ARMOUR Residential REIT (ARR) AI Stock Analysis

• Market Cap: $1.70B
• Dividend Yield: 19.1%
• Average Volume (3M): 4.27M
• Price to Earnings (P/E): 8.0
• Beta (1Y): 1.03
• Revenue Growth: 157.34%
• EPS Growth: 91.67%
• Country: US
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 52
• Industry: REIT - Mortgage
• EPS (TTM): 0.77
• Shares Outstanding: 112,565,500
• 10 Day Avg. Volume: 3,765,314
• 30 Day Avg. Volume: 4,274,874
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 8.10
• Enterprise Value/Revenue: 69.59
• Enterprise Value/Gross Profit: 270.75
• Enterprise Value/Ebitda: 60.41
• 1Y Price Target: $16.00
• Price Target Upside: 6.10% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 48 Neutral
• Price Target: ―

ARMOUR Residential REIT faces significant challenges, primarily due to operational inefficiencies and unstable revenue. The financial performance is further hampered by a negative P/E ratio, despite a high dividend yield. Technical indicators suggest potential downward momentum. The earnings call highlights strong liquidity and strategic efforts, but also notes concerns about market volatility and book value decline.

Positive Factors

Analyst Recommendation

Upgrading ARR shares to BUY from Neutral indicates compelling relative value and total return opportunities.

Earnings

Earnings available for distribution exceeded JMS estimates due to higher net interest income, which has been stronger than expected for much of the sector.

Valuation

The company is becoming more attractive at the current valuation below 0.90x NAV and a 20% yield.

Negative Factors

Financial Performance

1Q25 results missed Street expectations, and book value per share is trailing expectations year-to-date in 2025.

Leverage Strategy

The approach of raising leverage and selling down pools indicates a reactive strategy to interest rate changes.

Market Sensitivity

The company was more sensitive to rate volatility in April, contributing to a drawdown in NAV.

ARMOUR Residential REIT Business Overview & Revenue Model

Company Description

ARMOUR Residential REIT, Inc. invests in residential mortgage-backed securities (MBS) in the United States. The company's securities portfolio primarily consists of the United States Government-sponsored entity's (GSE) and the Government National Mortgage Administration's issued or guaranteed securities backed by fixed rate, hybrid adjustable rate, and adjustable-rate home loans, as well as unsecured notes and bonds issued by the GSE and the United States treasuries, as well as money market instruments. It also invests in other securities backed by residential mortgages for which the payment of principal and interest is not guaranteed by a GSE or government agency. The company has elected to be taxed as a real estate investment trust under the Internal Revenue Code. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. ARMOUR Residential REIT, Inc. was incorporated in 2008 and is based in Vero Beach, Florida.

How the Company Makes Money

ARMOUR Residential REIT makes money through the management and investment in agency mortgage-backed securities (MBS). The company generates revenue by earning interest income on its MBS portfolio, which consists mostly of fixed-rate and adjustable-rate residential mortgage securities. ARMOUR Residential REIT profits from the spread between the yield on its MBS investments and the cost of borrowing funds to finance these investments. The company employs hedging strategies to manage interest rate risk and aims to optimize its portfolio to enhance returns while maintaining a stable risk profile. Key revenue streams for ARMOUR Residential REIT include interest income from its MBS holdings and gains from the sale of securities in its portfolio. Significant factors contributing to its earnings include the overall interest rate environment, the shape of the yield curve, and the company's ability to effectively hedge its interest rate exposure.

ARMOUR Residential REIT Financial Statement Overview

Summary

The company's financial performance is challenged by operational inefficiencies and unstable revenue growth, as reflected by a negative EBIT margin and net profit margin. While the balance sheet is stable with prudent debt management, the cash flow statement shows strong cash generation but high investment outflows.

Income Statement

The company shows significant volatility in its revenue and profit margins over the years. The TTM data indicates a positive gross profit margin of 71.41%, yet it suffers from a negative EBIT margin of -187.64% and a net profit margin of -2.75%, highlighting operational inefficiencies and substantial losses. Revenue growth has seen major fluctuations, indicating instability in income generation.

Balance Sheet

ARMOUR Residential REIT displays a solid equity ratio of 10.99% in the TTM, though the absence of debt is a positive indicator of leverage management. However, the company's return on equity remains negative, reflecting challenges in generating returns from equity investment. The balance sheet shows a stable equity position but lacks strong profitability metrics.

Cash Flow

Despite operating cash flow being substantially positive, the free cash flow growth rate is negligible due to consistent capital expenditures. The TTM data shows a robust operating cash flow to net income ratio, indicating efficient cash generation relative to net income. However, cash flow from investing activities is heavily negative, reflecting high investment outlays.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	198.26M	563.40M	449.67M	-225.87M	19.17M	-213.22M
Gross Profit	50.95M	39.26M	-24.37M	-458.12M	-3.34M	-44.41M
EBITDA	228.38M	509.75M	457.87M	-104.61M	7.11M	-151.13M
Net Income	-28.84M	-14.39M	-67.92M	-229.93M	15.36M	-215.11M
Balance Sheet
Total Assets	16.24B	13.55B	12.34B	9.44B	5.28B	5.52B
Cash, Cash Equivalents and Short-Term Investments	141.17M	67.97M	11.70B	87.28M	338.00M	5.35B
Total Debt	0.00	0.00	9.65B	6.46B	3.95B	4.54B
Total Liabilities	14.58B	12.19B	11.07B	8.32B	4.00M	4.20M
Stockholders Equity	1.66B	1.36B	1.27B	1.11B	1.14B	938.30M
Cash Flow
Free Cash Flow	264.01M	261.46M	132.82M	124.08M	11.74M	-257.82M
Operating Cash Flow	264.01M	261.46M	132.82M	124.08M	11.74M	-257.82M
Investing Cash Flow	-6.31B	-1.69B	-3.04B	-3.89B	503.58M	7.09B
Financing Cash Flow	5.93B	1.31B	3.05B	3.53B	-330.77M	-6.93B

ARMOUR Residential REIT Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 15.08
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARR, the sentiment is Negative. The current price of 15.08 is below the 20-day moving average (MA) of 15.31, below the 50-day MA of 15.87, and below the 200-day MA of 16.15, indicating a bearish trend. The MACD of -0.28 indicates Negative momentum. The RSI at 43.33 is Neutral, neither overbought nor oversold. The STOCH value of 66.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARR.

ARMOUR Residential REIT Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EFC	69 Neutral	$1.39B	11.43	8.81%	11.31%	20.32%	1.58%
DX	60 Neutral	$1.63B	15.88	4.93%	15.05%	35.01%	1115.85%
ARI	57 Neutral	$1.44B	―	-0.35%	9.65%	-26.29%	-342.06%
PMT	53 Neutral	$1.07B	16.91	5.50%	13.19%	1.71%	-56.69%
Sector *	53 Neutral	$1.24B	2.96	-5.63%	5.76%	-4.15%	-87.10%
ARR	48 Neutral	$1.70B	8.01	-2.04%	19.10%	157.34%	91.67%
TWO	47 Neutral	$1.03B	5.06	-14.78%	17.72%	-21.95%	-528.94%

ARMOUR Residential REIT Corporate Events

ARMOUR Residential REIT Releases Financial Position Report

On April 23, 2025, ARMOUR Residential REIT, Inc. released a presentation detailing its financial position and operations, highlighting key data as of March 31, 2025. The report includes a common stock price of $17.10, a debt-equity ratio of 7.3, and total liquidity of $848 million. ARMOUR’s portfolio is heavily invested in 30-year fixed-rate pools, with a significant portion in agency CMBS and conventionals. The company maintains a strategic focus on managing interest rate and MBS price risks, with a commitment to sustaining common share dividends.

Spark’s Take on ARR Stock

According to Spark, TipRanks’ AI Analyst, ARR is a Neutral.

ARMOUR Residential REIT faces significant challenges. The weak financial performance, including consistent losses and revenue volatility, weighs heavily on the score. Technical analysis suggests bearish momentum, further impacting the stock negatively. While the high dividend yield and strategic capital raising are positives, they are offset by valuation concerns and earnings call risks. Overall, the stock’s outlook is cautious with potential areas for improvement.

To see Spark’s full report on ARR stock, click here.

ARMOUR Residential REIT to Webcast Q1 2025 Results

ARMOUR Residential REIT announced that it will host a real-time webcast of its conference call with equity analysts to discuss its first quarter 2025 operating results. The webcast is scheduled for April 24, 2025, following the release of the company’s earnings after trading closes on April 23, 2025. This event provides stakeholders with insights into the company’s financial performance and strategic positioning.

Spark’s Take on ARR Stock

According to Spark, TipRanks’ AI Analyst, ARR is a Neutral.

ARMOUR Residential REIT faces significant challenges. The weak financial performance, including consistent losses and revenue volatility, weighs heavily on the score. Technical analysis suggests bearish momentum, further impacting the stock negatively. While the high dividend yield and strategic capital raising are positives, they are offset by valuation concerns and earnings call risks. Overall, the stock’s outlook is cautious with potential areas for improvement.

To see Spark’s full report on ARR stock, click here.

ARMOUR Residential REIT Updates Financial Position and Dividend

On March 13, 2025, ARMOUR Residential REIT, Inc. released a presentation detailing updates on its financial position, business, and operations. The presentation highlighted key financial metrics, including a common stock price of $19.05, a debt-equity ratio of 7.1, and total liquidity of $854.4 million as of February 28, 2025. The company also announced a March 2025 common dividend of $0.24, with an ex-dividend date of March 17, 2025, and a pay date of March 27, 2025. ARMOUR’s portfolio primarily consists of mortgage-backed securities, with a significant portion in 30-year fixed-rate pools. The announcement provides insights into ARMOUR’s strategic focus on maintaining dividends and managing interest rate risks, impacting its operations and stakeholder interests.

ARMOUR Residential REIT Updates on Financial Position

On February 12, 2025, ARMOUR Residential REIT, Inc. released a presentation updating stakeholders on its financial position and operations. The presentation highlighted key financial metrics, including a common stock price of $18.82, a debt-equity ratio of 6.7, and total liquidity of $760.4 million. ARMOUR’s portfolio, valued at $14.429 billion, is significantly invested in 30-year fixed-rate pools. The company declared a March 2025 common dividend of $0.24, with a pay date of March 27, 2025, reflecting its focus on stable dividend payouts. These updates provide insights into ARMOUR’s operational strategies and its positioning within the mortgage-backed securities market.

ARMOUR Residential REIT to Host Q4 2024 Webcast

On February 11, 2025, ARMOUR Residential REIT announced it will host a real-time webcast for equity analysts to discuss its fourth quarter 2024 operating results on February 13, 2025. The earnings release for this period will be issued after trading closes on February 12, 2025, with the webcast available online and for replay on the company’s website for one year.