ARES COMMERCIAL REAL ESTATE (ACRE)
US04013V1089 - REIT
Overall ACRE gets a fundamental rating of 4 out of 10. We evaluated ACRE against 65 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. While ACRE seems to be doing ok healthwise, there are quite some concerns on its profitability. ACRE does not seem to be growing, but still is valued expensively.
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.
Of the past 5 years ACRE 4 years were profitable.
ACRE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ACRE has a worse Return On Assets (-1.71%) than 89.23% of its industry peers.
Looking at the Return On Equity, with a value of -6.21%, ACRE is doing worse than 89.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.71% | ||
| ROE | -6.21% | ||
| ROIC | N/A |
ROA(3y)0.59%
ROA(5y)1%
ROE(3y)2.23%
ROE(5y)4%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
ACRE has a better Gross Margin (39.82%) than 61.54% of its industry peers.
In the last couple of years the Gross Margin of ACRE has remained more or less at the same level.
The Profit Margin and Operating Margin are not available for ACRE so they could not be analyzed.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 39.82% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-9.75%
GM growth 5Y-0.33%
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 less shares outstanding
Compared to 5 years ago, ACRE has more shares outstanding
Compared to 1 year ago, ACRE has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.10, we must say that ACRE is in the distress zone and has some risk of bankruptcy.
ACRE has a Altman-Z score of 0.10. This is in the better half of the industry: ACRE outperforms 61.54% of its industry peers.
The Debt to FCF ratio of ACRE is 34.56, which is on the high side as it means it would take ACRE, 34.56 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 34.56, ACRE is in the better half of the industry, outperforming 66.15% of the companies in the same industry.
ACRE has a Debt/Equity ratio of 2.58. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 2.58, ACRE is in the better half of the industry, outperforming 70.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.58 | ||
| Debt/FCF | 34.56 | ||
| Altman-Z | 0.1 |
ROIC/WACCN/A
WACC6.74%
2.3 Liquidity
ACRE has a Current Ratio of 4.94. This indicates that ACRE is financially healthy and has no problem in meeting its short term obligations.
ACRE has a better Current ratio (4.94) than 93.85% of its industry peers.
ACRE has a Quick Ratio of 4.94. This indicates that ACRE is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 4.94, ACRE belongs to the top of the industry, outperforming 93.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.94 | ||
| Quick Ratio | 4.94 |
3. Growth
3.1 Past
The earnings per share for ACRE have decreased strongly by -220.00% in the last year.
The Revenue has grown by 17.21% in the past year. This is quite good.
Measured over the past years, ACRE shows a quite strong growth in Revenue. The Revenue has been growing by 11.36% on average per year.
EPS 1Y (TTM)-220%
EPS 3YN/A
EPS 5YN/A
EPS growth Q2Q-1560%
Revenue 1Y (TTM)17.21%
Revenue growth 3Y14.6%
Revenue growth 5Y11.36%
Revenue growth Q2Q-9.59%
3.2 Future
Based on estimates for the next years, ACRE will show a very strong growth in Earnings Per Share. The EPS will grow by 49.99% on average per year.
ACRE is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -8.28% yearly.
EPS Next Y111.1%
EPS Next 2Y77.01%
EPS Next 3Y49.99%
EPS Next 5YN/A
Revenue Next Year-30.39%
Revenue Next 2Y-17.04%
Revenue Next 3Y-8.28%
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
The Price/Earnings Ratio is negative for ACRE. In the last year negative earnings were reported.
Based on the Price/Forward Earnings ratio of 86.80, the valuation of ACRE can be described as expensive.
93.85% of the companies in the same industry are cheaper than ACRE, based on the Price/Forward Earnings ratio.
ACRE's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 20.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 86.8 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, ACRE is valued a bit cheaper than 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.07 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
ACRE's 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 49.99% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y77.01%
EPS Next 3Y49.99%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 14.31%, ACRE is a good candidate for dividend investing.
In the last 3 months the price of ACRE has falen by -25.35%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 13.07, ACRE pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.41, ACRE pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.31% |
5.2 History
The dividend of ACRE has a limited annual growth rate of 4.58%.
ACRE has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.58%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
ACRE has negative earnings and hence a negative payout ratio. The dividend may be in danger.
The dividend of ACRE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-195.39%
EPS Next 2Y77.01%
EPS Next 3Y49.99%
ARES COMMERCIAL REAL ESTATE
NYSE:ACRE (5/6/2024, 12:19:30 PM)
6.935
+0.01 (+0.22%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap377.40M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.31% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 86.8 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.71% | ||
| ROE | -6.21% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 39.82% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.58 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 4.94 | ||
| Quick Ratio | 4.94 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-220%
EPS 3YN/A
EPS 5Y
EPS growth Q2Q
EPS Next Y111.1%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)17.21%
Revenue growth 3Y14.6%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y