Orchid Island Capital (ORC) AI Stock Analysis

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Orchid Island Capital

(NYSE:ORC)

Rating:61Neutral

Price Target:―

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. SPDR S&P 500 ETF (SPY)

Market Cap

$763.78M

Dividend Yield20.9%

Average Volume (3M)3.75M

Price to Earnings (P/E)17.8

Beta (1Y)1.06

Revenue Growth61.59%

EPS GrowthN/A

CountryUS

EmployeesN/A

SectorReal Estate

Sector Strength64

IndustryREIT - Mortgage

Share Statistics

EPS (TTM)0.16

Shares Outstanding106,673,390

10 Day Avg. Volume3,551,876

30 Day Avg. Volume3,746,255

Financial Highlights & Ratios

PEG Ratio-0.60

Price to Book (P/B)0.80

Price to Sales (P/S)0.00

P/FCF Ratio15.99

Enterprise Value/Market Cap0.48

Enterprise Value/Revenue0.70

Enterprise Value/Gross Profit2.49

Enterprise Value/Ebitda-9.92

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

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

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

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

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
-2.17M	54.41M	154.93M	-237.74M	-49.51M	12.67M
	Gross Profit
147.37M	54.41M	143.72M	-475.49M	-99.02M	6.33M
	EBIT
15.57M	53.06M	0.00	-196.75M	-64.76M	2.13M
	EBITDA
9.94M	273.94M	0.00	0.00	-64.76M	2.13M
	Net Income Common Stockholders
35.01M	37.66M	-39.23M	-258.45M	-64.76M	2.13M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
521.93M	409.88M	178.31M	205.65M	385.14M	220.14M
	Total Assets
7.30B	5.72B	4.26B	3.87B	7.07B	4.06B
	Total Debt
0.00	0.00	3.71B	3.38B	6.24B	3.60B
	Net Debt
-396.39M	-309.33M	3.51B	3.17B	5.86B	3.38B
	Total Liabilities
6.45B	5.05B	3.80B	3.43B	788.00K	1.16M
	Stockholders Equity
855.88M	668.50M	469.94M	438.76M	768.10M	415.29M
Cash Flow		Free Cash Flow
47.76M	66.99M	8.00M	289.37M	96.44M	118.57M
	Operating Cash Flow
47.76M	66.99M	8.00M	289.37M	96.44M	55.37M
	Investing Cash Flow
-2.90B	-1.42B	-441.06M	2.44B	-3.02B	-199.34M
	Financing Cash Flow
3.05B	1.48B	396.13M	-2.94B	3.07B	164.82M

Orchid Island Capital Technical Analysis

Technical Analysis Sentiment

Negative

Last Price6.92

Price Trends

50DMA

7.08

Negative

100DMA

7.45

Negative

200DMA

7.32

Negative

Market Momentum

MACD

>-0.01

Positive

RSI

43.90

Neutral

STOCH

22.50

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORC, the sentiment is Negative. The current price of 6.92 is below the 20-day moving average (MA) of 7.10, below the 50-day MA of 7.08, and below the 200-day MA of 7.32, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 43.90 is Neutral, neither overbought nor oversold. The STOCH value of 22.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
TRTX	67 Neutral	$625.28M	11.24	6.22%	12.68%	-13.64%	―
ORC	61 Neutral	$763.78M	17.78	5.23%	20.90%	61.59%	―
Sector *	60 Neutral	$2.76B	10.33	0.49%	8508.28%	5.95%	-17.56%
KREF	54 Neutral	$610.07M	55.71	2.42%	11.26%	-16.46%	―
IVR	50 Neutral	$483.36M	17.61	6.55%	21.01%	137.36%	―
NYMT	50 Neutral	$583.33M	―	2.63%	12.29%	33.94%	96.99%
RWT	48 Neutral	$732.15M	25.93	2.92%	12.54%	6.72%	228.13%

* Real Estate Sector Average

Performance Comparison

ORC

Orchid Island Capital

6.92

-0.24

-3.35%

IVR

Invesco Mortgage

7.35

-0.24

-3.16%

RWT

Redwood

5.44

-0.23

-4.06%

NYMT

New York Mortgage

6.42

1.25

24.18%

KREF

Kkr Real Estate Finance

8.97

0.29

3.34%

TRTX

Tpg Re Finance

7.59

0.11

1.47%

Orchid Island Capital Earnings Call Summary

Earnings Call Date:Apr 24, 2025

(Q1-2025)

% Change Since: 1.47%|

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.