Ellington Financial (EFC) AI Stock Analysis

• Market Cap: $1.38B
• Dividend Yield: 11.28%
• Average Volume (3M): 1.26M
• Price to Earnings (P/E): 11.4
• Beta (1Y): 0.59
• Revenue Growth: 20.32%
• EPS Growth: 1.58%
• Country: US
• Employees: 400
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): 0.47
• Shares Outstanding: 99,893,890
• 10 Day Avg. Volume: 1,266,300
• 30 Day Avg. Volume: 1,257,602
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 11.77
• Enterprise Value/Revenue: 45.46
• Enterprise Value/Gross Profit: 48.79
• Enterprise Value/Ebitda: 40.89
• 1Y Price Target: $14.38
• Price Target Upside: 3.98% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 69 Neutral
• Price Target: $14.50 ▲(4.84% Upside)

Ellington Financial's overall score reflects a mixed financial performance with significant revenue and cash flow volatility. Positive technical indicators and attractive valuation metrics are offset by concerns highlighted in the earnings call, such as unrealized losses and a nonperforming asset. The company's strong dividend yield and positive market momentum provide some support to the score.

Positive Factors

Financial Performance

Ellington Financial's core earnings exceeded the dividend, indicating strong financial health and the potential for continued dividend over-coverage.

Risk Management

The company has successfully navigated volatile markets with strategic hedges and securitizations, showcasing best-in-class risk management.

Stock Valuation

Ellington Financial shares are considered undervalued compared to peers, with an expectation of price appreciation and a substantial dividend yield.

Negative Factors

Earnings Estimate

The reported book value per share decreased, leading to a lowered EPS estimate for 2025.

Ellington Financial Business Overview & Revenue Model

Company Description

Ellington Financial Inc., through its subsidiary, Ellington Financial Operating Partnership LLC, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States. The company acquires and manages residential mortgage-backed securities (RMBS) backed by prime jumbo, Alt-A, manufactured housing, and subprime residential mortgage loans; RMBS for which the principal and interest payments are guaranteed by the U.S. government agency or the U.S. government-sponsored entity; residential mortgage loans; commercial mortgage-backed securities; and commercial mortgage loans and other commercial real estate debt. It also provides collateralized loan obligations; mortgage-related and non-mortgage-related derivatives; corporate debt and equity securities; corporate loans; and other strategic investments. In addition, the company offers consumer loans and asset-backed securities backed by consumer and commercial assets. Ellington Financial LLC was incorporated in 2007 and is based in Old Greenwich, Connecticut.

How the Company Makes Money

Ellington Financial generates revenue primarily through the interest income earned on its diversified portfolio of mortgage-related assets, including residential and commercial mortgage-backed securities. The company also profits from capital gains realized when it sells these securities at a higher price than their purchase cost. Additionally, Ellington Financial may earn management fees from its investment management activities and may also benefit from various financing strategies, including leveraging its investments to enhance returns. Significant partnerships with financial institutions and market participants enable the company to access proprietary investment opportunities and enhance its market position, contributing to its overall earnings.

Ellington Financial Financial Statement Overview

Summary

Ellington Financial shows a mixed financial position with significant volatility in revenue, especially with a complete drop in 2024. The balance sheet reflects improved leverage and equity growth, but cash flow instability is a concern.

Income Statement

Ellington Financial has shown fluctuating revenue with a significant increase in 2023 followed by a complete drop in 2024. The gross profit margin has been strong historically, and the net profit margin improved in 2023. However, the complete lack of revenue reported in 2024 is concerning for long-term stability. EBIT has been inconsistent, indicating potential operational challenges.

Balance Sheet

The company maintains a solid equity base, with stockholders' equity growing over time. The debt-to-equity ratio was high in 2023 but improved significantly by 2024 due to the reduction in total debt. The equity ratio remains stable, suggesting a balanced approach to leverage. However, the drastic drop in total revenue raises questions about asset utilization efficiency.

Cash Flow

Ellington Financial's cash flow from operations has been volatile, with negative cash flow in 2023 and zero in 2024. The financing cash flow has been positive, indicating reliance on external funding. Free cash flow has been inconsistent, which could impact the company's ability to reinvest in growth initiatives. The absence of free cash flow growth in 2024 is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	357.75M	371.90M	351.95M	43.15M	216.80M	43.33M
Gross Profit	333.36M	298.33M	251.79M	23.55M	174.46M	5.50M
EBITDA	397.79M	403.19M	323.48M	118.80M	134.94M	67.31M
Net Income	150.98M	145.86M	84.08M	-70.05M	133.46M	25.01M
Balance Sheet
Total Assets	16.64B	16.32B	15.32B	14.09B	5.18B	3.41B
Cash, Cash Equivalents and Short-Term Investments	203.29M	713.52M	230.54M	217.05M	92.66M	111.65M
Total Debt	14.57B	14.28B	13.33B	12.40B	3.64B	2.39B
Total Liabilities	15.01B	14.73B	13.78B	12.87B	3.85B	2.49B
Stockholders Equity	1.61B	1.57B	1.52B	1.20B	1.29B	885.22M
Cash Flow
Free Cash Flow	-497.46M	-430.53M	-241.86M	3.58M	224.13M	150.15M
Operating Cash Flow	-497.46M	-430.53M	-241.86M	42.69M	51.29M	119.51M
Investing Cash Flow	-1.76B	-728.26M	174.91M	-1.75B	-2.03B	507.27M
Financing Cash Flow	2.28B	1.14B	75.63M	1.84B	1.95B	-587.43M

Ellington Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.83
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EFC, the sentiment is Positive. The current price of 13.83 is above the 20-day moving average (MA) of 13.58, above the 50-day MA of 13.14, and above the 200-day MA of 12.24, indicating a bullish trend. The MACD of 0.20 indicates Positive momentum. The RSI at 64.74 is Neutral, neither overbought nor oversold. The STOCH value of 52.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EFC.

Ellington Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EFC	69 Neutral	$1.38B	11.40	8.81%	11.28%	20.32%	1.58%
Sector *	63 Neutral	$7.09B	13.59	-0.39%	6.85%	4.08%	-25.24%
DX	60 Neutral	$1.68B	16.49	4.93%	14.55%	35.01%	1115.85%
ARI	57 Neutral	$1.53B	―	-0.35%	9.11%	-26.29%	-342.06%
PMT	57 Neutral	$1.10B	17.39	5.50%	12.70%	1.71%	-56.69%
TWO	55 Neutral	$1.08B	5.06	-14.78%	16.80%	-21.95%	-528.94%
ARR	48 Neutral	$1.78B	8.01	-2.04%	18.20%	157.34%	91.67%

Ellington Financial Corporate Events

Ellington Financial Announces September 2025 Dividends

On September 8, 2025, Ellington Financial Inc. announced a series of dividend declarations for its common and preferred stockholders. The Board of Directors declared a monthly dividend of $0.13 per share for common stock, and quarterly dividends for various series of preferred stocks, with payments scheduled for late September and October 2025. This announcement reflects the company’s ongoing commitment to providing returns to its shareholders and may influence investor confidence in the company’s financial health.

Ellington Financial Reports Strong Q2 2025 Results

Ellington Financial Inc. reported strong financial results for the second quarter of 2025, with a net income of $42.9 million attributable to common stockholders and an adjusted distributable earnings of $45.0 million. The company achieved a 13.8% annualized economic return and increased its book value per share to $13.49. The quarter was marked by robust securitization activities, with six transactions completed, and a stable investment portfolio despite market volatility. The company anticipates continued strong earnings through portfolio expansion, accelerated securitizations, and contributions from Longbridge, supported by the launch of its HELOC For Seniors program.

Ellington Financial Declares August 2025 Monthly Dividend

On August 7, 2025, Ellington Financial Inc. announced that its Board of Directors declared a monthly dividend of $0.13 per share of common stock, which will be payable on September 30, 2025, to stockholders of record as of August 29, 2025. This decision reflects the company’s ongoing commitment to providing returns to its shareholders and may impact its financial operations and market positioning within the financial investment industry.

Ellington Financial Reports Q2 2025 Preliminary Results

Ellington Financial Inc. reported preliminary financial results for the second quarter of 2025, estimating a book value per share of common stock between $13.47 and $13.51 and net income per share between $0.43 and $0.47. The company anticipates an increase in Adjusted Distributable Earnings compared to the previous quarter, although these figures are subject to change upon completion of financial statement reviews. The announcement highlights potential impacts on the company’s operations and market position, though it cautions stakeholders about the uncertainty of these preliminary estimates.

Ellington Financial Declares Monthly Dividend for July

On July 8, 2025, Ellington Financial Inc. announced that its Board of Directors declared a monthly dividend of $0.13 per share of common stock, which will be payable on August 29, 2025, to stockholders of record as of July 31, 2025. This decision reflects the company’s ongoing commitment to providing returns to its shareholders and may influence its market positioning by potentially attracting more investors interested in regular income from dividends.

Ellington Financial Declares Dividends for July 2025

On June 9, 2025, Ellington Financial Inc. announced that its Board of Directors declared dividends for its common and preferred stockholders. The dividends, which include a monthly dividend for common stock and quarterly dividends for various series of preferred stock, are set to be paid in July 2025. This announcement reflects the company’s ongoing commitment to returning value to its shareholders and may impact its financial operations and stakeholder relations.