Ellington Financial Inc. (EFC) Stock Analysis
Ellington Financial Inc.
▾ What's in the 36/100 risk score? (higher = riskier)
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend). See the Financial Health section for the full balance-sheet read.
How to read EFC
We are not publishing an intrinsic value for this one — the section below says exactly why. Everything on this page that comes straight from the filings and the tape is still here; treat the missing valuation as a known gap, not as a verdict on the business.
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Reported earnings & margins ↓
What the company actually reported — unaffected by the valuation being held.
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Balance sheet & book value ↓
Assets, liabilities and equity as filed.
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Who's selling & betting against it ↓
Insider and short-interest behaviour needs no valuation model.
EFC's SEC filings give us limited machine-readable financials — common for some foreign or newly-listed filers that report under IFRS or file abbreviated statements. We can't run a full valuation on a partial dataset.
What to use instead: What we have parsed is shown below. As more complete filings arrive (or IFRS support lands), the valuation will populate.
How does EFC stack up against its closest peers?
We take the 8 same-industry companies most similar to EFC (similar size) and check what investors are paying for each dollar of their revenue (or profits). If EFC is much more expensive on the same yardstick, that's a red flag — unless you have a specific reason it deserves a premium. For a leveraged business, EV/EBIT and FCF yield (both in the table) are usually more reliable than EV/Sales, because revenue multiples ignore differences in margins and debt.
▾ What's "EV / Sales" in plain English?
EV (Enterprise Value) = market cap + total debt − cash. It's "what you'd pay to buy the entire company outright" — you pay the market cap to shareholders and take over their debt, but you keep their cash. EV is fairer than market cap alone because it includes the debt the new owner inherits.
EV / Sales = EV ÷ annual revenue. So "2.5×" means investors pay $2.50 of enterprise value per $1 of yearly sales. Higher = market is paying more per dollar of sales (usually because they expect future growth or fat margins).
p25 / median / p75 are the 25th, 50th (middle), and 75th percentile of the peers' multiples. Half the peers fall between p25 and p75. The median (p50) is the typical peer — that's the benchmark we compare to.
| EV / SalesEV / Sales — For every $1 of yearly revenue, this is how many dollars investors pay to own the whole business (including debt). Why it matters: Works for pre-profit growth companies where P/E and FCF don't apply. The most apples-to-apples cross-company multiple because it ignores accounting choices. Reference: 1–3x for mature companies · 4–10x for software/SaaS · 10–20x for hypergrowth · >20x is rare and demanding Full explanation → |
0.8x / 3.1x / 7.8x |
| EV / EBITEV / EBITDA — Enterprise value divided by earnings before interest, tax, depreciation, and amortization. Why it matters: A classic "what would a private buyer pay" multiple — used in M&A. Strips out tax and capital-structure noise. Reference: 8–12x for mature businesses · 15–25x for growth · Below 5x often signals distress Full explanation → |
6.7x / 16.6x / 23.4x |
Bold middle number = median peer. Half the peers trade above it, half below. Computed over 8 same-industry peers; implausible multiples excluded.
⚠️ Important caveat: peer multiples only work if the peers are genuinely comparable. Always check the peer list below — if the auto-picker grabbed micro-caps or unrelated businesses, the comparison is noise. A medical-device giant priced against tiny biotech startups won't produce a useful signal.
▾ View peer list (8)
| Ticker | Company | Industry | Mcap | EV/Sales | EV/GP | EV/EBIT | FCF Yield |
|---|---|---|---|---|---|---|---|
| FOR | Forestar Group Inc. | Real Estate | $1.4B | 1.4x | — | — | 10.4% |
| KW | Kennedy-Wilson Holdings, Inc. | Real Estate | $1.5B | 3.1x | — | — | 5.4% |
| IIPR | INNOVATIVE INDUSTRIAL PROPERTIES I | Real Estate | $1.7B | 7.8x | — | 16.6x | 11.4% |
| GTY | GETTY REALTY CORP /MD/ | Real Estate | $2.0B | 13.4x | — | 23.4x | 6.6% |
| SKYH | Sky Harbour Group Corp | Real Estate | $730M | 33.3x | — | — | 1.9% |
| UE | Urban Edge Properties | Real Estate | $2.8B | 6.0x | — | — | 6.0% |
| HPP | Hudson Pacific Properties, Inc. | Real Estate | $650M | 0.8x | 1.6x | — | 16.9% |
| CWK | Cushman & Wakefield Ltd. | Real Estate | $2.9B | 0.3x | — | 6.7x | 4.7% |
Leveraged bond portfolio dressed up as real estate
Despite the "REIT" label, this is not an equity REIT (which owns buildings). It\'s a leveraged mortgage-backed-securities (MBS) portfolio — borrow short-term, buy long-term mortgages, pocket the spread. Valued on P/Book + dividend yield + Net Interest Margin. AFFO doesn\'t apply.
- Yield curve shape — steep curve = wide net interest margin = healthy dividend. Flat/inverted curve crushes earnings.
- Prepayment speeds — refinancing waves shrink high-yield holdings; the mREIT has to reinvest at lower rates.
- Hedge book — most mREITs hedge interest-rate risk with swaps; hedging gains/losses can swing earnings dramatically.
- Leverage (debt-to-equity) — typically 5-9×. Amplifies BOTH returns and losses on the MBS portfolio.
- Distributable yield vs current yield — the dividend can outpace earnings for several quarters before being cut.
Warning: mREIT dividends are historically among the most likely to be cut during stress periods (2008, 2020, 2022). High current yield is NOT a reliable forecast.
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
REITs deliberately carry high leverage backed by long-life real estate and pay out 90%+ of taxable income — both inputs that Altman Z flags as distress. See the REIT Valuation Lens above for P/AFFO, dividend yield and payout ratio.
Why it matters: High score = fundamentals improving. Low score = deteriorating. Especially powerful for filtering cheap stocks: cheap + high F-score historically outperforms; cheap + low F-score is often a value trap.
Reference: 7–9 = strong · 4–6 = mediocre · 0–3 = weak
Full explanation →
Piotroski F's checks (operating cash flow, gross-margin trend, current ratio, asset turnover) assume an industrial cost structure, so they misread asset-heavy or financial businesses like this one — a healthy REIT, utility, pipeline, BDC/fund or holding company can score low for reasons that aren't weakness. See the sector lens above for the metrics that actually matter.
A standard discounted cash flowDCF — Discounted Cash Flow — sums up all future cash a business will produce, adjusted for the fact that future dollars are worth less than dollars today.
Why it matters: It is the most fundamentally honest valuation method when applicable — but only works for companies with predictable, positive cash flow.
Reference: Best for: mature, profitable businesses. Fails for: pre-profit growth, banks, REITs.
Full explanation → (DCF) valuation is not meaningful for Ellington Financial Inc. because its operating cash flow has been negative in the latest period and only positive in 2 out of the last 5 years, making future cash flows difficult to project reliably. Investors are likely focused on the company's ability to generate consistent positive operating cash flow and its net income, which has been positive in 4 of the last 5 years. The number one quantifiable risk is the continued negative operating cash flow, which could hinder its ability to fund operations without external capital.
As of 2 months ago
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What's free cash flow / what do these mean?
Revenue per share — how much the business earns from customers, divided by the number of shares outstanding. Top of the income statement.
Earnings per share — profit left after operating costs, interest, and taxes, per share. Two versions appear on this page and are not interchangeable: GAAP diluted EPS uses the company's weighted-average diluted share count during the reporting period (this is the "earnings" in "price-to-earnings"); net income per current share divides annual net income by today's share count. They differ whenever the share count has changed.
Owner-earnings free cash flow per share — the cash the business produces for shareholders. Savng's owner-earnings FCF subtracts capital expenditures and stock-based compensation from operating cash flow (SBC is a real dilution cost even though it's non-cash). This is deliberately more conservative than "standard" FCF, which subtracts only capital expenditures — so our figure is lower than the headline FCF you'll see elsewhere. FCF funds dividends, buybacks, debt repayment, and acquisitions; a company can report positive earnings yet negative FCF.
Debt per share — total interest-bearing borrowings divided by shares. High debt-per-share next to thin FCF-per-share is a fragility signal.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
- Return to positive operating cash flow in upcoming quarters
- Consistent net income growth
- Stability in portfolio performance metrics
The trend, in plain numbers (2024 → 2025)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
Nothing clearly improving year-over-year.
- Free cash flow is negative at -$929.1M — the cash burn widened vs last year.
Roughly flat: Net income was flat +1% to $118.7M.
Management & Leadership
Ellington Financial Inc. is led by CEO Laurence Penn, who has been with the company for many years. Michael W. Vitek serves as the Chief Financial Officer. The company operates as a real estate investment trust.
What They Make
Ellington Financial Inc. is a real estate investment trust (REITREIT (Real Estate Investment Trust) — A company that owns income-producing real estate and is required to pay out about 90% of its profit to shareholders as dividends.
Why it matters: Because they pay out almost everything, REITs are judged on the cash they distribute (price-to-AFFO and dividend yield), not on ordinary earnings — a normal P/E or DCF misleads here.
Reference: Dividend yields often 3–6%; valued on price-to-AFFO, not P/E.
Full explanation →) that acquires and manages mortgage-related assets and other financial assets. Its customers are investors seeking exposure to the mortgage and real estate markets.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
What we use instead: earnings (P/E, EV/EBIT), book value (P/B) — computed from the figures this company does report, shown in the sections below. Those numbers are unaffected by the missing cash-flow data.
The market is likely pricing Ellington Financial Inc. based on its ability to generate consistent net income, which has been positive in 4 out of the last 5 years, despite negative operating cash flow in the latest period. The market may be assigning value to the company's expertise in managing a complex portfolio of mortgage-related and other financial assets, which is not fully captured by a backward-looking cash flow model. Investors are likely looking for sustained profitability and a return to positive operating cash flow.
Business Model & Valuation
How They Make Money
The company funds itself through a combination of equity raises and debt, though long-term debt has fallen from $86M to $0M.
Growth / Revenue DCF
Negative free cash flow: revenue/margin growth model used - standard FCF DCF is unreliable for companies still scaling.
Show advanced inputs
| RevenueGrowth | 15.0% |
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project lots/units, inventory turnover and gross margin per unit independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Net income has been positive in 4 out of the last 5 years, while operating cash flow has been positive in 2 out of the last 5 years.
Geography & Markets
Ellington Financial Inc. primarily operates within the United States, investing in mortgage-related and other financial assets across various U.S. markets. Exact geographic segment splits are not available from current data sources.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)62.4NeutralMomentum is balanced — neither overbought nor oversold.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BearishLine below signalThe fast trend is below the slow trend — short-term momentum is currently downward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (4 notes — click to expand/collapse)
Guardrail Notes (4)
- FCF negative: revenue/margin growth model projects future cash flows from revenue trajectory.
- INVARIANT: weighted IV is non-positive. Model may not be appropriate.
- Model implies no positive equity value under these assumptions. Valuation is speculative/low-confidence.
- Illiquidity discount 7% applied (small/micro-cap — harder to exit, demand a margin).
FINANCIALS
Financial Statements (5-year tables — click to expand)
From Ellington Financial Inc.'s SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2025 | — | 118.7M | $1.19 |
| 2024 | — | 117.8M | $1.36 |
| 2023 | — | 60.9M | $0.89 |
| 2022 | — | -85.3M | $-1.43 |
| 2021 | — | 125.3M | $2.58 |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC & adj. | Free Cash Flow |
|---|---|---|---|---|
| 2025 | -925.5M | — | — | -929.1M |
| 2024 | -430.5M | — | — | -431.6M |
| 2023 | -241.9M | — | 1.3M | -243.1M |
| 2022 | 42.7M | — | 1.4M | 41.3M |
| 2021 | 51.3M | — | 971,000 | 50.3M |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). This is the same owner-earnings FCF definition the valuation model uses, though the DCF's starting value is a projected from revenue × terminal margin, not this single year.
Balance Sheet
| Total Assets | 19.4B |
| Total Liabilities | 17.5B |
| Equity | 1.8B |
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