Chimera Investment Corporation

AI-generated fair value estimate for this company.

Method: Justified price-to-book model using a normalized (through-cycle) ROE rather than the depressed TTM figure: $28.85 book value per share; normalized ROE of 6% (TTM ROE of ~0.05% reflects a one-off ~$84.5M loss year and is not representative of sustainable mortgage-REIT earning power); 11% cost of equity (elevated for CIM's levered, credit-sensitive non-agency/agency hybrid portfolio and troubled history); 2% long-run book value growth. Justified P/B = (0.06-0.02)/(0.11-0.02) = 0.444x; intrinsic value = 0.444 x $28.85 = $12.82.

Reasoning: Mortgage REITs are conventionally valued relative to book value given their leveraged, mark-to-market balance sheets rather than discrete operating FCF; CIM's TTM ROE is distorted by a large one-time loss, so a normalized through-cycle ROE better reflects sustainable earnings power while still applying a steep discount (0.44x book) reflecting CIM's history of book-value erosion and credit-sensitive non-agency exposure.