Ellington Residential Mortgage (EARN)
NYSE:EARN
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Ellington Residential Mortgage
(NYSE:EARN)
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Rating:51Neutral
Price Target:
$4.50
▼(-4.66% Downside)
Action:Reiterated
Date:06/09/26
Overall score reflects primarily weak and volatile profitability (recent losses) despite improved leverage and unusually strong but potentially non-recurring cash flow. Technical indicators are broadly neutral, valuation is split between a negative P/E and a very high dividend yield, and corporate updates are somewhat supportive via continued distributions and longer-term financing but tempered by reported losses.
Positive Factors
Improved leverage
Leverage reduction is a durable improvement: a materially lower debt-to-equity ratio cuts funding and liquidity vulnerability, increases resilience to rate shocks, and gives management more flexibility to allocate capital or rebuild the portfolio over the coming months without immediate refinancing pressure.
Negative Factors
Profitability deterioration
A swing to a GAAP net loss and negative operating profit undermines core earnings power. Persistent or recurring losses erode NAV, limit retained earnings available to support dividends, and increase dependence on mark-to-market or nonrecurring gains to sustain shareholder distributions.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved leverage
Leverage reduction is a durable improvement: a materially lower debt-to-equity ratio cuts funding and liquidity vulnerability, increases resilience to rate shocks, and gives management more flexibility to allocate capital or rebuild the portfolio over the coming months without immediate refinancing pressure.
Read all positive factors
Ellington Residential Mortgage (EARN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$168.75M
Dividend Yield17.91%
Average Volume (3M)372.75K
Price to Earnings (P/E)―
Beta (1Y)0.93
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees150
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)-0.13
Shares Outstanding37,583,447
10 Day Avg. Volume300,438
30 Day Avg. Volume372,752
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)1.08
Price to Sales (P/S)3.91
P/FCF Ratio0.31
Enterprise Value/Market Cap1.96
Enterprise Value/Revenue9.30
Enterprise Value/Gross Profit70.53
Enterprise Value/Ebitda-65.67
Forecast
1Y Price Target
$5.50Price Target Upside16.53% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.96
Revenue Forecast (FY)$55.36M
Ellington Residential Mortgage Business Overview & Revenue Model
Company Description
Ellington Residential Mortgage REIT functions as a real estate investment trust (REIT), with its core business focused on the acquisition, investment, and oversight of assets tied to residential mortgages and real estate. The company's holdings pr...
How the Company Makes Money
EARN makes money primarily by earning net interest income on a leveraged portfolio of residential mortgage assets. The core mechanism is to (1) purchase residential mortgage-related securities (commonly agency RMBS, whose principal and interest ar...
Ellington Residential Mortgage Earnings Call Summary
Earnings Call Date:Mar 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Neutral
The call conveyed a mixed but pragmatic tone: management acknowledged significant near-term losses driven by severe CLO equity market stress (NAV decline, GAAP loss, weakened yields), but emphasized effective downside mitigation through active trading, a strategic shift into mezzanine debt, realized gains from redemptions and calls, substantial credit hedges (~$175M, ~90% of NAV), portfolio expansion and liquidity, and tactical plans (potential unsecured debt issuance) to deploy into dislocations. The positives around risk management, realized gains, and positioning partially offset the material mark-to-market losses and ongoing market headwinds.Positive Updates
Limited NAV Losses and Relative Outperformance
Ellington limited fund losses to approximately 9% of NAV in Q4, outperforming the overall peer set in a very challenging CLO equity market.
Negative Updates
GAAP Net Loss and NAV Decline
Reported GAAP net loss of $0.56 per share for Q4. NAV-based total return for the quarter was negative 9.1% and the fund incurred a net quarterly loss driven by significant mark-to-market losses on CLO equity.
Read all updates
Q4-2025 Updates
Positive
Negative
Limited NAV Losses and Relative Outperformance
Ellington limited fund losses to approximately 9% of NAV in Q4, outperforming the overall peer set in a very challenging CLO equity market.
Read all positive updates
Company Guidance
Management's guidance was to rebuild net investment income and NAV by redeploying capital into defensive CLO mezzanine debt (about 70% of post‑conversion purchases and >75% of 2026 purchases to date) while selectively adding secondary CLO equity, maintaining large credit hedges (≈$175M of high‑yield CDX equivalents, ~90% of NAV, with an estimated drag of ~1–2% of NAV p.a.), and potentially issuing long‑term unsecured debt to add dry powder; they noted the CLO portfolio expanded nearly 50% to ~$370M by year‑end after 218 trades in nine months ($272M purchases, $63M sales), including 47 trades in Q4 (Q4 purchases $66M: 60% debt/40% equity; Q4 sales $19M), the proportion of debt in the CLO portfolio rose to just under 50% from ~33% at conversion, CLO equity represented 52% of holdings (European CLOs 12%), weighted average GAAP yield was 13.7% (down from 15.5%), Q4 GAAP net loss was $0.56/share, NAV was $5.19 at 12/31 (down to $5.04 at 1/31) with a Q4 NAV total return of −9.1%, cash was $24.3M, weighted average loan maturity 4.3 years, and >40% of U.S. CLOs are scheduled to exit non‑call before year‑end 2026.Ellington Residential Mortgage Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
49
Neutral
Cash Flow
58
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 35.60M | 42.57M | 50.67M | 55.35M | -10.25M | 2.17M |
| Gross Profit | 4.70M | 36.36M | 15.88M | 10.09M | -25.07M | -557.00K |
| EBITDA | -5.04M | -8.44M | 7.10M | 4.56M | -27.91M | -6.31M |
| Net Income | -5.25M | -14.45M | 6.59M | 4.56M | -30.20M | -6.31M |
Balance Sheet | ||||||
| Total Assets | 783.56M | 386.93M | 824.09M | 945.69M | 1.05B | 1.60B |
| Cash, Cash Equivalents and Short-Term Investments | 17.38M | 57.73M | 31.84M | 38.53M | 34.82M | 69.03M |
| Total Debt | 517.54M | 220.27M | 562.97M | 729.54M | 842.46M | 1.06B |
| Total Liabilities | 555.06M | 233.10M | 630.37M | 809.45M | 941.22M | 1.44B |
| Stockholders Equity | 228.50M | 153.82M | 193.73M | 136.24M | 112.41M | 154.22M |
Cash Flow | ||||||
| Free Cash Flow | 19.53M | 540.72M | 9.11M | -10.02M | 22.42M | 27.88M |
| Operating Cash Flow | 19.53M | 540.72M | 9.11M | -10.02M | 22.42M | 27.88M |
| Investing Cash Flow | 48.66M | 344.70M | 116.45M | 85.72M | 110.55M | -15.23M |
| Financing Cash Flow | -73.25M | -339.70M | -132.25M | -71.98M | -167.18M | -1.79M |
Ellington Residential Mortgage Technical Analysis
Negative
4.72
Price Trends
4.63
Negative
4.63
Negative
4.71
Negative
Market Momentum
-0.02
Positive
38.68
Neutral
2.19
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EARN, the sentiment is Negative. The current price of 4.72 is above the 20-day moving average (MA) of 4.69, above the 50-day MA of 4.63, and above the 200-day MA of 4.71, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 38.68 is Neutral, neither overbought nor oversold. The STOCH value of 2.19 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EARN.
Ellington Residential Mortgage Risk Analysis
Ellington Residential Mortgage disclosed 108 risk factors in its most recent earnings report. Ellington Residential 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 0 New Risks
Ellington Residential Mortgage Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $353.51M | 1.61 | 80.64% | 5.39% | ― | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
53 Neutral | $257.34M | 10.74 | ― | 12.83% | 6.21% | -42.00% | |
51 Neutral | $168.75M | -4.34 | -20.38% | 17.91% | ― | ― | |
50 Neutral | $241.60M | 17.18 | 0.01% | 16.61% | 122.81% | 43.00% | |
49 Neutral | $218.83M | 4.86 | 12.12% | 17.28% | 18.91% | 14.29% |
* Financial Sector Average
EARN
Ellington Residential Mortgage
4.49
-0.23
-4.93%
SSSS
SuRo Capital
13.02
6.08
87.50%
PNNT
Pennantpark Investment
3.71
-1.87
-33.51%
SCM
Stellus Capital
8.80
-3.20
-26.64%
TPVG
TriplePoint Venture Growth
5.13
-0.62
-10.74%
NXDT
NexPoint Diversified Real Estate Trust
4.51
1.21
36.63%
Ellington Residential Mortgage Corporate Events
Dividends
Ellington Residential Mortgage Declares Monthly Common Dividend
Positive
Jun 8, 2026
On June 8, 2026, Ellington Credit Company announced that its Board of Trustees declared a monthly common dividend of $0.08 per share. The dividend will be paid on July 31, 2026, to common shareholders of record as of June 30, 2026, signaling conti...
Business Operations and StrategyDividendsFinancial DisclosuresPrivate Placements and Financing
Ellington Residential Reports Q1 Loss but Strengthened Capital
Negative
May 20, 2026
Ellington Credit Company reported results for the quarter ended March 31, 2026, with net asset value per share at $4.09 including distributions of $0.24 per share and a GAAP net loss of $32.3 million, or $0.86 per share. The firm’s net inves...
Dividends
Ellington Residential Mortgage Declares Monthly Common Dividend
Positive
May 11, 2026
On May 7, 2026, Ellington Credit Company announced that its Board of Trustees declared a monthly common dividend of $0.08 per share, to be paid on June 30, 2026, to shareholders of record as of May 29, 2026. The decision reflects the fund’s ...
Dividends
Ellington Residential Mortgage Declares Monthly Common Dividend
Positive
Apr 8, 2026
On April 7, 2026, Ellington Credit Company announced that its Board of Trustees had declared a monthly common dividend of $0.08 per share. The dividend is scheduled to be paid on May 29, 2026 to common shareholders of record as of April 30, 2026, ...
Private Placements and Financing
Ellington Residential Mortgage Completes $50 Million Notes Offering
Positive
Mar 31, 2026
On March 30, 2026, Ellington Credit Company closed a previously announced public offering of $50 million of 8.50% Notes due 2031, with underwriters granted a 30-day option to purchase up to an additional $7.5 million. The notes, expected to list o...
Business Operations and StrategyPrivate Placements and Financing
Ellington Residential Mortgage Announces New Unsecured Notes Offering
Positive
Mar 26, 2026
On March 25, 2026, Ellington Credit Company entered into an underwriting agreement for a $50 million issuance of unsecured 8.50% notes due 2031, with an additional $7.5 million overallotment option for underwriters. The BBB-rated notes are expecte...
Dividends
Ellington Residential Mortgage Declares Monthly Common Dividend
Positive
Mar 9, 2026
On March 9, 2026, Ellington Credit Company announced that its Board of Trustees declared a monthly common dividend of $0.08 per share for shareholders of its NYSE-listed closed-end fund. The dividend will be paid on April 30, 2026 to common shareh...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.