Ellington Residential Mortgage (EARN) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: 17.91%
• Average Volume (3M): 292.27K
• Price to Earnings (P/E): 10.5
• Beta (1Y): 0.89
• Revenue Growth: 630.98%
• EPS Growth: 234.98%
• Country: US
• Employees: 150
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.23
• Shares Outstanding: 37,600,000
• 10 Day Avg. Volume: 293,941
• 30 Day Avg. Volume: 292,269
• PEG Ratio: -1.21
• Price to Book (P/B): 0.93
• Price to Sales (P/S): 2.56
• P/FCF Ratio: 19.73
• Enterprise Value/Market Cap: 10.00T>
• Enterprise Value/Revenue: 10.67
• Enterprise Value/Gross Profit: 80.93
• Enterprise Value/Ebitda: -75.35
• 1Y Price Target: $5.63
• Price Target Upside: 3.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: $5.50 ▲(1.66% Upside)

The score is held back primarily by inconsistent profitability and weak/negative free cash flow, despite balance-sheet improvement (zero debt) and constructive technical momentum. Valuation is supported by a moderate P/E and very high dividend yield, with recent corporate updates reinforcing dividend commitment.

Positive Factors

Improved Balance Sheet (Zero Debt)

Reporting no total debt in 2024 materially reduces refinancing and liquidity risk for an asset manager focused on mortgage assets. This strengthens financial flexibility to manage portfolio repositioning, absorb mark-to-market swings, and support distributions over the next several months.

Dividend Commitment & Coverage

Management’s repeated monthly dividend declarations and reported full coverage from net investment income indicate a governance preference for steady payouts and that recent portfolio changes are generating distributable income. That makes dividends more durable in the near-to-medium term.

Active Portfolio Management and Scale

Significant trading activity and portfolio growth demonstrate active portfolio management and market access. The ability to reposition holdings, trade frequently, and mix mezzanine/equity tranches supports yield enhancement and downside protection as a structural capability.

Negative Factors

Weak and Negative Free Cash Flow

Persistent negative free cash flow and erratic operating cash flows undermine self-funded dividend sustainability and limit buffer against market stress. Over months this can force asset sales or external financing, reducing strategic flexibility and increasing execution risk.

Inconsistent Profitability and Revenue Volatility

Historic swings from negative revenue to recovery and fluctuating net margins reflect earnings instability tied to market valuation changes and trading outcomes. That makes future distributable income and NAV performance less predictable for income investors over the next several months.

Exposure to Asset-Value and Spread Risk

With business anchored in RMBS/CLO exposures, moderate leverage and funding structure mean credit-spread widening or rate moves could materially affect NAV and earnings. Even absent formal debt, portfolio funding and mark-to-market risk can amplify losses and pressure distributions.

Ellington Residential Mortgage Business Overview & Revenue Model

Company Description

Ellington Residential Mortgage REIT, a real estate investment trust, specializes in acquiring, investing in, and managing residential mortgage-and real estate-related assets. It acquires and manages residential mortgage-backed securities (RMBS), including agency pools and agency collateralized mortgage obligations (CMOs); and non-agency RMBS comprising non-agency CMOs, such as investment grade and non-investment grade. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. Ellington Residential Mortgage REIT was incorporated in 2012 and is based in Old Greenwich, Connecticut.

How the Company Makes Money

Ellington Residential Mortgage generates revenue primarily through the interest income earned from its portfolio of residential mortgage-backed securities and other mortgage-related assets. The company's revenue model is based on the spread between the income generated by its assets and the cost of financing those assets, which often involves leveraging its investments through repurchase agreements and other forms of debt. Key revenue streams include interest income, gains from the sale of mortgage securities, and management fees. Additionally, strategic partnerships with financial institutions and investment firms may enhance EARN's access to capital and investment opportunities, further contributing to its earnings.

Ellington Residential Mortgage Financial Statement Overview

Summary

Ellington Residential Mortgage shows mixed financial performance. While operational efficiency improved and leverage reduced, revenue and cash flow trends remain inconsistent, highlighting underlying volatility. The balance sheet reflects improved stability with zero debt in 2024, but cash flow management needs improvement.

Income Statement

Ellington Residential Mortgage experiences inconsistent revenue trends, with a notable negative revenue in 2023 but a strong recovery in 2024. The gross profit margin remains steady at 100% in 2024 due to the nature of revenue and cost structure. However, net profit margins have fluctuated significantly, reflecting operational volatility. EBIT margins improved in 2024, highlighting operational efficiency gains, but overall profitability remains inconsistent.

Balance Sheet

The company's balance sheet shows a positive equity position, with stockholders' equity increasing over the years. The absence of total debt in 2024 improves the debt-to-equity ratio, enhancing financial stability. However, the equity ratio indicates moderate leverage, suggesting some risk if asset values fluctuate. Overall, the balance sheet reflects a moderate risk profile with a positive trend towards reducing leverage.

Cash Flow

Ellington Residential Mortgage has shown erratic cash flow trends, with operating cash flow fluctuating and negative free cash flow in 2023 and 2024. The financing cash flow indicates significant outflows, raising concerns about sustainability. The absence of consistent positive free cash flow suggests challenges in generating sufficient cash from operations. The cash flow management needs improvement to ensure long-term financial health.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	35.60M	50.67M	55.35M	-10.25M	2.17M	35.90M
Gross Profit	4.70M	15.88M	10.09M	-25.07M	-557.00K	25.94M
EBITDA	-5.04M	7.10M	4.56M	-30.20M	-6.31M	20.11M
Net Income	-5.25M	6.59M	4.56M	-30.20M	-6.31M	20.11M
Balance Sheet
Total Assets	783.56M	824.09M	945.69M	1.05B	1.60B	1.19B
Cash, Cash Equivalents and Short-Term Investments	17.38M	31.84M	38.53M	34.82M	69.03M	58.17M
Total Debt	517.54M	562.97M	729.54M	842.46M	1.06B	1.02B
Total Liabilities	555.06M	630.37M	809.45M	941.22M	1.44B	1.03B
Stockholders Equity	228.50M	193.73M	136.24M	112.41M	154.22M	166.40M
Cash Flow
Free Cash Flow	19.53M	9.11M	-10.02M	22.42M	27.88M	24.37M
Operating Cash Flow	19.53M	9.11M	-10.02M	22.42M	27.88M	24.37M
Investing Cash Flow	48.66M	116.45M	85.72M	110.55M	-15.23M	304.06M
Financing Cash Flow	-73.25M	-132.25M	-71.98M	-167.18M	-1.79M	-305.61M

Ellington Residential Mortgage Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 5.41 is above the 20-day moving average (MA) of 5.26, above the 50-day MA of 5.22, and above the 200-day MA of 5.19, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 61.09 is Neutral, neither overbought nor oversold. The STOCH value of 72.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EARN.

Ellington Residential Mortgage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TPVG	69 Neutral	$264.21M	7.89	9.43%	17.28%	206.13%	298.86%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SSSS	65 Neutral	$236.87M	3.89	35.45%	5.39%	―	―
EARN	60 Neutral	―	10.46	9.66%	17.91%	630.98%	234.98%
SCM	60 Neutral	$378.92M	12.05	8.20%	12.83%	90.34%	-44.25%
PNNT	57 Neutral	$393.08M	12.15	6.83%	16.61%	-3.09%	200.66%

Ellington Residential Mortgage Corporate Events

Ellington Residential Mortgage Declares Monthly Common Dividend

On January 8, 2026, Ellington Credit Company announced that its Board of Trustees had declared a monthly common dividend of $0.08 per share, payable on February 27, 2026, to shareholders of record as of January 30, 2026. The dividend declaration underscores the fund’s continued focus on delivering current income to investors from its portfolio of corporate CLO investments, and signals ongoing confidence by the board in the fund’s cash-generation ability and income-distribution strategy.

The most recent analyst rating on (EARN) stock is a Buy with a $6.00 price target. To see the full list of analyst forecasts on Ellington Residential Mortgage stock, see the EARN Stock Forecast page.

Ellington Residential Mortgage Declares Monthly Dividend

On December 4, 2025, Ellington Credit Company announced that its Board of Trustees declared a monthly dividend of $0.08 per share, which will be payable on January 30, 2026, to shareholders of record as of December 31, 2025. This decision reflects the company’s ongoing commitment to providing attractive yields and risk-adjusted returns, leveraging its expertise in portfolio management and credit analysis.

The most recent analyst rating on (EARN) stock is a Buy with a $6.50 price target. To see the full list of analyst forecasts on Ellington Residential Mortgage stock, see the EARN Stock Forecast page.

Ellington Residential Mortgage Reports Strong Q2 2025 Results

Ellington Credit Company announced its financial results for the second fiscal quarter ending September 30, 2025. The company reported a net asset value per share of $5.99, with a GAAP net income of $4.3 million and net investment income of $8.5 million. The company’s CLO portfolio grew to $379.6 million, with significant trading activity that included 92 trades. The management highlighted the full dividend coverage achieved from net investment income and emphasized their strategic portfolio repositioning to enhance yields and protect against downside risks. The balanced mix of mezzanine and equity tranches, along with a credit hedging portfolio, positions the company for potential outperformance as market conditions evolve.

The most recent analyst rating on (EARN) stock is a Hold with a $5.25 price target. To see the full list of analyst forecasts on Ellington Residential Mortgage stock, see the EARN Stock Forecast page.

Ellington Residential Mortgage Declares November Dividend

On November 10, 2025, Ellington Credit Company announced that its Board of Trustees declared a monthly dividend of $0.08 per share, which will be payable on December 31, 2025, to shareholders of record as of November 28, 2025. This decision reflects the company’s ongoing commitment to providing returns to its investors, leveraging its expertise in managing collateralized loan obligations, and maintaining its position in the financial market.

The most recent analyst rating on (EARN) stock is a Hold with a $5.25 price target. To see the full list of analyst forecasts on Ellington Residential Mortgage stock, see the EARN Stock Forecast page.