Cherry Hill Mortgage Investment Q4 Revenue Steady As Rich P/E Challenges Bullish Narratives

Cherry Hill Mortgage Investment (CHMI) closed out FY 2025 with fourth quarter total revenue of US$14.2 million and basic EPS of US$0.14, setting the tone for how investors will read the full year. The company has seen revenue move across a wide range over recent periods, from US$21.8 million in Q4 2024 to US$10.9 million in Q3 2025 and US$14.2 million in Q4 2025, while basic EPS shifted from US$0.29 in Q4 2024 to US$0.05 in Q3 2025 and US$0.14 in Q4 2025. This puts the latest report in focus for what it might mean for REIT level margins and the sustainability of recent trends.

See our full analysis for Cherry Hill Mortgage Investment.

With the headline figures on the table, the next step is lining these results up against the prevailing narratives around Cherry Hill Mortgage Investment to see which stories hold up and which might need a rethink.

Curious how numbers become stories that shape markets? Explore Community Narratives

Profit swings on the path to profitability

• Across FY 2025, net income excluding extra items moved from a loss of US$9.3 million in Q1 to a profit of US$5.3 million in Q4, and over the last 12 months the company reported net income of US$0.8 million on a trailing basis.
• What stands out for a bullish view is that this move into profitability over the past year sits beside only modest five year earnings growth of 0.6% a year. This means the story is about a recent turn rather than a long, smooth track record.
  • Supporters who point to CHMI becoming profitable in the last 12 months can point straight to the FY 2025 swing from quarterly losses early in the year to positive net income in Q3 and Q4.
  • At the same time, the relatively small trailing profit of US$0.8 million shows that, while the bullish case leans on this turnaround, the earnings base is still quite thin in absolute terms.

High P/E of 125.5x versus mortgage REIT peers

• The stock carries a trailing P/E of 125.5x, compared with 9.6x for the US Mortgage REITs industry and 11.6x for peers, while the current share price is US$2.65.
• Critics highlight that such a high multiple heavily relies on strong earnings progress, and the provided forecast of very large 108.7% yearly earnings growth is doing a lot of the work to justify that gap to sector and peer averages.
  • Bears argue that with only US$0.8 million of trailing net income excluding extra items, the valuation multiple looks rich relative to the size of current earnings, especially next to much lower industry and peer P/E levels.
  • On the other hand, the very large earnings growth forecast means some investors may be willing to accept the higher multiple, although those projections are not yet visible in the historical FY 2025 numbers.

To see how other investors weigh this mix of thin trailing earnings and rich multiples, you can review the community view for CHMI in Curious how numbers become stories that shape markets? Explore Community Narratives.

15.09% yield with weak coverage and leverage pressure

• CHMI is reported to offer a 15.09% dividend yield, while earnings coverage of that payout is described as weak and operating cash flow does not comfortably cover debt obligations.
• Bears point to this combination as a core concern, because the same data that highlights a high income stream also flags that both dividend coverage and leverage are tight relative to cash generation.
  • The risk summary notes that debt is not well covered by operating cash flow, which can limit flexibility if earnings or cash flows soften from the recent FY 2025 profit levels.
  • Shareholder dilution over the past year, together with weak earnings coverage of the dividend, reinforces the cautious argument that income and balance sheet strength need close monitoring.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Cherry Hill Mortgage Investment's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

We have covered both the concerns and the bright spots, so now is the time to look through the numbers yourself and decide where you stand. To help you weigh those trade offs quickly, take a closer look at the 2 key rewards and 3 important warning signs and see how the risks and rewards line up for your own approach.

Explore Alternatives

CHMI’s thin trailing profit base, very high P/E multiple, and weak coverage of a 15.09% yield all point to elevated risk and balance sheet strain.

If those pressure points make you cautious, shift your focus to companies in our solid balance sheet and fundamentals stocks screener (41 results) that pair steadier finances with income potential and check them out today.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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