tiprankstipranks
Trending News
More News >
Orchid Island Capital (ORC)
:ORC

Orchid Island Capital (ORC) AI Stock Analysis

Compare
3,092 Followers

Top Page

OR

Orchid Island Capital

(NYSE:ORC)

61Neutral
Orchid Island Capital's stock score reflects a company facing significant volatility in financial performance, with strengths in its debt-free balance sheet and attractive dividend yield. However, the earnings call revealed risks such as increased leverage and market uncertainties. Technical analysis suggests mixed signals, with short-term upward momentum but potential overvaluation concerns. The overall score highlights the balance between potential income opportunities and underlying instability.

Orchid Island Capital (ORC) vs. S&P 500 (SPY)

Orchid Island Capital Business Overview & Revenue Model

Company DescriptionOrchid Island Capital, Inc., a specialty finance company, invests in residential mortgage-backed securities (RMBS) in the United States. The company's RMBS is backed by single-family residential mortgage loans, referred as Agency RMBS. Its portfolio includes traditional pass-through Agency RMBS, such as mortgage pass through certificates and collateralized mortgage obligations; and structured Agency RMBS comprising interest only securities, inverse interest only securities, and principal only securities. The company qualifies as a real estate investment trust for federal income tax purposes. Orchid Island Capital, Inc. was incorporated in 2010 and is based in Vero Beach, Florida.
How the Company Makes MoneyOrchid Island Capital makes money primarily through the spread between the interest income generated from its portfolio of mortgage-backed securities and the cost of borrowing funds to finance these investments. The company invests in Agency RMBS, which are considered relatively low-risk due to the government guarantee on the underlying mortgage loans. Orchid Island Capital typically employs leverage to amplify returns, borrowing funds at a lower interest rate and investing in higher-yielding mortgage securities. The company's earnings are influenced by factors such as changes in interest rates, prepayment speeds of the underlying mortgages, and the overall market conditions for mortgage securities. Revenue is also affected by the management of interest rate risk and the strategic allocation of its investment portfolio.

Orchid Island Capital Financial Statement Overview

Summary
Orchid Island Capital's financials depict a company with significant revenue and profitability fluctuations. While the balance sheet is strong with no debt, the revenue volatility and inconsistent cash flows indicate challenges in financial stability, impacting the company's ability to deliver consistent income.
Income Statement
30
Negative
Orchid Island Capital has experienced significant volatility in its revenue over the years, with substantial losses in several periods. The most recent annual data shows zero revenue, making it difficult to assess profitability metrics like gross profit margin or net profit margin. The revenue growth rate has been highly unstable, indicating financial challenges in maintaining consistent income streams.
Balance Sheet
65
Positive
The company's balance sheet shows a stable equity position with stockholders' equity growing over time. The equity ratio indicates moderate reliance on own capital versus liabilities. The debt-to-equity ratio is favorable, reflecting no debt as of the latest period, which reduces financial risk. However, the fluctuating total assets and liabilities suggest potential volatility in financial structure.
Cash Flow
55
Neutral
Orchid Island Capital's cash flow statement reveals a mixed picture. The operating cash flow has shown improvement, but the free cash flow remains inconsistent. The operating cash flow to net income ratio is positive, indicating some efficiency in converting net income to cash. However, the free cash flow growth has been erratic, reflecting challenges in sustaining positive cash flows.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
54.41M154.93M-237.74M-49.51M12.67M
Gross Profit
54.41M143.72M-475.49M-99.02M6.33M
EBIT
53.06M0.00-196.75M-64.76M2.13M
EBITDA
0.000.000.00-64.76M2.13M
Net Income Common Stockholders
37.66M-39.23M-258.45M-64.76M2.13M
Balance SheetCash, Cash Equivalents and Short-Term Investments
409.88M178.31M205.65M385.14M220.14M
Total Assets
5.72B4.26B3.87B7.07B4.06B
Total Debt
0.003.71B3.38B6.24B3.60B
Net Debt
-309.33M3.51B3.17B5.86B3.38B
Total Liabilities
5.05B3.80B3.43B788.00K1.16M
Stockholders Equity
668.50M469.94M438.76M768.10M415.29M
Cash FlowFree Cash Flow
66.99M8.00M289.37M96.44M118.57M
Operating Cash Flow
66.99M8.00M289.37M96.44M55.37M
Investing Cash Flow
-1.42B-441.06M2.44B-3.02B-199.34M
Financing Cash Flow
1.48B396.13M-2.94B3.07B164.82M

Orchid Island Capital Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price7.08
Price Trends
50DMA
7.40
Negative
100DMA
7.49
Negative
200DMA
7.32
Negative
Market Momentum
MACD
-0.04
Negative
RSI
50.89
Neutral
STOCH
65.23
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORC, the sentiment is Neutral. The current price of 7.08 is above the 20-day moving average (MA) of 6.58, below the 50-day MA of 7.40, and below the 200-day MA of 7.32, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 50.89 is Neutral, neither overbought nor oversold. The STOCH value of 65.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ORC.

Orchid Island Capital Risk Analysis

Orchid Island Capital disclosed 72 risk factors in its most recent earnings report. Orchid Island Capital 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

Orchid Island Capital Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
ORORC
61
Neutral
$746.71M17.385.23%20.34%61.59%
60
Neutral
$2.74B11.400.08%8531.66%5.98%-15.71%
59
Neutral
$602.92M10.846.22%12.56%-13.64%
54
Neutral
$618.91M56.522.42%10.99%-16.46%
IVIVR
50
Neutral
$480.41M11.397.97%21.83%137.36%
50
Neutral
$482.27M2.63%12.60%33.72%-15.41%
RWRWT
48
Neutral
$775.29M18.083.03%11.84%27.92%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ORC
Orchid Island Capital
7.00
-0.14
-1.96%
IVR
Invesco Mortgage
7.37
-0.19
-2.51%
RWT
Redwood
5.89
0.17
2.97%
NYMT
New York Mortgage
6.65
1.21
22.24%
KREF
Kkr Real Estate Finance
9.23
0.46
5.25%
TRTX
Tpg Re Finance
7.65
0.19
2.55%

Orchid Island Capital Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q1-2025)
|
% Change Since: 3.81%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with notable improvements in earnings per share, total return, and portfolio growth. However, these were tempered by challenges such as decreased book value, increased leverage, and significant market volatility. The uncertainty surrounding tariffs and potential impacts of the Rocket Mortgage and Nationstar merger also contribute to a cautious outlook.
Q1-2025 Updates
Positive Updates
Increase in Earnings Per Share
Earnings per share increased from $0.07 in Q4 to $0.18 in Q1.
Total Return Improvement
Total return for Q1 was 2.6% unannualized, up from 0.6% in Q4.
Portfolio Growth
The average portfolio size increased to just under $6 billion in Q1 from $5.3 billion in Q4.
Dividend Consistency
Dividends of $0.36 per share were declared and paid for Q1, maintaining the same level as Q4.
Negative Updates
Decrease in Book Value
Book value decreased from $8.09 at 12/31 to $7.94 at 3/31.
Leveraged Position
Leverage ratio increased from 7.3 at 12/31 to 7.8 at 3/31.
Market Volatility Challenges
The market experienced significant volatility due to tariffs and their potential impact on the economy, leading to an uncertain outlook.
Swap Spread Volatility
Swap spreads moved dramatically and became quite volatile, posing challenges to hedging strategies.
Potential Impact of Rocket Mortgage and Nationstar Merger
The merger could affect prepayment speeds and the convexity of the mortgage universe, impacting portfolio performance.
Company Guidance
During Orchid Island Capital's Q1 2025 earnings call, several key financial metrics were discussed, reflecting the company's performance and strategic maneuvers. Earnings per share increased to $0.18 from $0.07 in Q4 2024, while the book value per share decreased to $7.94 from $8.09 at the end of the previous quarter. The total return for Q1 was 2.6%, a significant improvement from the 0.6% in Q4. Dividends remained consistent at $0.36 per share each quarter. The average portfolio size grew to just under $6 billion, compared to $5.3 billion in Q4, with a leverage ratio rising to 7.8 from 7.3. Prepayment speeds decreased to 7.8% from 10.5%, and liquidity slightly dipped to 52.2% from 52.9%. Additionally, the company raised $206 million through stock sales, slightly accretive to shareholders, and later repurchased 1.1 million shares at an average price of $6.44, which was accretive to shareholders’ equity.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.