Orchid Island Capital (ORC)
NYSE:ORC
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Orchid Island Capital
(NYSE:ORC)
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Rating:55Neutral
Price Target:
$7.50
â–²(2.88% Upside)
Action:ReiteratedDate:03/19/26
The score is held back primarily by elevated leverage and historically volatile financial results, despite a strong 2025 rebound. Valuation and income metrics are very attractive (low P/E and high yield), but technicals point to weaker near-term momentum. Earnings-call tone was constructive with improving funding costs and book value, though prepayment and funding risks remain meaningful.
Positive Factors
Disciplined Acquisitions
Orchid Island's sizable, opportunistic purchases when spreads were wide lock in higher prospective carry and improved purchase yields. Executing acquisitions at favorable spread levels is a durable source of excess return, enhancing long-term net interest spread and future cash generation if market technicals normalize.
Negative Factors
Elevated Leverage
Very high leverage materially amplifies sensitivity to funding shocks, rate moves, and MBS mark-to-market swings. With repo-funded financing and thin cash-flow coverage historically, leverage increases the probability of forced deleveraging or asset sales during stress, undermining long-term earnings durability.
Read all positive and negative factors
Positive Factors
Negative Factors
Disciplined Acquisitions
Orchid Island's sizable, opportunistic purchases when spreads were wide lock in higher prospective carry and improved purchase yields. Executing acquisitions at favorable spread levels is a durable source of excess return, enhancing long-term net interest spread and future cash generation if market technicals normalize.
Read all positive factors
Orchid Island Capital (ORC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.35B
Dividend Yield20.03%
Average Volume (3M)7.08M
Price to Earnings (P/E)2.9
Beta (1Y)0.68
Revenue Growth72.30%
EPS Growth-54.02%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.19
Shares Outstanding190,693,390
10 Day Avg. Volume8,162,163
30 Day Avg. Volume7,077,024
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)0.67
Price to Sales (P/S)5.15
P/FCF Ratio7.67
Enterprise Value/Market Cap7.87
Enterprise Value/Revenue52.31
Enterprise Value/Gross Profit97.37
Enterprise Value/Ebitda53.73
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.17
Revenue Forecast (FY)$137.25M
Orchid Island Capital Business Overview & Revenue Model
Company Description
Orchid 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 portfol...
How the Company Makes Money
ORC makes money primarily by earning net interest income from its leveraged portfolio of RMBS. It purchases RMBS that pay interest and principal cash flows and finances a significant portion of those holdings using short-term borrowings (commonly ...
Orchid Island Capital Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call presented a predominately positive operational and financial picture: strong Q4 earnings and EPS growth, significant balance-sheet and portfolio expansion executed when spreads were wide, materially improved expense ratio and funding costs, and disciplined hedging and liquidity management. The management team also acknowledged and is actively managing headwinds — notably elevated prepayment speeds (especially on higher coupons), short-term funding volatility at year-end, and policy/technical uncertainty related to potential GSE activity — which could moderate near-term earnings. On balance the positives (growth, earnings, improved costs, and defensive positioning) outweigh the risks discussed.Positive Updates
Strong Quarterly Earnings and EPS Growth
Net income for Q4 was $103.4 million, equating to $0.62 per share versus $0.53 in Q3 (≈+17% QoQ). Total return for the quarter was 7.8% (vs. 6.7% in Q3).
Negative Updates
Rising Prepayment Speeds
Prepayment speeds rose to 15.7% in Q4 from 10.1% in Q3 (an increase of ~5.6 percentage points, or roughly +55% relative), driven particularly by higher-coupon pools (6%+). Higher speeds reduced carry and trimmed yields on affected positions.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Quarterly Earnings and EPS Growth
Net income for Q4 was $103.4 million, equating to $0.62 per share versus $0.53 in Q3 (≈+17% QoQ). Total return for the quarter was 7.8% (vs. 6.7% in Q3).
Read all positive updates
Company Guidance
Management guided a defensive-but-constructive outlook: Q4 results included $103.4M net income ($0.62/share), book value $7.54 (up from $7.33), shareholders’ equity ~ $1.4B, Q4 dividend of $0.36 (12¢/month) and total return of 7.8% (vs 6.7% in Q3); the company ended Q4 with average MBS of $9.5B (actual balance $10.6B, ~27% QoQ growth), leverage 7.4%, liquidity 57.7% (vs 57.1% Q3), and prepayment speeds of 15.7% (10.1% Q3). Portfolio & funding guidance: purchases in Q4 totaled $3.2B of specified pools (≈$892M Fannie 5s, $1.5B 5.5s, $600M 6s, $283M 6.5s) at modeled yields in the low-5% range, WA coupon rose to ~5.64, OAS for 5–6.5s tightened to ~50–60 bps, and the firm noted 75% of $7.4B of 2025 acquisitions occurred when spreads averaged ~108 bps; funding costs improved (repo rates fell from 4.33% to 3.98%, SOFR in the mid-3.6s, repo spreads trending to ~14 bps) and the company expects repo funding to turnover around a ~3.8% rate. Risk positioning/guidance: hedges equal ~69% of repo notional, DVO1 rose from 122k at 12/31 to ~178k, portfolio duration is low (~2.08) with a small positive duration gap (~0.17 currently), the firm added ~$950M pay-fixed swaps ($800M 3y, $90M 5y, $75M 7y) and TBA shorts in 5–6.5 coupons, expects prepayment speeds to moderate (improving carry), sees potential for further MBS tightening if GSE activity/technicals persist but is positioned defensively for a bear‑steepening/rate shock, and reiterated a 2025 expense ratio of ~1.7% with continued discipline on G&A.Orchid Island Capital Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
32
Negative
Cash Flow
46
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 179.51M | 54.41M | -20.70M | -241.00M | -49.89M |
| Gross Profit | 175.52M | 54.41M | -20.70M | -243.88M | -49.89M |
| EBITDA | 464.76M | 0.00 | 0.00 | 0.00 | 0.00 |
| Net Income | 159.03M | 37.66M | -39.23M | -258.45M | -64.76M |
Balance Sheet | |||||
| Total Assets | 11.68B | 5.72B | 4.26B | 3.87B | 7.07B |
| Cash, Cash Equivalents and Short-Term Investments | 724.56M | 309.33M | 241.03M | 205.65M | 385.14M |
| Total Debt | 10.24B | 0.00 | 0.00 | 0.00 | 0.00 |
| Total Liabilities | 10.30B | 5.05B | 3.80B | 3.43B | 6.30B |
| Stockholders Equity | 1.37B | 668.50M | 469.94M | 438.76M | 768.10M |
Cash Flow | |||||
| Free Cash Flow | 120.45M | 66.99M | 8.00M | 289.37M | 96.44M |
| Operating Cash Flow | 120.45M | 66.99M | 8.00M | 289.37M | 96.44M |
| Investing Cash Flow | -5.38B | -1.42B | -441.06M | 2.44B | -3.02B |
| Financing Cash Flow | 5.65B | 1.48B | 396.13M | -2.94B | 3.07B |
Orchid Island Capital Technical Analysis
Positive
7.29
Price Trends
7.25
Negative
7.10
Positive
6.72
Positive
Market Momentum
-0.06
Negative
54.64
Neutral
64.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORC, the sentiment is Positive. The current price of 7.29 is above the 20-day moving average (MA) of 7.01, above the 50-day MA of 7.25, and above the 200-day MA of 6.72, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 54.64 is Neutral, neither overbought nor oversold. The STOCH value of 64.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ORC.
Orchid Island Capital Risk Analysis
Orchid Island Capital disclosed 68 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $984.18M | 5.46 | 9.66% | 14.90% | 5.52% | -47.72% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
59 Neutral | $1.50B | 9.19 | 8.54% | 11.37% | 70.94% | 2.95% | |
55 Neutral | $1.35B | 2.89 | 15.05% | 20.03% | 72.30% | -54.02% | |
55 Neutral | $1.03B | 8.54 | 6.79% | 12.69% | -15.48% | -36.45% | |
53 Neutral | $1.08B | 4.43 | 8.85% | 11.40% | 9.46% | -111.44% | |
51 Neutral | $1.15B | -2.41 | -23.93% | 14.29% | 22.48% | 50.49% |
* Real Estate Sector Average
ORC
Orchid Island Capital
7.06
2.01
39.77%
CIM
Chimera Investment
12.93
3.64
39.26%
EFC
Ellington Financial
12.05
1.77
17.17%
MFA
MFA Financial
9.64
2.29
31.19%
TWO
Two Harbors
10.94
1.42
14.92%
PMT
PennyMac Mortgage
11.78
0.61
5.45%
Orchid Island Capital Corporate Events
Business Operations and StrategyDividendsFinancial Disclosures
Orchid Island Capital Declares March 2026 Monthly Dividend
Positive
Mar 18, 2026
On March 18, 2026, Orchid Island Capital, Inc., an agency mortgage REIT, declared a monthly cash dividend of $0.12 per common share for March 2026, payable on April 29 to shareholders of record as of March 31, with the same date serving as the ex-...
DividendsFinancial Disclosures
Orchid Island Capital Declares Monthly Dividend, Sets Earnings Dates
Positive
Jan 7, 2026
On January 7, 2026, Orchid Island Capital declared a monthly cash dividend of $0.12 per share for January 2026, payable on February 26, 2026 to shareholders of record as of January 30, 2026, and indicated it intends to continue making regular mont...
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.