Ellington Credit Delivers Surprising Earnings Amid Ongoing Revenue Challenges
Quarterly Earnings Overview
Ellington Credit (EARN) reported quarterly earnings of $0.28 per share, surpassing the Zacks Consensus Estimate of $0.27 per share. In comparison, the company earned $0.21 per share in the same period last year. These earnings figures have been adjusted to exclude unusual items.
This quarterly report shows an earnings surprise of 3.70%. Last quarter, investors anticipated earnings of $0.24 per share, yet the company exceeded expectations significantly with earnings of $0.36, marking a surprise of 50%.
Throughout the last year, Ellington Credit has outperformed consensus EPS estimates each quarter.
Revenue Results
Operating within the Zacks REIT and Equity Trust sector, Ellington Credit reported revenues of $4.75 million for the quarter ending September 2024, falling short of the Zacks Consensus Estimate by 37.06%. This figure stands in stark contrast to revenues of -$1.1 million from a year earlier. Over the past four quarters, the company has not met consensus revenue estimates.
How the stock reacts to these recent numbers and future earnings guidance will significantly depend on feedback from management during the earnings call.
Since the beginning of the year, Ellington Credit’s stock has risen by approximately 8%, compared to a 25.8% increase in the S&P 500 index.
Future Outlook for Ellington Credit
Despite Ellington Credit’s underperformance this year, investors are left pondering: what’s next for the stock?
This question lacks straightforward answers, yet one effective approach for investors is to assess the company’s earnings forecast. This forecast includes current consensus earnings expectations for upcoming quarters, as well as any recent changes to those expectations.
Research indicates a strong link between short-term stock movements and trends in earnings estimate revisions. Investors can monitor these revisions independently or utilize rating tools like the Zacks Rank, known for its reliability in foreseeing the effects of earnings estimate revisions.
Before the latest earnings report, the trend for Ellington Credit’s estimate revisions appears mixed. Although revisions may shift after the report, the current situation places the stock at a Zacks Rank #3 (Hold), suggesting shares are likely to align with overall market performance in the near term. For additional stocks ranked #1 (Strong Buy), check the Zacks website.
It will be insightful to see how estimates for future quarters and the current fiscal year evolve in the near future. Presently, the consensus EPS estimate stands at $0.27 with projected revenues of $7.49 million for the upcoming quarter and $1.16 with revenues of $19.88 million for the current fiscal year.
Investors should also consider the industry’s outlook, which can significantly impact stock performance. The REIT and Equity Trust sector currently ranks in the bottom 42% of over 250 Zacks industries. Historical data shows that the highest-ranked industries outperform those in the lower half by a ratio of more than 2:1.
Upcoming Earnings from AFC Gamma Inc.
AFC Gamma Inc. (AFCG), another player in the same industry, is poised to release its quarterly results for the period ending September 2024 on November 13.
The company is projected to report earnings of $0.34 per share, reflecting a year-over-year decrease of 30.6%. The consensus EPS estimate for this quarter has remained stable over the past 30 days.
AFC Gamma Inc. is expected to generate revenues of $14.51 million, a 13.7% drop from the same quarter last year.
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Ellington Credit Company (EARN): Free Stock Analysis Report
AFC Gamma Inc. (AFCG): Free Stock Analysis Report
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
