Ellington Credit Co (EARN) Stock AnalysisEARNStock AnalysisEllington Credit Co

Ellington Credit Company is a non-diversified closed-end fund. The Company is focused on acquiring, investing in, and managing secondary collateralized loan obligations (CLO) mezzanine debt and equity tranches. It specializes in acquiring, investing in, and managing residential mortgage- and real estate-related assets. The Company's primary objective is to generate attractive risk-adjusted total returns for its shareholders by making investments in multiple parts of the CLO capital structure, including mezzanine debt and equity tranches. Additionally, it may also invest in CLO loan accumulation facilities, which are entities that acquire corporate loans and other similar corporate credit-related assets in anticipation of ultimately collateralizing a CLO transaction, as well as other related assets. It is externally managed and advised by Ellington Credit Company Management LLC. It operates in the Financials sector (REAL ESTATE INVESTMENT TRUSTS industry).

Ellington Residential Mortgage REIT (EARN) appears to be a good buy right now due to its current price of $4.44, which is significantly below the analyst price target of $6, suggesting a potential upside of 35.4%. Additionally, the forward P/E ratio of 4.75 indicates that the stock is undervalued compared to its earnings potential. The recent gross margin of 88.83% in Q1 2026 shows strong profitability, which is a positive indicator for long-term investors. However, the main risk is the recent earnings miss, with a reported EPS of 0.15 compared to an estimate of 0.20, reflecting a 25% surprise to the downside.

3 analysts cover EARN: 0 rate it Buy, 3 Hold and 0 Sell. The average price target is 6.00.