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Cherry Hill Mortgage (CHMI)
NYSE:CHMI
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Cherry Hill Mortgage
(NYSE:CHMI)50Neutral
Cherry Hill Mortgage (CHMI) vs. S&P 500 (SPY)
Market Cap
$108.91M
Dividend Yield17.75%
Average Volume (3M)262.92K
Price to Earnings (P/E)―
Beta (1Y)1.52
Revenue Growth16.46%
EPS Growth29.76%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)-1.41
Shares Outstanding31,625,072
10 Day Avg. Volume243,319
30 Day Avg. Volume262,919
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
Price to Cash Flow (P/CF)6.10
P/FCF Ratio6.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.00Price Target Upside16.62% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Cherry Hill Mortgage Business Overview & Revenue Model
Company DescriptionCherry Hill Mortgage Investment Corp. is a real estate finance company, which acquires, invests in and manages a portfolio of excess mortgage servicing rights. The company operates through the following segments: Investments in RMBS, Investments in Servicing Related Assets and All Other segment. It also invests in agency residential mortgage backed securities, prime jumbo mortgage loans and other residential mortgage assets. The company was founded on October 31, 2012 and is headquartered in Farmingdale, NJ.
How the Company Makes MoneyCherry Hill Mortgage makes money primarily through the acquisition, management, and trading of residential mortgage-backed securities and other residential mortgage assets. The company earns revenue from the interest income generated by its MBS holdings, which consist of both agency and non-agency securities. Additionally, Cherry Hill Mortgage benefits from the spread between the interest income received from its mortgage assets and the cost of financing these assets. The company also engages in hedging activities to manage interest rate risk, which can impact its net interest income. Key contributing factors to CHMI's earnings include the performance of the housing and mortgage markets, interest rate trends, and the company's ability to effectively manage its portfolio and financing strategies.
Cherry Hill Mortgage Financial Statement Overview
Summary
Cherry Hill Mortgage faces significant challenges across its financial statements. The income statement reveals negative profitability and inconsistent earnings. The balance sheet shows high leverage, posing financial risks, and cash flow analysis indicates difficulties in sustaining positive cash flow trends. Overall, the company's financial health is concerning, with potential risks from high debt levels and negative earnings.Income Statement
The company shows volatility in revenue with a negative trend in recent periods, evidenced by negative revenues in the last annual report. The net profit margin is also negative, indicating ongoing losses. While there are occasional improvements, the overall income performance remains weak due to inconsistent earnings.45
Neutral
Balance Sheet
Cherry Hill Mortgage maintains a relatively stable equity ratio, but the company is highly leveraged with a high debt-to-equity ratio, presenting a risk of financial instability. The return on equity has been negative in recent periods, reflecting significant challenges in profitability.60
Neutral
Cash Flow
The cash flow statement shows fluctuating free cash flow with recent negative trends. Operating cash flow is positive but insufficient to cover net income losses consistently. The free cash flow to net income ratio indicates the company struggles to generate sufficient cash relative to its net earnings.50
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 33.79M | -9.95M | 40.19M | 28.14M | -57.32M | -47.89M | Gross Profit |
| 24.55M | -21.20M | 28.36M | 14.51M | -114.65M | -95.77M | EBIT |
| -21.20M | -34.93M | 44.82M | 13.06M | -71.00M | -59.62M | EBITDA |
| 15.20M | -9.19M | -450.00K | 13.06M | 979.00K | -59.62M | Net Income Common Stockholders |
| -32.63M | -34.79M | 21.74M | 12.28M | -53.22M | -43.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 337.06M | 72.39M | 337.06M | 1.02B | 1.31B | 2.53B | Total Assets |
| 1.41B | 1.39B | 1.41B | 1.30B | 1.59B | 2.96B | Total Debt |
| 183.89M | 1.10B | 183.89M | 145.27M | 111.38M | 166.99M | Net Debt |
| 126.57M | 1.05B | 126.57M | 81.35M | 27.49M | 142.32M | Total Liabilities |
| 1.14B | 1.13B | 1.14B | 1.02B | 1.28B | 2.54B | Stockholders Equity |
| 262.04M | 255.48M | 262.04M | 275.87M | 310.17M | 408.68M |
| Cash Flow | Free Cash Flow | ||||
| 7.97M | 40.66M | 21.88M | -7.37M | 8.24M | -33.29M | Operating Cash Flow |
| 7.97M | 40.66M | 59.91M | 48.01M | 61.20M | 69.68M | Investing Cash Flow |
| -107.64M | -104.05M | -128.20M | 166.52M | 1.26B | -757.12M | Financing Cash Flow |
| 83.89M | 67.17M | 57.07M | -267.97M | -1.28B | 739.12M |
Cherry Hill Mortgage Technical Analysis
Neutral
3.43
Price Trends
3.12
Positive
2.98
Positive
3.14
Positive
Market Momentum
0.09
Positive
53.30
Neutral
15.44
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHMI, the sentiment is Neutral. The current price of 3.43 is below the 20-day moving average (MA) of 3.51, above the 50-day MA of 3.12, and above the 200-day MA of 3.14, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 53.30 is Neutral, neither overbought nor oversold. The STOCH value of 15.44 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CHMI.
Cherry Hill Mortgage Risk Analysis
Cherry Hill Mortgage disclosed 70 risk factors in its most recent earnings report. Cherry Hill Mortgage 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
Cherry Hill Mortgage Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $9.36B | 10.99 | 9.58% | 14.09% | 384.69% | 963700.00% | |
68 Neutral | $12.38B | 13.21 | 8.40% | 12.14% | 13.33% | ― | |
68 Neutral | $1.26B | 10.31 | 7.58% | 11.76% | 11.91% | 52.26% | |
62 Neutral | $1.44B | 5.82 | 13.74% | 13.04% | 28.33% | ― | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
60 Neutral | $1.08B | 12.88 | 6.35% | 13.30% | 26.34% | 79.07% | |
50 Neutral | $108.91M | ― | -13.30% | 17.75% | 16.46% | 29.76% |
* Real Estate Sector Average
Performance Comparison
CHMI
Cherry Hill Mortgage
3.43
0.37
12.09%
AGNC
AGNC Investment
10.29
2.02
24.43%
NLY
Annaly Capital
21.69
4.71
27.74%
EFC
Ellington Financial
13.61
3.75
38.03%
MFA
MFA Financial
10.63
0.84
8.58%
TWO
Two Harbors
13.93
2.79
25.04%
Cherry Hill Mortgage Earnings Call Summary
Earnings Call Date: Nov 12, 2024 | % Change Since: 13.95% | Next Earnings Date: Mar 6, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While there was a strong liquidity position and potential benefits from a changing interest rate environment, the company reported a significant GAAP net loss, a decrease in book value, and increased leverage. The stability in prepayment speeds and potential future interest rate cuts are positive, but the current financial results and market volatility present challenges.Highlights
Earnings Available for Distribution
Generated earnings available for distribution (EAD) of $2.5 million or $0.08 per share, impacted by $0.045 per share of expenses related to the special committee's efforts.
Stable Prepayment Speeds
MSR portfolio's net CPR averaged approximately 5.5% for the third quarter, comparable to the previous quarter, indicating stable prepayment speeds.
Strong Liquidity Position
Ended the quarter with $50 million of unrestricted cash on the balance sheet, maintaining a solid liquidity profile.
Interest Rate Environment
The Fed began a rate cut cycle, with a recent additional 25 basis point cut, potentially benefiting future performance.
Lowlights
GAAP Net Loss
Reported GAAP net loss applicable to common stockholders of $0.49 per diluted share for the third quarter.
Decrease in Book Value
Book value per common share decreased from $4.15 on June 30 to $4.02 as of September 30, partly due to special committee expenses and ATM issuance.
Leverage Increase
Financial leverage increased to 5.3x, raising concerns about potential risk in a volatile interest rate environment.
Market Volatility Impact
Post quarter-end, spreads widened and volatility increased, with an estimated 4% to 5% decrease in book value as of last Friday.
Company Guidance
In the Cherry Hill Mortgage Investment Corporation's Q3 2024 earnings call, the company reported a GAAP net loss of $14.8 million, or $0.49 per diluted share, while earnings available for distribution (EAD) were at $2.5 million, or $0.08 per share, impacted by $0.045 per share in special committee expenses. The book value per common share decreased from $4.15 on June 30 to $4.02 on September 30, with financial leverage rising to 5.3x. The company maintained $50 million of unrestricted cash, and the portfolio was evenly split between MSR and RMBS, each representing approximately 42% of equity capital. The MSR portfolio's net CPR averaged 5.5%, while the RMBS portfolio's weighted average 3-month CPR was 5.4%. The interest rate spread for the RMBS portfolio remained at 3.22%, and the company reported comprehensive income of $1.3 million, or $0.04 per share. Looking forward, Cherry Hill expects to continue capital deployment into Agency RMBS for risk-adjusted returns, while closely monitoring macroeconomic trends and potential rate cuts.Cherry Hill Mortgage Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Cherry Hill Mortgage Transitions to Internal Management Model
Positive
Nov 20, 2024
Cherry Hill Mortgage Investment Corporation has transitioned to a fully integrated, internally managed mortgage REIT by terminating its management agreement with Cherry Hill Mortgage Management, LLC. This strategic move, which included new employment arrangements for senior management, aims to reduce expenses and enhance earnings, aligning the company’s interests with the investment community. This change follows a comprehensive review by an independent board committee, which concluded that internal management is in the company’s best interests.
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.