Contrasting reAlpha Tech (NASDAQ:AIRE) & Ellington Financial (NYSE:EFC)

Ellington Financial (NYSE:EFC) and reAlpha Tech (NASDAQ:AIRE) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, institutional ownership, earnings and dividends.

Analyst Recommendations

This is a summary of current ratings and target prices for Ellington Financial and reAlpha Tech, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ellington Financial	0	1	3	1	3.00
reAlpha Tech	0	0	1	0	3.00

Ellington Financial presently has a consensus price target of $14.00, suggesting a potential upside of 4.83%. reAlpha Tech has a consensus price target of $3.00, suggesting a potential upside of 156.41%. Given reAlpha Tech’s higher probable upside, analysts plainly believe reAlpha Tech is more favorable than Ellington Financial.

Profitability

This table compares Ellington Financial and reAlpha Tech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ellington Financial	106.40%	10.26%	0.81%
reAlpha Tech	-2,035.17%	-45.22%	-36.74%

Volatility and Risk

Ellington Financial has a beta of 1.99, suggesting that its stock price is 99% more volatile than the S&P 500. Comparatively, reAlpha Tech has a beta of -7.44, suggesting that its stock price is 844% less volatile than the S&P 500.

Valuation and Earnings

This table compares Ellington Financial and reAlpha Tech”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ellington Financial	$282.19 million	4.29	$84.81 million	$1.38	9.68
reAlpha Tech	$321,095.00	167.81	N/A	N/A	N/A

Ellington Financial has higher revenue and earnings than reAlpha Tech.

Institutional and Insider Ownership

55.6% of Ellington Financial shares are held by institutional investors. Comparatively, 1.0% of reAlpha Tech shares are held by institutional investors. 4.4% of Ellington Financial shares are held by insiders. Comparatively, 73.9% of reAlpha Tech shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Ellington Financial beats reAlpha Tech on 8 of the 11 factors compared between the two stocks.

About Ellington Financial

Ellington Financial Inc., through its subsidiary, Ellington Financial Operating Partnership LLC, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States. The company acquires and manages residential mortgage-backed securities (RMBS) backed by prime jumbo, Alt-A, manufactured housing, and subprime mortgage; RMBS for which the principal and interest payments are guaranteed by the U.S. government agency or the U.S. government-sponsored entity; residential mortgage loans; commercial mortgage-backed securities; and commercial mortgage loans and other commercial real estate debt. It also provides collateralized loan obligations; mortgage-related and non-mortgage-related derivatives; corporate debt and equity securities; corporate loans; and other strategic investments; and consumer loans and asset-backed securities backed by consumer and commercial assets. The company qualifies as a real estate investment trust (REIT) for federal income tax purposes. As a REIT, it intends to distribute at least 90% of its taxable income as dividends to shareholders. Ellington Financial LLC was incorporated in 2007 and is headquartered in Old Greenwich, Connecticut.

About reAlpha Tech

reAlpha Tech Corp., a real estate technology company, commercializes artificial intelligence (AI)-powered technologies. The company operates in two segments, Platform Services and Rental Business. The company offers and develops AI-based products and services to customers in the real-estate industry. These include reAlpha BRAIN, which utilizes a natural language processing program to scan through property data and choose the ones with a higher than expected industry standard return on investment; reAlpha HUMINT, which allows analysts to input qualitative features about a property and factor it into property evaluation; GENA to generate home descriptions; AIRE, a web-based AI application that provides data and insights about the real estate market; and reAlpha App, which allows syndicate members to acquire equity interests in the syndication LLC. It also leases short-term rental properties; and provides technical support services. The company was formerly known as eAlpha Asset Management, Inc. and changed its name to reAlpha Tech Corp. in March 2023. reAlpha Tech Corp. was founded in 2020 and is headquartered in Dublin, Ohio.