retail tuck-in acquisitions."

Stonegate has grown quickly, launching an IPO this past October and most recently agreeing to acquire the wholesale and parts of the retail lending business at Nationstar Mortgage (NSM), another non-bank mortgage lender.

Miller says the company could reach a tangible book value of of $22.31 per share by the end of 2015, "should the company achieve its targeted origination and servicing portfolio growth."

Stonegate shared closed at $16.85 on Friday, with a 52-week range of $16.34 to $18.94. Shares were down 0.9% to $16.70 in early trading Monday morning.