Ellington Residential Mortgage (EARN)
NYSE:EARN
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Ellington Residential Mortgage
(NYSE:EARN)
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Rating:60Neutral
Price Target:
$5.50
▲(19.31% Upside)
Action:ReiteratedDate:01/09/26
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.
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.
Read all positive and negative factors
Positive Factors
Negative 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.
Read all positive factors
Ellington Residential Mortgage (EARN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
N/A
Dividend Yield17.91%
Average Volume (3M)475.60K
Price to Earnings (P/E)―
Beta (1Y)0.91
Revenue Growth630.98%
EPS Growth234.98%
CountryUS
Employees150
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.21
Shares Outstanding37,600,000
10 Day Avg. Volume344,707
30 Day Avg. Volume475,602
Financial Highlights & Ratios
PEG Ratio-1.21
Price to Book (P/B)0.93
Price to Sales (P/S)3.55
P/FCF Ratio19.73
Enterprise Value/Market Cap10.00T>
Enterprise Value/Revenue9.25
Enterprise Value/Gross Profit70.10
Enterprise Value/Ebitda-65.27
Forecast
1Y Price Target
$5.50Price Target Upside19.31% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)1.05
Revenue Forecast (FY)$53.06M
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), i...
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 betwee...
Ellington Residential Mortgage Earnings Call Summary
Earnings Call Date:Mar 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 04, 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
48
Neutral
Balance Sheet
60
Neutral
Cash Flow
42
Neutral
| 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
Neutral
4.61
Price Trends
4.69
Negative
4.88
Negative
4.93
Negative
Market Momentum
>-0.01
Negative
54.40
Neutral
72.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EARN, the sentiment is Neutral. The current price of 4.61 is above the 20-day moving average (MA) of 4.45, below the 50-day MA of 4.69, and below the 200-day MA of 4.93, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 54.40 is Neutral, neither overbought nor oversold. The STOCH value of 72.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 | $321.16M | 4.69 | ― | 5.39% | ― | ― | |
60 Neutral | ― | -2.35 | -6.59% | 17.91% | 630.98% | 234.98% | |
58 Neutral | $295.14M | 10.64 | 5.42% | 16.61% | -3.09% | 200.66% | |
55 Neutral | $270.66M | 13.30 | 0.03% | 12.83% | 90.34% | -44.25% | |
52 Neutral | $210.15M | 8.14 | 14.02% | 17.28% | 206.13% | 298.86% |
* Financial Sector Average
EARN
Ellington Residential Mortgage
4.63
0.34
8.00%
SSSS
SuRo Capital
13.01
8.66
198.74%
PNNT
Pennantpark Investment
4.60
-0.91
-16.56%
SCM
Stellus Capital
9.68
-1.57
-13.97%
TPVG
TriplePoint Venture Growth
5.26
0.02
0.31%
NXDT
NexPoint Diversified Real Estate Trust
4.65
1.48
46.60%
Ellington Residential Mortgage Corporate Events
Business Operations and StrategyDividends
Ellington Residential Mortgage Declares Monthly Common Dividend
Positive
Jan 9, 2026
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 u...
Dividends
Ellington Residential Mortgage Declares Monthly Dividend
Positive
Dec 4, 2025
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...
Business Operations and StrategyDividendsFinancial Disclosures
Ellington Residential Mortgage Reports Strong Q2 2025 Results
Positive
Nov 19, 2025
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 m...
Dividends
Ellington Residential Mortgage Declares November Dividend
Positive
Nov 10, 2025
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 reflec...
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.