Ellington Financial (EFC) AI Stock Analysis

• Market Cap: $1.53B
• Dividend Yield: 11.37%
• Average Volume (3M): 1.58M
• Price to Earnings (P/E): 10.4
• Beta (1Y): 0.43
• Revenue Growth: 70.94%
• EPS Growth: 2.95%
• Country: US
• Employees: 400
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): 0.53
• Shares Outstanding: 111,255,480
• 10 Day Avg. Volume: 1,759,121
• 30 Day Avg. Volume: 1,576,927
• PEG Ratio: 0.13
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 3.73
• P/FCF Ratio: -2.45
• Enterprise Value/Market Cap: 11.18
• Enterprise Value/Revenue: 56.65
• Enterprise Value/Gross Profit: 56.65
• Enterprise Value/Ebitda: 172.59
• 1Y Price Target: $15.00
• Price Target Upside: 9.25% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: $14.50 ▲(5.61% Upside)

The score is held back primarily by high leverage and negative recent cash flow, despite strong reported profitability. Offsetting factors include a supportive earnings-call outlook with record ADE and improved financing actions, plus an income-friendly valuation (low P/E and high yield). Technical signals are neutral and do not materially improve or worsen the outlook.

Positive Factors

Distributable Earnings Coverage

Consistently reporting ADE above the cash dividend demonstrates durable distributable income generation relative to payouts. This coverage reduces near-term cut risk, supports reinvestment or deleveraging, and signals recurring net interest and securitization gains underpinning dividend sustainability.

Portfolio Growth & Diversification

Expansion into higher-yielding, proprietary originations and varied mortgage credit niches improves structural revenue mix. Owning differentiated, internally sourced assets can protect margins, enhance spread capture, and provide durable fee and interest income less reliant on volatile agency markets.

Greater Long-Term Financing

Shifting funding to longer-term unsecured notes and increased securitizations reduces roll-over dependence on short-term repo markets. This structural finance move lowers refinancing risk and funding volatility, improving resilience to rate moves and supporting steadier net interest margins over time.

Negative Factors

Very High Leverage

A capital structure with ~8.8x debt-to-equity leaves the REIT highly sensitive to asset-price swings and funding stress. Elevated leverage magnifies downside from credit or valuation shocks, constrains strategic flexibility, and increases probability that adverse market moves impair book value or require dilutive capital actions.

Persistent Negative Operating Cash Flow

Multi-year negative operating and free cash flow indicates reliance on external financing and portfolio transactions to fund operations and dividends. That structural cash shortfall raises sustainability concerns for distributions and makes the business more vulnerable to tightening funding markets or higher borrowing costs over the medium term.

Sensitivity of Retained Tranches

Retained tranche exposures that produce unrealized losses from prepayment and housing-price assumptions create recurring valuation volatility. These mark-to-market swings can erode book value and distributable earnings during adverse macro scenarios, raising structural earnings variability and potential capital impairment risk.

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's financial performance is mixed, with significant volatility in revenue and cash flow. The income statement shows a concerning drop in revenue to zero in 2024, while the balance sheet reflects improved leverage. However, cash flow instability remains a challenge.

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	301.22M	282.19M	256.50M	43.15M	216.80M	35.15M
Gross Profit	301.22M	282.19M	256.50M	43.15M	174.46M	35.15M
EBITDA	98.87M	0.00	0.00	0.00	216.80M	0.00
Net Income	155.33M	145.86M	84.08M	-70.05M	133.46M	25.01M
Balance Sheet
Total Assets	17.84B	16.32B	15.32B	14.09B	5.18B	3.41B
Cash, Cash Equivalents and Short-Term Investments	184.81M	192.39M	230.54M	221.87M	92.84M	111.82M
Total Debt	15.57B	0.00	13.33B	12.40B	3.64B	2.39B
Total Liabilities	16.05B	14.73B	13.78B	12.87B	3.85B	2.49B
Stockholders Equity	1.77B	1.57B	1.52B	1.20B	1.29B	885.22M
Cash Flow
Free Cash Flow	-768.13M	-430.53M	-241.86M	3.58M	224.13M	150.15M
Operating Cash Flow	-768.13M	-430.53M	-241.86M	42.69M	51.29M	119.51M
Investing Cash Flow	-2.77B	-728.26M	174.91M	-1.75B	-2.03B	507.27M
Financing Cash Flow	3.52B	1.14B	75.63M	1.84B	1.95B	-587.43M

Ellington Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.73
• 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 13.73 is above the 20-day moving average (MA) of 13.71, above the 50-day MA of 13.61, and above the 200-day MA of 12.76, indicating a bullish trend. The MACD of 0.01 indicates Positive momentum. The RSI at 53.08 is Neutral, neither overbought nor oversold. The STOCH value of 68.07 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
LADR	66 Neutral	$1.39B	17.33	5.26%	8.21%	-17.18%	-17.16%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
ARI	64 Neutral	$1.39B	11.26	7.26%	9.89%	0.29%	―
ORC	63 Neutral	$1.15B	15.68	7.02%	20.03%	72.30%	-54.02%
PMT	61 Neutral	$1.14B	14.27	6.37%	12.69%	-15.48%	-36.45%
EFC	60 Neutral	$1.53B	10.40	9.23%	11.37%	70.94%	2.95%
CIM	50 Neutral	$1.09B	-32.16	2.10%	11.40%	9.46%	-111.44%

Ellington Financial Corporate Events

Ellington Financial Declares Monthly Dividend for Shareholders

On January 8, 2026, Ellington Financial Inc. announced that its board had declared a monthly dividend of $0.13 per share on its common stock, payable on February 27, 2026 to stockholders of record as of January 30, 2026. The move underscores the company’s continued emphasis on providing regular income to shareholders and signals ongoing confidence in its ability to generate distributable cash flow from its diversified portfolio of mortgage-related and other structured finance assets.

The most recent analyst rating on (EFC) stock is a Hold with a $14.50 price target. To see the full list of analyst forecasts on Ellington Financial stock, see the EFC Stock Forecast page.

Ellington Financial Expands ATM Equity Offering Capacity, Agents

On December 23, 2025, Ellington Financial Inc. and its external manager amended their existing equity distribution agreements tied to the company’s at-the-market common stock offering program and simultaneously entered into new, substantively identical equity distribution agreements with Citadel Securities Institutional LLC and Moelis & Company LLC, adding them as additional sales agents alongside Citizens JMP, B. Riley Securities, BTIG and Armstrong Securities. The amendments increased the maximum aggregate offering capacity under the program, with up to $500 million of common shares remaining available to be sold from time to time via at-the-market transactions on the New York Stock Exchange and other markets through these agents, who may earn up to 2.0% of gross proceeds, a move that enhances Ellington Financial’s flexibility to raise equity capital and deepens its syndicate of distribution partners without obligating the company to issue any specific amount of stock.

The most recent analyst rating on (EFC) stock is a Buy with a $15.00 price target. To see the full list of analyst forecasts on Ellington Financial stock, see the EFC Stock Forecast page.

Ellington Financial Declares Dividends for January 2026

On December 4, 2025, Ellington Financial Inc. announced that its Board of Directors declared dividends for various stock categories. These include a monthly dividend for common stock and quarterly dividends for Series A, B, C, and D preferred stocks, with payments scheduled for late January 2026. This announcement highlights Ellington Financial’s commitment to providing returns to its shareholders, potentially enhancing its attractiveness to investors and reinforcing its position in the financial market.

The most recent analyst rating on (EFC) stock is a Buy with a $16.00 price target. To see the full list of analyst forecasts on Ellington Financial stock, see the EFC Stock Forecast page.

Ellington Financial Declares November 2025 Dividend

On November 10, 2025, Ellington Financial Inc. announced that its Board of Directors declared a monthly dividend of $0.13 per share of common stock, payable on December 31, 2025, to stockholders of record as of November 28, 2025. This decision reflects the company’s ongoing commitment to providing shareholder value and may influence its market positioning by potentially attracting more investors seeking regular income.

The most recent analyst rating on (EFC) stock is a Buy with a $14.50 price target. To see the full list of analyst forecasts on Ellington Financial stock, see the EFC Stock Forecast page.

Ellington Financial Reports Strong Q3 2025 Results

Ellington Financial reported strong financial results for the third quarter of 2025, with a net income of $29.5 million and adjusted distributable earnings of $54.2 million. The company significantly increased its long-term, non-mark-to-market financing through securitizations and the issuance of senior unsecured notes, enhancing its balance sheet and risk management. The shift towards long-term financing is expected to support earnings stability and reduce reliance on short-term financing, benefiting stakeholders by fortifying the company’s capital structure.

The most recent analyst rating on (EFC) stock is a Buy with a $15.00 price target. To see the full list of analyst forecasts on Ellington Financial stock, see the EFC Stock Forecast page.