ARES COMMERCIAL REAL ESTATE (ACRE) Stock Fundamental Analysis
NYSE:ACRE - New York Stock Exchange, Inc. - US04013V1089 - REIT - Currency: USD
ACRE gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 66 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. ACRE scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. ACRE is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
ACRE had negative earnings in the past year.
ACRE had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: ACRE reported negative net income in multiple years.
Each year in the past 5 years ACRE had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of -0.88%, ACRE is not doing good in the industry: 77.61% of the companies in the same industry are doing better.
With a Return On Equity value of -2.46%, ACRE is not doing good in the industry: 77.61% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.88% | ||
| ROE | -2.46% | ||
| ROIC | N/A |
ROA(3y)-0.84%
ROA(5y)0.18%
ROE(3y)-2.9%
ROE(5y)0.96%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Gross Margin, with a value of 34.37%, ACRE is in the better half of the industry, outperforming 73.13% of the companies in the same industry.
In the last couple of years the Gross Margin of ACRE has declined.
ACRE does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 34.37% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-16.69%
GM growth 5Y-7.42%
2. Health
2.1 Basic Checks
ACRE does not have a ROIC to compare to the WACC, probably because it is not profitable.
Compared to 1 year ago, ACRE has more shares outstanding
The number of shares outstanding for ACRE has been increased compared to 5 years ago.
The debt/assets ratio for ACRE has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.07, we must say that ACRE is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of ACRE (0.07) is better than 64.18% of its industry peers.
The Debt to FCF ratio of ACRE is 29.70, which is on the high side as it means it would take ACRE, 29.70 years of fcf income to pay off all of its debts.
ACRE's Debt to FCF ratio of 29.70 is amongst the best of the industry. ACRE outperforms 80.60% of its industry peers.
ACRE has a Debt/Equity ratio of 1.74. This is a high value indicating a heavy dependency on external financing.
With an excellent Debt to Equity ratio value of 1.74, ACRE belongs to the best of the industry, outperforming 83.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.74 | ||
| Debt/FCF | 29.7 | ||
| Altman-Z | 0.07 |
ROIC/WACCN/A
WACC7.19%
2.3 Liquidity
ACRE has a Current Ratio of 10.00. This indicates that ACRE is financially healthy and has no problem in meeting its short term obligations.
ACRE has a Current ratio of 10.00. This is amongst the best in the industry. ACRE outperforms 97.01% of its industry peers.
A Quick Ratio of 10.00 indicates that ACRE has no problem at all paying its short term obligations.
ACRE has a better Quick ratio (10.00) than 97.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 10 | ||
| Quick Ratio | 10 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 69.88% over the past year.
ACRE shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -19.61%.
Measured over the past years, ACRE shows a small growth in Revenue. The Revenue has been growing by 4.67% on average per year.
EPS 1Y (TTM)69.88%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%173.91%
Revenue 1Y (TTM)-19.61%
Revenue growth 3Y4.91%
Revenue growth 5Y4.67%
Sales Q2Q%-20.03%
3.2 Future
The Earnings Per Share is expected to grow by 46.52% on average over the next years. This is a very strong growth
The Revenue is expected to decrease by -1.42% on average over the next years.
EPS Next Y133.22%
EPS Next 2Y57.69%
EPS Next 3Y46.52%
EPS Next 5YN/A
Revenue Next Year-17.41%
Revenue Next 2Y-12.55%
Revenue Next 3Y-1.42%
Revenue Next 5YN/A
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
ACRE reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
Based on the Price/Forward Earnings ratio of 14.01, the valuation of ACRE can be described as correct.
The rest of the industry has a similar Price/Forward Earnings ratio as ACRE.
ACRE's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 36.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 14.01 |
4.2 Price Multiples
76.12% of the companies in the same industry are more expensive than ACRE, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.66 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ACRE's earnings are expected to grow with 46.52% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y57.69%
EPS Next 3Y46.52%
5. Dividend
5.1 Amount
ACRE has a Yearly Dividend Yield of 13.30%, which is a nice return.
ACRE's Dividend Yield is a higher than the industry average which is at 11.88.
ACRE's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.3% |
5.2 History
The dividend of ACRE decreases each year by -3.33%.
ACRE has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-3.33%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
The earnings of ACRE are negative and hence is the payout ratio. ACRE will probably not be able to sustain this dividend level.
DP-415.36%
EPS Next 2Y57.69%
EPS Next 3Y46.52%
4.43
-0.08 (-1.77%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners44.9%
Inst Owner Change-0.01%
Ins Owners5.61%
Ins Owner Change7.33%
Market Cap243.69M
Analysts48.33
Price Target5.18 (16.93%)
Short Float %3.37%
Short Ratio3.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.3% |
Yearly Dividend1.1
Dividend Growth(5Y)-3.33%
DP-415.36%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)8.79%
Min Revenue beat(2)6.97%
Max Revenue beat(2)10.61%
Revenue beat(4)2
Avg Revenue beat(4)0.65%
Min Revenue beat(4)-12.52%
Max Revenue beat(4)10.61%
Revenue beat(8)3
Avg Revenue beat(8)-5.77%
Revenue beat(12)6
Avg Revenue beat(12)15.5%
Revenue beat(16)10
Avg Revenue beat(16)30.78%
PT rev (1m)1.5%
PT rev (3m)-4.47%
EPS NQ rev (1m)0%
EPS NQ rev (3m)241.65%
EPS NY rev (1m)0%
EPS NY rev (3m)297.56%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.46%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 14.01 | ||
| P/S | 1.51 | ||
| P/FCF | 7.66 | ||
| P/OCF | 7.57 | ||
| P/B | 0.45 | ||
| P/tB | 0.45 | ||
| EV/EBITDA | N/A |
EPS(TTM)-0.25
EYN/A
EPS(NY)0.32
Fwd EY7.14%
FCF(TTM)0.58
FCFY13.05%
OCF(TTM)0.59
OCFY13.21%
SpS2.93
BVpS9.86
TBVpS9.86
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.88% | ||
| ROE | -2.46% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 34.37% | ||
| FCFM | 19.72% |
ROA(3y)-0.84%
ROA(5y)0.18%
ROE(3y)-2.9%
ROE(5y)0.96%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-16.69%
GM growth 5Y-7.42%
F-Score6
Asset Turnover0.11
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.74 | ||
| Debt/FCF | 29.7 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 10 | ||
| Quick Ratio | 10 | ||
| Altman-Z | 0.07 |
F-Score6
WACC7.19%
ROIC/WACCN/A
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)0.07%
Cap/Sales(5y)0.1%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)69.88%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%173.91%
EPS Next Y133.22%
EPS Next 2Y57.69%
EPS Next 3Y46.52%
EPS Next 5YN/A
Revenue 1Y (TTM)-19.61%
Revenue growth 3Y4.91%
Revenue growth 5Y4.67%
Sales Q2Q%-20.03%
Revenue Next Year-17.41%
Revenue Next 2Y-12.55%
Revenue Next 3Y-1.42%
Revenue Next 5YN/A
EBIT growth 1Y76%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year54.78%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-39.18%
FCF growth 3Y-10.02%
FCF growth 5Y2.7%
OCF growth 1Y-38.47%
OCF growth 3Y-9.77%
OCF growth 5Y1.81%