Ellington Credit (EARN) Stock: Buy, Sell, or Hold?
EARN - Ellington Credit Company
$3.63
0.05 (1.40%)
▲
5d:
+4.91%
30d:
-12.95%
90d:
-17.5%
BUY
HIGH Confidence
Analysis Updated: Oct 23, 2026 12:00 AM ET
Earnings: Nov 18, 2026
24d
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Interactive Price Chart (1 Month)
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Bottom Line:
✅ BUY SIGNAL: EARN appears deeply undervalued. Market expects -8.9% annual earnings decline despite 70% recent earnings growth. Contrarian opportunity at discount to historical valuation.
✅ BUY SIGNAL: EARN appears deeply undervalued. Market expects -8.9% annual earnings decline despite 70% recent earnings growth. Contrarian opportunity at discount to historical valuation.
Long-Term Wealth Forecast (2031)
Based on Analyst Consensus Growth & Historical Valuation
0% (Stagnation)
50% (Hyper Growth)
EST. PRICE IN 2031
$7.53
Based on 9.3% avg growth
INTRINSIC VALUE TODAY
$4.67
22.3% Margin of Safety
How this is calculated: We use a Growth Decay Model: starting with analyst consensus growth (adjusted above) and gradually slowing it down to a long-term terminal rate (4%) by Year 5. This provides a more realistic valuation than assuming constant hyper-growth. We then apply a 4.4x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: EARN is currently trading at $3.63, which is considered slightly low relative to its 30-day fair value range of $3.45 to $4.18. From a valuation perspective, the stock is trading at a discount (Forward PE: 3.3) compared to its historical average (4.4). Remarkably, the market is currently pricing in an annual earnings decline of 8.9% over the next few years. This pessimistic expectation contrasts with the company's recent 69.8% earnings growth, suggesting potential undervaluation if the company simply maintains stability.
Technical Outlook: Technically, EARN is in a strong downtrend. The price is approaching resistance at $3.67. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: EARN scores 70/100 on our bottoming-setup gauge — the chart has corrected and is stabilizing (RSI reset, momentum turning up), historically a favorable entry zone. Wall Street analysts see significant upside, with an average price target of $4.50 (+24.0%). Combining these factors, the current setup offers a favorable risk/reward ratio for buyers.
Technical Outlook: Technically, EARN is in a strong downtrend. The price is approaching resistance at $3.67. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: EARN scores 70/100 on our bottoming-setup gauge — the chart has corrected and is stabilizing (RSI reset, momentum turning up), historically a favorable entry zone. Wall Street analysts see significant upside, with an average price target of $4.50 (+24.0%). Combining these factors, the current setup offers a favorable risk/reward ratio for buyers.
Quick Decision Summary
Current Position
SLIGHTLY LOW
Historical Trading Range
$3.45 -
$4.18
Company Quality Score
56/100
(HOLD)
Volume Confirmation
HIGH
Confidence Score
90.5%
All Signals
- BULLISH: Price oversold vs 30-day range
- BULLISH: Strong technical setup (70/100)
- BULLISH: High volume confirmation
- BULLISH: Trading 24.0% below Wall St target ($4.50)
- BULLISH: Bottoming setup score 70/100 — corrected, stabilizing, and turning up
Trading Range Analysis
30-Day Trading Range
$3.45 -
$4.18
Current vs Trading Range
SLIGHTLY LOW
Support & Resistance Levels
Support Level
$3.22
Resistance Level
$3.67
Current Trend
Strong Downtrend
Technical data as of
Oct 23, 2026
Fundamental Context
Forward P/E (Next Year Est.)
3.30
Wall Street Target
$4.50
(+24.0%)
Revenue Growth (YoY)
-19.3%
Earnings Growth (YoY)
69.8%
Profit Margin
-81.2%
Valuation Discount vs History
-8.9% cheaper
PE vs Historical
3.3 vs 4.4
CHEAP
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
-8.9%
(market-implied from PE analysis)
1-Year Target
$3.31
(-9%)
2-Year Target
$3.01
(-17%)
3-Year Target
$2.74
(-24%)
3-Yr Target (if PE normalizes)
(PE: 3→4)
$3.66
(+1%)
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 19.9, Growth: 14.6%)
$32.87
(+805%)
Base:
(SPY PE: 3.3, Growth: 14.6%)
$5.46
(+50%)
Bear:
(PE: 2.8, Growth: 14.6%)
$4.64
(+28%)
💡
Upside Surprise Potential
If earnings stabilize (0% growth), PE could expand from 3.3 to 4.4
Stabilization Target:
$4.84
(+33.3%)
PE Expansion Potential:
+33.3%
Share & Embed Analysis
Last updated: October 24, 2026 2:00 PM ET
Data refreshes hourly during market hours. Next update: 3:00 PM
Data refreshes hourly during market hours. Next update: 3:00 PM
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Technical Signals Check
Is EARN showing a specific setup today?
Insider Activity (6 Months)
0
Buys
0
Sells
0
Net
NEUTRAL
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