Is ARMOUR Residential REIT, Inc. overvalued or undervalued?

As of 12 February 2025, the valuation grade for ARMOUR Residential REIT, Inc. has moved from very attractive to risky, indicating a significant deterioration in its investment appeal. The company appears to be overvalued, particularly given its negative P/E ratio and a Price to Book Value of 0.79, which suggests that the market is pricing the stock above its book value despite the losses. Additionally, the EV to EBITDA ratio stands at 2.08, which is relatively low compared to peers, indicating potential inefficiencies in generating earnings relative to its enterprise value.
In comparison to its peers, AGNC Investment Corp. has a P/E ratio of 28.50 and an EV to EBITDA of 2.67, while Brixmor Property Group, Inc. shows a P/E of 25.73 and an EV to EBITDA of 9.76, both of which highlight ARMOUR's struggles in profitability and valuation. The stock has underperformed significantly against the S&P 500, with a year-to-date return of -21.79% compared to the S&P 500's 12.22%, reinforcing the notion that ARMOUR is not a favorable investment at this time.