Is Cherry Hill Mortgage Investment Corp. overvalued or undervalued?

As of 6 May 2025, the valuation grade for Cherry Hill Mortgage Investment Corp. has moved from very attractive to risky, indicating a significant shift in its financial outlook. The company is currently assessed as overvalued given its troubling financial metrics, including a Price to Book Value of 0.44, an EV to EBIT ratio of 0.97, and an EV to Sales ratio of 0.44. These figures suggest that the market may not be accurately reflecting the company's underlying value, especially in light of its negative ROE of -2.96%.
In comparison to its peers, Cherry Hill's valuation appears unfavorable; for instance, AG Mortgage Investment Trust, Inc. has a P/E ratio of 4.27 and an EV to EBITDA of 0.205, while Seven Hills Realty Trust boasts a P/E of 10.34 and an EV to EBITDA of 2.58. The stark contrast in these ratios highlights the risk associated with Cherry Hill's current valuation. Despite a recent stock return of 12.88% year-to-date, the overall trend over the past year shows a decline of 23.98%, further reinforcing the notion that the company is overvalued in its current state.