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Cherry Hill Mortgage Investment (CHMI)
:CHMI
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Cherry Hill Mortgage
(NYSE:CHMI)
Rating:50Neutral
Price Target:
$3.00
▲( 0.67% Upside)
Cherry Hill Mortgage (CHMI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$99.11M
Dividend Yield20.13%
Average Volume (3M)254.12K
Price to Earnings (P/E)43.8
Beta (1Y)1.03
Revenue Growth0.33%
EPS Growth-37.48%
CountryUS
Employees12
SectorReal Estate
Sector Strength64
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.17
Shares Outstanding32,658,447
10 Day Avg. Volume214,597
30 Day Avg. Volume254,124
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)0.43
Price to Sales (P/S)0.00
P/FCF Ratio6.68
Enterprise Value/Market Cap2.04
Enterprise Value/Revenue1.40
Enterprise Value/Gross Profit13.35
Enterprise Value/Ebitda-662.09
Forecast
1Y Price Target
$4.00Price Target Upside34.23% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Cherry Hill Mortgage Business Overview & Revenue Model
Company DescriptionCherry Hill Mortgage Investment Corporation, a residential real estate finance company, acquires, invests in, and manages residential mortgage assets in the United States. The company operates through Investments in RMBS (residential mortgage-backed securities), Investments in Servicing Related Assets, and All Other segments. It manages a portfolio of servicing related assets and RMBS. Cherry Hill Mortgage Investment Corporation qualifies as a real estate investment trust for federal income tax purposes. The company generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Cherry Hill Mortgage Investment Corporation was incorporated in 2012 and is based in Farmingdale, New Jersey.
How the Company Makes MoneyCherry Hill Mortgage Investment Corporation makes money through a variety of revenue streams centered on its investments in mortgage-related assets. The company derives income from the interest payments on residential mortgage-backed securities (RMBS) it holds, which are pools of mortgage loans packaged together and sold as securities. Another significant source of revenue is the mortgage servicing rights (MSRs) it owns. MSRs allow the company to earn fees from servicing the underlying mortgage loans, including collecting principal and interest payments from borrowers and managing escrow accounts. Cherry Hill Mortgage also engages in hedging activities to manage interest rate risk, which can impact its earnings. The company's ability to generate income is influenced by factors such as interest rate fluctuations, housing market conditions, and the credit performance of the underlying mortgages.
Cherry Hill Mortgage Financial Statement Overview
Summary
Cherry Hill Mortgage presents a mixed financial picture. The company's income statement shows volatility with negative revenue figures and operational inefficiencies. The balance sheet highlights leverage concerns with high debt levels. Cash flow challenges persist, with negative free cash flow impacting liquidity. The company needs to stabilize its revenue stream and improve operational efficiency to strengthen its financial health.Income Statement
Cherry Hill Mortgage's income statement shows significant volatility and negative revenue figures in recent years. The company's revenue growth rate is erratic, with a significant decline in total revenue from previous years. Although there's a positive net income in 2024, other profitability metrics like gross profit margin and EBIT margin are negative, indicating operational inefficiencies.35
Negative
Balance Sheet
The balance sheet reflects a moderate financial position with a high debt-to-equity ratio, suggesting potential leverage risks. The equity ratio shows a moderate level of equity financing. Return on equity is positive for 2024, indicating some profitability, but the overall leverage remains a concern.50
Neutral
Cash Flow
Cash flow analysis reveals inconsistent operating cash flows with negative free cash flow in 2024, highlighting cash management challenges. The free cash flow to net income ratio is negative, indicating that net income is not translating into free cash flow, which could affect liquidity and operational flexibility.40
Negative
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 15.18M | 34.58M | -9.95M | 40.19M | 28.14M | -57.32M | Gross Profit |
| 15.18M | 34.58M | -21.20M | 28.36M | 14.51M | -114.65M | EBIT |
| 0.00 | 0.00 | -34.93M | 44.82M | 13.06M | -71.00M | EBITDA |
| 0.00 | 0.00 | -9.19M | -450.00K | 13.06M | 979.00K | Net Income Common Stockholders |
| -6.71M | 11.97M | -34.79M | 21.74M | 12.28M | -53.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 0.00 | 0.00 | 72.39M | 337.06M | 1.02B | 1.31B | Total Assets |
| 1.45B | 1.49B | 1.39B | 1.41B | 1.30B | 1.59B | Total Debt |
| 149.30M | 151.23M | 1.10B | 183.89M | 145.27M | 111.38M | Net Debt |
| 102.01M | 104.91M | 1.05B | 126.57M | 81.35M | 27.49M | Total Liabilities |
| 1.22B | 1.26B | 1.13B | 1.14B | 1.02B | 1.28B | Stockholders Equity |
| 226.58M | 230.34M | 255.48M | 262.04M | 275.87M | 310.17M |
| Cash Flow | Free Cash Flow | ||||
| 15.05M | -4.69M | 40.66M | 21.88M | -7.37M | 8.24M | Operating Cash Flow |
| 15.04M | -4.69M | 40.66M | 59.91M | 48.01M | 61.20M | Investing Cash Flow |
| -66.32M | -141.33M | -104.05M | -128.20M | 166.52M | 1.26B | Financing Cash Flow |
| 47.82M | 147.46M | 67.17M | 57.07M | -267.97M | -1.28B |
Cherry Hill Mortgage Technical Analysis
Negative
2.98
Price Trends
3.02
Negative
3.05
Negative
2.96
Positive
Market Momentum
0.02
Positive
49.31
Neutral
18.89
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHMI, the sentiment is Negative. The current price of 2.98 is below the 20-day moving average (MA) of 3.01, below the 50-day MA of 3.02, and above the 200-day MA of 2.96, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 49.31 is Neutral, neither overbought nor oversold. The STOCH value of 18.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CHMI.
Cherry Hill Mortgage Risk Analysis
Cherry Hill Mortgage disclosed 4 risk factors in its most recent earnings report. Cherry Hill Mortgage reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
Effects of Spreads on our Assets Q4, 2024
2.
Impact of Changes in Market Interest Rates on Our Assets Q4, 2024
3.
Credit Risk Q4, 2024
Cherry Hill Mortgage Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $58.05M | 10.58 | 12.70% | 9.11% | -5.84% | -3.44% | |
60 Neutral | $2.76B | 10.33 | 0.49% | 8508.28% | 5.95% | -17.56% | |
57 Neutral | $133.02M | 62.16 | 5.47% | ― | -13.68% | -53.53% | |
56 Neutral | $127.67M | 12.26 | 6.38% | 13.33% | -10.98% | -35.75% | |
50 Neutral | $99.11M | 43.78 | -2.83% | 20.13% | 0.33% | -37.48% | |
49 Neutral | $114.72M | ― | -20.41% | 8.44% | -26.87% | -189.15% | |
47 Neutral | $43.53M | ― | -20.80% | 31.52% | -55.51% | -493.18% |
* Real Estate Sector Average
Performance Comparison
CHMI
Cherry Hill Mortgage
2.98
-0.09
-2.93%
LOAN
Manhattan Bridge Capital
5.15
0.19
3.83%
ACR
ACRES Commercial Realty
18.12
5.31
41.45%
LFT
Lument Finance Trust
2.44
0.32
15.09%
SACH
Sachem Capital
0.92
-1.85
-66.79%
GPMT
Granite Point Mortgage
2.38
-0.48
-16.78%
Cherry Hill Mortgage Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 1.36%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view of the company's performance with both positive aspects such as strong liquidity and reduced expenses, and negative outcomes including a GAAP net loss and decreased book value per share. The anticipation of lower future earnings available for distribution adds to the cautious outlook.Q1-2025 Updates
Positive Updates
Solid Liquidity Profile
Ended the quarter with $47 million of unrestricted cash on the balance sheet, maintaining a solid liquidity profile.
Reduced Operating Expenses
Operating expenses declined quarter-over-quarter due to the elimination of the management fee. This is part of the company's strategy to improve both expense ratio and capital structure over time.
RMBS Portfolio Performance
RMBS portfolio's weighted average three-month CPR was approximately 5.8%, with a net interest spread of 3.55%, higher than the prior quarter.
Negative Updates
GAAP Net Loss
Generated a GAAP net loss applicable to common stockholders of $0.29 per diluted share for the first quarter.
Book Value Decline
Book value per common share finished the quarter at $3.58 compared to $3.82 on December 31, marking a decrease.
Decline in NAV
NAV was down approximately $7.5 million, or 3.2% relative to December 31.
Anticipated Lower EAD
Earnings available for distribution (EAD) is expected to be lower moving forward due to the maturity of a larger hedge.
Company Guidance
During Cherry Hill Mortgage Investment Corporation's first quarter 2025 earnings call, management provided guidance amidst a volatile market environment influenced by changes in policy and economic uncertainty. The company reported a GAAP net loss applicable to common stockholders of $0.29 per diluted share, with book value per common share decreasing to $3.58 from $3.82 at the end of December 2024. The MSR portfolio had a UPB of $17 billion and a market value of approximately $227 million, while the RMBS portfolio stood at approximately $733 million. The RMBS portfolio's weighted average three-month CPR was 5.8%, slightly up from 5.7% in the previous quarter. Financial leverage remained consistent at 5.2x, and unrestricted cash on the balance sheet was $47 million. The company completed its first full quarter as an internally managed mortgage REIT, with operating expenses declining due to the elimination of the management fee. Looking forward, management expects continued market volatility and plans to focus on deploying capital into Agency RMBS and select MSRs, maintaining strong liquidity and prudent leverage.Cherry Hill Mortgage Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Cherry Hill Mortgage Expands Board and Adopts Severance Plan
Neutral
Mar 12, 2025
On March 11, 2025, Cherry Hill Mortgage Investment Corporation expanded its Board of Directors from four to five members by appointing Dale S. Hoffman as a new director. Hoffman’s appointment, which includes roles on the compensation and nominating and corporate governance committees, is set to last until the 2025 annual stockholders meeting. The following day, March 12, 2025, the company adopted an Executive Severance Plan, effective immediately, covering key executives such as the CEO and CFO. The plan outlines conditions for severance payments in the event of qualifying terminations, including specific financial benefits and restrictive covenants.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.