Armour Residential Reit (ARR) Shares Soar 3.59% to Year High on Earnings Turnaround

The share price of Armour Residential Reit (ARR) climbed to its highest level since the start of the year on Jan. 6, surging 0.77% intraday after a three-day rally that pushed the stock up 3.59% in cumulative gains.

The rebound reflects a sharp turnaround in ARR’s quarterly financial performance, with earnings per share jumping to $0.72 from a $0.75 loss in the prior quarter. Revenue surged to $172.54 million, reversing a $61.26 million decline in the previous period. Analysts attribute the recovery to strategic adjustments in its investment portfolio and improved market conditions, though the company’s trailing 12-month net profit margin of 55.26% remains a standout metric amid industry norms.

However, ARR’s 781.24% debt-to-equity ratio—a leveraged profile far exceeding typical thresholds—casts a long shadow over its near-term outlook. The high leverage amplifies vulnerability to interest rate fluctuations and refinancing risks, particularly as the firm’s mortgage-backed securities portfolio faces valuation pressures in a rising-rate environment. While robust quarterly earnings have buoyed investor sentiment, the balance sheet’s structural risks underscore a precarious trade-off between short-term momentum and long-term sustainability.