CHMI Should I Buy
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Cherry Hill Mortgage Investment Corp (CHMI) is not a strong buy at this moment for a beginner investor with a long-term focus. While the stock shows some positive financial performance in Q4 2025, the technical indicators, options sentiment, and mixed financial trends suggest a cautious approach. The lack of strong trading signals and limited upside potential based on current data make it more prudent to hold off on investing for now.
The MACD is slightly positive, suggesting a mild bullish momentum, but the RSI is neutral at 58.725, indicating no strong trend. Moving averages are bearish (SMA_200 > SMA_20 > SMA_5), and the stock is trading near its pivot point of 2.603, with resistance at 2.652 and support at 2.553. Overall, the technicals do not indicate a strong buy signal.
Q4 2025 net income of $5.3 million and an increase in book value per common share to $3.44 indicate improved financial performance.
Strong liquidity with $55 million in unrestricted cash and a leverage ratio of 5.4x.
Optimism from management about growth opportunities through the Real Genius partnership.
The company has only beaten EPS estimates 25% of the time and revenue estimates 13% of the time over the past two years, reflecting inconsistent performance.
Downgrades on preferred shares indicate market concerns about financial health.
Mixed YoY financial performance in Q3 2025, with revenue growth but significant declines in net income, EPS, and gross margin.
In Q4 2025, the company reported net income of $5.3 million, reflecting improved financial performance. However, Q3 2025 showed mixed results: revenue increased by 124.37% YoY, but net income dropped by -113.22%, EPS fell by -110.20%, and gross margin declined by -153.97%. This inconsistency raises concerns about long-term financial stability.
Citizens raised the price target to $3 from $2.75 and maintained an Outperform rating. Analysts highlight positive book value performance for Agency MREITs and stable credit spreads, but the lack of upward EPS revisions and conservative market outlook temper enthusiasm.
