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Orchid Island Capital (ORC)
NYSE:ORC
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Orchid Island Capital
(NYSE:ORC)
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Rating:52Neutral
Price Target:
$7.00
▼(-1.82% Downside)
Orchid Island Capital's overall stock score is driven by its financial performance challenges, including low profitability and high leverage. While technical indicators show moderate strength, the high P/E ratio suggests potential overvaluation. The earnings call reflects ongoing market challenges, despite strategic initiatives.
Orchid Island Capital (ORC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.05B
Dividend Yield20.2%
Average Volume (3M)5.08M
Price to Earnings (P/E)36.7
Beta (1Y)0.98
Revenue Growth67.17%
EPS GrowthN/A
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)-0.74
Shares Outstanding146,130,140
10 Day Avg. Volume6,622,437
30 Day Avg. Volume5,075,143
Financial Highlights & Ratios
PEG Ratio-0.08
Price to Book (P/B)0.76
Price to Sales (P/S)2.15
P/FCF Ratio7.60
Enterprise Value/Market Cap6.56
Enterprise Value/Revenue22.99
Enterprise Value/Gross Profit38.84
Enterprise Value/Ebitda25.65
Forecast
1Y Price Target
$7.00Price Target Upside-1.82% Downside
Rating ConsensusHold
Number of Analyst Covering1
Orchid Island Capital Business Overview & Revenue Model
Company DescriptionOrchid 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 portfolio includes traditional pass-through Agency RMBS, such as mortgage pass through certificates and collateralized mortgage obligations; and structured Agency RMBS comprising interest only securities, inverse interest only securities, and principal only securities. The company qualifies as a real estate investment trust for federal income tax purposes. Orchid Island Capital, Inc. was incorporated in 2010 and is based in Vero Beach, Florida.
How the Company Makes MoneyOrchid Island Capital generates revenue primarily through the interest income earned on its mortgage-backed securities portfolio. The company invests in both agency RMBS, which are guaranteed by government-sponsored entities, and non-agency RMBS, which are not backed by any government guarantees. The interest income is supplemented by potential capital appreciation of its securities and gains from trading activities. Additionally, the company may utilize leverage to enhance returns on its investments, borrowing against its securities to increase its investment capacity. Significant partnerships with financial institutions and mortgage servicers may also contribute to its earnings, as these relationships can provide access to a broader range of investment opportunities and market insights.
Orchid Island Capital Earnings Call Summary
Earnings Call Date:Jul 24, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a challenging quarter for Orchid Island Capital, marked by financial losses and increased market volatility. Despite these challenges, the company took strategic actions such as increasing its MBS portfolio, executing a successful share buyback, and maintaining stable funding. However, the increased prepayment speeds and negative total return reflect ongoing market challenges.Q2-2025 Updates
Positive Updates
Increased MBS Portfolio
The average MBS during the quarter was $6.9 billion compared to just under $6 billion in Q1, indicating a strategic increase in portfolio size.
Successful Share Buyback
Over 1.1 million shares were bought back early in the quarter at a substantial discount, showcasing a strategic move to strengthen financial positioning.
Strategic Portfolio Repositioning
Continued strategic shift towards higher coupon pools, increasing 5.5s, 6s, and 6.5s by $555 million, $145 million, and $86 million respectively.
Stable Repo Funding
Repo funding remained stable with a blended rate of 4.48% in the second quarter, with excess borrowing capacity available.
Strong Capital Position
Raised $140 million in new equity and deployed it into higher coupon specified pools, expanding the portfolio.
Negative Updates
Quarterly Losses
Reported a loss of $0.29 per share compared to income of $0.18 per share in Q1. Book value decreased from $7.94 per share at 3/31 to $7.21 at $6.30.
Negative Total Return
Total return for the quarter was negative 4.66% compared to 2.6% in Q1.
Market Volatility and Hedge Losses
Mark-to-market hedge losses totaled $0.47 per share or $53.8 million, mostly due to the sharp tightening in swap spreads.
Increased Prepayment Speeds
Prepayment speeds during Q2 were 10.1% compared to 7.8% in Q1, suggesting potential future challenges in earnings.
Company Guidance
During the second quarter of 2025, Orchid Island Capital reported a loss of $0.29 per share, a decrease from the income of $0.18 per share in the first quarter. Excluding realized and unrealized losses, the net income remained consistent at $0.16 per share. The book value per share decreased from $7.94 at the end of March to $7.21 by June 30. The total return for the quarter was negative 4.66%, compared to a positive 2.6% in Q1, and the company maintained dividends of $0.36 per share in both quarters. Average mortgage-backed securities (MBS) during the quarter increased to $6.9 billion from just under $6 billion in Q1, with a leverage ratio decrease from 7.8 to 7.3. Prepayment speeds rose to 10.1% compared to 7.8% in the previous quarter, and liquidity improved slightly to 54% from 52%.Orchid Island Capital Financial Statement Overview
Summary
Orchid Island Capital's financials depict a company with significant revenue and profitability fluctuations. While the balance sheet is strong with no debt, the revenue volatility and inconsistent cash flows indicate challenges in financial stability, impacting the company's ability to deliver consistent income.Income Statement
Orchid Island Capital has experienced significant volatility in its revenue over the years, with substantial losses in several periods. The most recent annual data shows zero revenue, making it difficult to assess profitability metrics like gross profit margin or net profit margin. The revenue growth rate has been highly unstable, indicating financial challenges in maintaining consistent income streams.45
Neutral
Balance Sheet
The company's balance sheet shows a stable equity position with stockholders' equity growing over time. The equity ratio indicates moderate reliance on own capital versus liabilities. The debt-to-equity ratio is favorable, reflecting no debt as of the latest period, which reduces financial risk. However, the fluctuating total assets and liabilities suggest potential volatility in financial structure.40
Negative
Cash Flow
Orchid Island Capital's cash flow statement reveals a mixed picture. The operating cash flow has shown improvement, but the free cash flow remains inconsistent. The operating cash flow to net income ratio is positive, indicating some efficiency in converting net income to cash. However, the free cash flow growth has been erratic, reflecting challenges in sustaining positive cash flows.50
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 299.13M | 236.97M | 154.93M | 10.94M | 129.16M | 91.06M |
| Gross Profit | 177.07M | 50.98M | 143.72M | -3.60M | 119.53M | 84.72M |
| EBITDA | 268.08M | 273.94M | 162.69M | -196.75M | -57.67M | 27.18M |
| Net Income | 6.41M | 37.66M | -39.23M | -258.45M | -64.76M | 2.13M |
Balance Sheet | ||||||
| Total Assets | 7.61B | 5.72B | 4.26B | 3.87B | 7.07B | 4.06B |
| Cash, Cash Equivalents and Short-Term Investments | 456.33M | 409.88M | 241.03M | 205.65M | 450.44M | 299.51M |
| Total Debt | 6.66B | 5.03B | 3.71B | 3.38B | 6.24B | 3.63B |
| Total Liabilities | 6.69B | 5.05B | 3.80B | 3.43B | 6.30B | 3.64B |
| Stockholders Equity | 911.96M | 668.50M | 469.94M | 438.76M | 768.10M | 415.29M |
Cash Flow | ||||||
| Free Cash Flow | 46.91M | 66.99M | 8.00M | 289.37M | 96.44M | 55.37M |
| Operating Cash Flow | 46.91M | 66.99M | 8.00M | 289.37M | 96.44M | 55.37M |
| Investing Cash Flow | -2.51B | -1.42B | -441.06M | 2.44B | -3.02B | -199.34M |
| Financing Cash Flow | 2.67B | 1.48B | 396.13M | -2.94B | 3.07B | 164.82M |
Orchid Island Capital Technical Analysis
Positive
7.13
Price Trends
6.92
Positive
6.77
Positive
6.81
Positive
Market Momentum
0.05
Negative
59.11
Neutral
84.66
Negative
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 7.13 is above the 20-day moving average (MA) of 6.98, above the 50-day MA of 6.92, and above the 200-day MA of 6.81, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 59.11 is Neutral, neither overbought nor oversold. The STOCH value of 84.66 is Negative, 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 72 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 |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
65 Neutral | $1.33B | 11.00 | 8.81% | 11.69% | 20.32% | 1.58% | |
63 Neutral | $1.09B | 10.71 | 7.32% | 11.05% | 4.83% | -25.07% | |
62 Neutral | $945.58M | 10.53 | 6.90% | 15.53% | -7.70% | 40.36% | |
54 Neutral | $1.10B | 17.39 | 5.50% | 12.70% | 1.71% | -56.69% | |
52 Neutral | $1.05B | 36.68 | 0.87% | 20.20% | 67.17% | ― | |
52 Neutral | $1.02B | 5.06 | -14.78% | 16.62% | -21.95% | -528.94% |
* Real Estate Sector Average
ORC
Orchid Island Capital
7.13
0.72
11.23%
CIM
Chimera Investment
13.39
-0.07
-0.52%
EFC
Ellington Financial
13.34
2.39
21.83%
MFA
MFA Financial
9.21
-1.19
-11.44%
TWO
Two Harbors
9.81
-1.29
-11.62%
PMT
PennyMac Mortgage
12.60
0.06
0.48%
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.