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Ellington Residential Mortgage
(NYSE:EARN)
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Rating:52Neutral
Price Target:
$4.50
▲(2.27% Upside)
Action:Reiterated
Date:08/17/26
The score is held back primarily by unstable earnings power and year-to-year volatility (swing to losses and uncertainty around the durability of the outsized 2025 cash flow), partially offset by improved leverage and an exceptionally high dividend yield. Technical indicators are broadly neutral and do not materially improve the outlook.
Positive Factors
Lower Leverage
The substantial reduction in debt relative to equity lowers balance-sheet risk and may improve resilience to mortgage-market volatility, funding pressure, and asset-value changes over the next several quarters.
Negative Factors
Net Loss
The swing to both net and operating losses shows that revenue growth is not currently translating into durable profitability. Persistent costs, financing spreads, hedging results, or asset marks could continue to pressure shareholder returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Lower Leverage
The substantial reduction in debt relative to equity lowers balance-sheet risk and may improve resilience to mortgage-market volatility, funding pressure, and asset-value changes over the next several quarters.
Read all positive factors
Ellington Residential Mortgage (EARN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$168.37M
Dividend Yield21.43%
Average Volume (3M)361.91K
Price to Earnings (P/E)―
Beta (1Y)0.87
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees150
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)-1.01
Shares Outstanding37,583,447
10 Day Avg. Volume366,453
30 Day Avg. Volume361,914
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$5.00Price Target Upside13.64% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.95
Revenue Forecast (FY)$45.23M
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:Nov 17, 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 | 53.99M | 42.57M | 50.67M | 55.35M | -10.25M | 2.17M |
| Gross Profit | 53.99M | 36.36M | 15.88M | 10.09M | -25.07M | -557.00K |
| EBITDA | -30.54M | -8.44M | 7.10M | 4.56M | -27.91M | -6.31M |
| Net Income | -38.85M | -14.45M | 6.59M | 4.56M | -30.20M | -6.31M |
Balance Sheet | ||||||
| Total Assets | 386.93M | 386.93M | 824.09M | 945.69M | 1.05B | 1.60B |
| Cash, Cash Equivalents and Short-Term Investments | 57.73M | 57.73M | 31.84M | 38.53M | 34.82M | 69.03M |
| Total Debt | 220.27M | 220.27M | 562.97M | 729.54M | 842.46M | 1.06B |
| Total Liabilities | 66.83M | 233.10M | 630.37M | 809.45M | 941.22M | 1.44B |
| Stockholders Equity | 153.82M | 153.82M | 193.73M | 136.24M | 112.41M | 154.22M |
Cash Flow | ||||||
| Free Cash Flow | 364.10M | 540.72M | 9.11M | -10.02M | 22.42M | 27.88M |
| Operating Cash Flow | 364.10M | 540.72M | 9.11M | -10.02M | 22.42M | 27.88M |
| Investing Cash Flow | 0.00 | 344.70M | 116.45M | 85.72M | 110.55M | -15.23M |
| Financing Cash Flow | -361.39M | -339.70M | -132.25M | -71.98M | -167.18M | -1.79M |
Ellington Residential Mortgage Technical Analysis
Positive
4.40
Price Trends
4.34
Positive
4.40
Positive
4.48
Negative
Market Momentum
0.03
Negative
54.27
Neutral
72.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EARN, the sentiment is Positive. The current price of 4.4 is above the 20-day moving average (MA) of 4.38, above the 50-day MA of 4.34, and below the 200-day MA of 4.48, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 54.27 is Neutral, neither overbought nor oversold. The STOCH value of 72.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | $216.58M | 5.37 | 10.97% | 20.94% | 12.61% | -3.62% | |
60 Neutral | $243.55M | 23.88 | <0.01% | 29.18% | 138.32% | -27.91% | |
60 Neutral | $246.35M | 8.56 | 8.05% | 21.11% | 0.37% | -28.29% | |
52 Neutral | $168.37M | -4.62 | -21.22% | 21.82% | ― | ― |
* Financial Sector Average
EARN
Ellington Residential Mortgage
4.48
-0.38
-7.78%
PNNT
Pennantpark Investment
3.77
-2.11
-35.86%
SCM
Stellus Capital
8.79
-3.95
-31.03%
TPVG
TriplePoint Venture Growth
5.32
-0.18
-3.29%
NXDT
NexPoint Diversified Real Estate Trust
5.40
2.10
63.54%
Ellington Residential Mortgage Corporate Events
Business Operations and StrategyDividendsFinancial DisclosuresPrivate Placements and Financing
Ellington Residential Mortgage Reports Strong First-Quarter Results
Positive
Aug 12, 2026
For the first fiscal quarter ended June 30, 2026, Ellington Credit Company reported GAAP net income of $12.3 million, or $0.33 per share, and net investment income of $6.1 million, or $0.16 per share, with a net asset value of $4.18 per share afte...
Business Operations and StrategyDividends
Ellington Residential Declares Monthly Common Share Distribution
Positive
Aug 10, 2026
On August 10, 2026, Ellington Credit Company announced that its Board of Trustees had declared a monthly common distribution of $0.08 per share. The payout is scheduled for September 30, 2026 to common shareholders of record as of August 31, 2026,...
Business Operations and StrategyDividends
Ellington Residential Mortgage Declares Monthly Dividend Distribution
Positive
Jul 8, 2026
On July 8, 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 August 31, 2026 to common shareholders of record as of July 31, 2026,...
Executive/Board ChangesShareholder Meetings
Ellington Residential Shareholders Back Trustees, Auditor Ratification
Positive
Jun 25, 2026
On June 25, 2026, Ellington Credit Company held its annual meeting of shareholders, where six trustees were elected to continue serving until the end of their terms or until their successors are chosen. The voting results showed strong shareholder...
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...
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.