Chimera Investment (CIM) AI Stock Analysis

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Chimera Investment

(NYSE:CIM)

63Neutral

Chimera Investment's overall score reflects a blend of solid financial performance with strong profit margins and stable cash flows, but concerns about high leverage and recent financial volatility. The stock's attractive valuation and high dividend yield are counterbalanced by technical indicators suggesting potential bearish momentum. The earnings call highlighted strategic growth plans and acquisitions, which provide a slightly positive outlook despite recent GAAP net losses.

Chimera Investment (CIM) vs. S&P 500 (SPY)

Market Cap

$865.87M

Dividend Yield11.87%

Average Volume (3M)730.61K

Price to Earnings (P/E)9.7

Beta (1Y)0.99

Revenue Growth7.13%

EPS Growth64.82%

CountryUS

Employees77

SectorReal Estate

Sector Strength83

IndustryREIT - Mortgage

Share Statistics

EPS (TTM)0.37

Shares Outstanding80,922,570

10 Day Avg. Volume982,308

30 Day Avg. Volume730,609

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)4.14

Price to Cash Flow (P/CF)7.20

P/FCF Ratio0.80

Enterprise Value/Market Cap13.85

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit16.97

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$16.50

Price Target Upside33.71% Upside

Rating ConsensusHold

Number of Analyst Covering2

Chimera Investment Business Overview & Revenue Model

Company DescriptionChimera Investment Corporation operates as a real estate investment trust (REIT) in the United States. The company, through its subsidiaries, invests in a portfolio of mortgage assets, including residential mortgage loans, agency and non-agency residential mortgage-backed securities, agency mortgage-backed securities secured by pools of residential, commercial mortgage loans, and other real estate related securities. It has elected to be taxed as a REIT. In addition, the company invests in investment, non-investment grade, and non-rated classes. The company was incorporated in 2007 and is based in New York, New York.

How the Company Makes MoneyChimera Investment Corporation makes money primarily through the interest income generated from its portfolio of mortgage-backed securities. The company invests in various types of mortgage assets, including agency and non-agency RMBS and CMBS, which provide returns through the collection of interest payments. Additionally, Chimera may engage in hedging activities to manage interest rate risk and enhance yield. The company also benefits from capital appreciation of its investments and may leverage its portfolio to amplify returns. Strategic partnerships and relationships with financial institutions can also play a role in optimizing asset acquisition and management, contributing to overall earnings.

Chimera Investment Financial Statement Overview

Summary

Chimera Investment shows strong gross profit margins and recent improvements in net income. However, historical volatility in revenue and high leverage pose risks, despite stable cash flows.

Income Statement

Positive

Chimera Investment shows strong gross profit margins, with significant improvement in net income and revenue in the latest year. However, past years have shown volatile revenue and profit trends, affecting stability.

Balance Sheet

Neutral

The company has a high debt-to-equity ratio, typical for REITs, which indicates high leverage. While equity has been relatively stable, the potential risk from leverage remains substantial.

Cash Flow

Positive

The cash flow statement indicates consistent free cash flow with recent growth. The operating cash flow has been stable, but the reliance on financing cash flows is a potential concern.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
734.19M	226.02M	432.79M	1.06B	228.84M
	Gross Profit
706.78M	193.40M	380.64M	990.62M	176.30M
	EBIT
648.61M	631.87M	-253.28M	674.52M	89.01M
	EBITDA
648.93M	0.00	-191.80M	674.52M	89.01M
	Net Income Common Stockholders
176.06M	126.10M	-513.07M	670.11M	88.85M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
84.00M	221.68M	11.62B	385.74M	269.09M
	Total Assets
13.12B	12.93B	13.40B	15.41B	17.52B
	Total Debt
10.01B	10.11B	10.61B	11.08B	13.51B
	Net Debt
9.93B	9.89B	10.35B	10.69B	13.24B
	Total Liabilities
10.59B	10.37B	10.74B	11.67B	13.74B
	Stockholders Equity
2.53B	2.56B	2.67B	3.74B	3.78B
Cash Flow		Free Cash Flow
205.67M	213.27M	325.72M	519.18M	257.90M
	Operating Cash Flow
205.67M	213.27M	325.72M	519.18M	257.90M
	Investing Cash Flow
178.22M	551.75M	509.84M	2.55B	8.33B
	Financing Cash Flow
-521.58M	-807.94M	-956.70M	-2.95B	-8.43B

Chimera Investment Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price12.34

Price Trends

50DMA

12.57

Negative

100DMA

13.25

Negative

200DMA

13.73

Negative

Market Momentum

MACD

-0.14

Negative

RSI

55.52

Neutral

STOCH

94.71

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIM, the sentiment is Neutral. The current price of 12.34 is above the 20-day moving average (MA) of 11.54, below the 50-day MA of 12.57, and below the 200-day MA of 13.73, indicating a neutral trend. The MACD of -0.14 indicates Negative momentum. The RSI at 55.52 is Neutral, neither overbought nor oversold. The STOCH value of 94.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CIM.

Chimera Investment Risk Analysis

Chimera Investment disclosed 60 risk factors in its most recent earnings report. Chimera Investment 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 0 New Risks

Chimera Investment Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EFC	65 Neutral	$1.24B	9.76	9.45%	11.79%	11.91%	52.26%
CIM	63 Neutral	$865.87M	9.73	6.92%	11.87%	7.13%	64.82%
MFA	62 Neutral	$997.79M	11.89	6.35%	14.23%	26.34%	79.07%
DX	60 Neutral	$1.19B	16.04	6.01%	13.48%	13.67%	-34.10%
Sector *	60 Neutral	$2.73B	11.44	0.07%	8661.49%	5.94%	-15.68%
FBRT	56 Neutral	$973.54M	14.20	5.07%	12.25%	-6.28%	-49.57%
RC	44 Neutral	$785.25M	―	-19.41%	20.74%	-24.40%	-210.65%

* Real Estate Sector Average

Performance Comparison

CIM

Chimera Investment

12.34

0.87

7.59%

Dynex Capital

12.33

1.98

19.13%

EFC

Ellington Financial

13.03

2.77

27.00%

MFA

MFA Financial

9.82

0.35

3.70%

Ready Capital

4.45

-3.15

-41.45%

FBRT

Franklin BSP Realty Trust

11.38

-0.19

-1.64%

Chimera Investment Earnings Call Summary

Earnings Call Date:Feb 12, 2025

(Q4-2024)

% Change Since: -15.83%|

Next Earnings Date:May 08, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook with notable achievements like the Palisades acquisition and strong demand for new homes, but also faced challenges such as a GAAP net loss in Q4 and housing market difficulties. The sentiment is slightly tilted towards the positive due to strategic acquisitions and plans for diversified growth.

Q4-2024 Updates

Positive Updates

Home Price Appreciation

US home prices rose 4.3% between Q3 2023 and Q3 2024, positively impacting homeowners' equity.

Strong Demand for New Homes

Completed new homes estimated to sell in 2.8 months, indicating strong demand for newly built homes.

Increase in Credit Spreads and Investor Demand

Credit spreads tightened and non-agency RMBS gross issuance nearly doubled from $71 billion in 2023 to $137 billion in 2024.

Palisades Acquisition

Acquisition of Palisades Group, enhancing Chimera's ability to provide third-party investment management and advisory services.

Quarterly Dividend Increase

Chimera increased its quarterly dividend by 12% in 2024.

Positive Full Year Economic Return

Economic return was a positive 4.4% for the full year 2024.

Successful Securitization

Chimera closed its first securitization of 2025, financing $287 million of investor loans with strong demand.

Negative Updates

GAAP Net Loss in Q4 2024

GAAP net loss of $168.3 million or $2.07 per share in Q4 2024.

Negative Economic Return on GAAP Book Value in Q4

Economic return on GAAP book value was negative 10.1% for Q4 2024.

Housing Market Challenges

Sales of previously owned homes declined for the third consecutive year, reaching the lowest level since 1995.

Interest Rate and Yield Curve Impact

10-year treasury rates rose despite Fed rate cuts, and agency MBS spreads widened, negatively impacting GAAP book value.

Increased Transaction Expenses

Transaction expenses increased by $4.7 million in Q4 2024, primarily due to the Palisades acquisition.

Company Guidance

During the fourth quarter and full year 2024 earnings call for Chimera Investment Corporation, several key metrics and strategic plans were discussed. The company reported a GAAP net loss of $168.3 million for the fourth quarter, translating to $2.07 per share, but achieved a GAAP net income of $90.3 million for the full year, equivalent to $1.10 per share. The GAAP book value at the end of the fourth quarter was $19.72 per share. Despite a negative economic return on GAAP book value of 10.1% for the quarter, the full-year economic return was positive at 4.4%, incorporating $1.42 in dividends for 2024. The company executed strategic portfolio adjustments, including deploying $209 million from equity and debt raises into floating rate agency CMOs, residential transition loans, and non-QM loans. They also closed the acquisition of the Palisades Group, expanding their capabilities in residential real estate credit and aiming to increase fee-based income. Looking forward to 2025, Chimera plans to diversify its portfolio, enhance liquidity, and potentially increase agency RMBS holdings, while also exploring opportunities in mortgage servicing rights to hedge against loan portfolio risks. The company's total leverage stood at 4 to 1, with recourse leverage at 1.2 to 1, and they ended the year with $610 million in cash and unencumbered assets.

Chimera Investment Corporate Events

Executive/Board Changes

Chimera Investment Board Member Resigns Abruptly

Neutral

Apr 11, 2025

On April 9, 2025, Sandra Bell, an independent member of the board of directors at Chimera Investment Corporation, announced her immediate resignation. Her departure was not due to any disagreements with the company’s operations, policies, or practices. Following her resignation, the board reduced its size by one director, effective April 11, 2025.

Spark’s Take on CIM Stock

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

Chimera Investment Corporation has a solid financial foundation, with strong profit margins and stable cash flows. However, high leverage and recent net losses present risks. The stock shows bearish technical indicators, but attractive valuation metrics, such as a low P/E ratio and high dividend yield, offer potential investment appeal. Strategic growth initiatives and positive corporate events further support a moderately positive outlook.

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

Executive/Board Changes

Chimera Investment Announces Officer Departure

Neutral

Apr 8, 2025

On April 2, 2025, Chimera Investment Corporation announced that Dan Thakkar will step down from his role as Chief Credit & Risk Officer, effective July 1, 2025. The departure is amicable and not due to any disagreements with the company’s operations or policies. Thakkar will receive benefits outlined in his employment agreement, including additional COBRA premium reimbursement.

Spark’s Take on CIM Stock

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

Chimera Investment’s stock score reflects stable financial performance with risks due to high leverage and past income volatility. Technical indicators suggest potential weakness in the short term, while valuation and dividend yield provide attractive investment propositions. The recent earnings call highlights strategic growth plans that could improve future performance.

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

Dividends

Chimera Investment Declares Q1 2025 Cash Dividend

Positive

Mar 20, 2025

On March 20, 2025, Chimera Investment Corporation announced the declaration of its first quarter cash dividend of $0.37 per common share. The dividend is set to be paid on April 30, 2025, to common stockholders of record as of March 31, 2025. This announcement reflects Chimera’s ongoing commitment to providing returns to its shareholders and may impact its market positioning by reinforcing investor confidence.

Business Operations and Strategy

Chimera Investment Shares Insights at RBC Conference

Neutral

Mar 3, 2025

On March 3, 2025, Chimera Investment Corporation participated in the RBC Capital Markets Global Financial Institutions Conference, where it made available an investor presentation. The presentation, which was posted on the company’s website, provides insights into Chimera’s operations and strategic positioning, although it is not considered ‘filed’ for regulatory purposes.

Dividends

Chimera Investment Declares Q1 2025 Preferred Dividends

Positive

Feb 11, 2025

On February 11, 2025, Chimera Investment Corporation announced the declaration of its first quarter dividends for several series of its preferred stocks, with payments scheduled for March 31, 2025. The dividends declared include $0.50 per share for Series A, $0.6488 per share for Series B, $0.484375 per share for Series C, and $0.6231 per share for Series D. This announcement highlights Chimera’s ongoing commitment to providing returns to its preferred shareholders, signaling stability and potential attractiveness to investors seeking consistent income in the real estate investment sector.

Private Placements and FinancingBusiness Operations and Strategy

Chimera Investment Announces $287.7 Million Securitization

Positive

Feb 3, 2025

On January 31, 2025, Chimera Investment Corporation announced the sponsorship of CIM 2025-I1, a $287.7 million securitization of residential mortgage investor loans, with securities sold in a private placement to institutional investors. The securitization, rated by Fitch and Morningstar DBRS, reflects Chimera’s strategic move to enhance its real estate investment trust operations and strengthen its industry positioning by retaining subordinate interests and managing the assets through its subsidiary, Palisades Advisory Services.

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.