Is Ellington Credit Co. overvalued or undervalued?

As of 20 May 2025, the valuation grade for Ellington Credit Co. has moved from very attractive to risky, indicating a significant shift in its market perception. The company appears to be overvalued at its current price of $5.73, particularly when compared to its peers. Key ratios include a P/E ratio of 10, a Price to Book Value of 1.11, and an EV to EBITDA of 7.30, which suggest that the company's valuation metrics are not as favorable as those of its competitors.
In comparison, AG Mortgage Investment Trust, Inc. has a P/E 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, both of which reflect more attractive valuations. Furthermore, Ellington's recent stock performance has lagged behind the S&P 500, with a YTD return of -13.44% compared to the index's 2.44%. This combination of factors reinforces the conclusion that Ellington Credit Co. is currently overvalued.