ARES COMMERCIAL REAL ESTATE (ACRE) Stock Fundamental Analysis
NYSE:ACRE - US04013V1089 - REIT
4.72 USD
+0.05 (+1.07%)
4.72 USD
0 (0%)
ACRE gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 67 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. The financial health of ACRE is average, but there are quite some concerns on its profitability. ACRE has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year ACRE has reported negative net income.
In the past year ACRE had a positive cash flow from operations.
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
ACRE has a worse Return On Assets (-1.27%) than 77.61% of its industry peers.
ACRE has a Return On Equity of -3.48%. This is in the lower half of the industry: ACRE underperforms 70.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.27% | ||
| ROE | -3.48% | ||
| 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
ACRE has a Gross Margin of 35.33%. This is in the better half of the industry: ACRE outperforms 76.12% of its industry peers.
ACRE's Gross Margin has declined in the last couple of years.
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 | 35.33% |
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.
The number of shares outstanding for ACRE has been increased compared to 1 year ago.
ACRE has more shares outstanding than it did 5 years ago.
The debt/assets ratio for ACRE has been reduced compared to a year ago.
2.2 Solvency
ACRE has an Altman-Z score of 0.01. This is a bad value and indicates that ACRE is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of ACRE (0.01) is better than 61.19% of its industry peers.
ACRE has a debt to FCF ratio of 32.78. This is a negative value and a sign of low solvency as ACRE would need 32.78 years to pay back of all of its debts.
The Debt to FCF ratio of ACRE (32.78) is better than 79.10% of its industry peers.
A Debt/Equity ratio of 1.70 is on the high side and indicates that ACRE has dependencies on debt financing.
ACRE has a Debt to Equity ratio of 1.70. This is amongst the best in the industry. ACRE outperforms 92.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.7 | ||
| Debt/FCF | 32.78 | ||
| Altman-Z | 0.01 |
ROIC/WACCN/A
WACC7.19%
2.3 Liquidity
A Current Ratio of 7.19 indicates that ACRE has no problem at all paying its short term obligations.
The Current ratio of ACRE (7.19) is better than 97.01% of its industry peers.
A Quick Ratio of 7.19 indicates that ACRE has no problem at all paying its short term obligations.
The Quick ratio of ACRE (7.19) is better than 97.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 7.19 | ||
| Quick Ratio | 7.19 |
3. Growth
3.1 Past
ACRE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 62.22%, which is quite impressive.
ACRE shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -24.51%.
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)62.22%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-81.82%
Revenue 1Y (TTM)-24.51%
Revenue growth 3Y4.91%
Revenue growth 5Y4.67%
Sales Q2Q%-25.19%
3.2 Future
ACRE is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 39.35% yearly.
The Revenue is expected to decrease by -4.90% on average over the next years.
EPS Next Y130.6%
EPS Next 2Y55.68%
EPS Next 3Y39.35%
EPS Next 5YN/A
Revenue Next Year-21.67%
Revenue Next 2Y-18.9%
Revenue Next 3Y-4.9%
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.
ACRE is valuated rather expensively with a Price/Forward Earnings ratio of 17.14.
Based on the Price/Forward Earnings ratio, ACRE is valued a bit more expensive than the industry average as 65.67% of the companies are valued more cheaply.
When comparing the Price/Forward Earnings ratio of ACRE to the average of the S&P500 Index (22.72), we can say ACRE is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 17.14 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, ACRE is valued a bit cheaper than the industry average as 74.63% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.58 | ||
| 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 39.35% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y55.68%
EPS Next 3Y39.35%
5. Dividend
5.1 Amount
ACRE has a Yearly Dividend Yield of 13.76%, which is a nice return.
ACRE's Dividend Yield is a higher than the industry average which is at 12.25.
Compared to an average S&P500 Dividend Yield of 2.34, ACRE pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.76% |
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-273.66%
EPS Next 2Y55.68%
EPS Next 3Y39.35%
4.72
+0.05 (+1.07%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners45.18%
Inst Owner Change0.04%
Ins Owners5.61%
Ins Owner Change9.61%
Market Cap259.65M
Analysts48.33
Price Target4.53 (-4.03%)
Short Float %2.98%
Short Ratio3.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.76% |
Yearly Dividend1.1
Dividend Growth(5Y)-3.33%
DP-273.66%
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)1
Avg Revenue beat(2)-2.05%
Min Revenue beat(2)-11.08%
Max Revenue beat(2)6.97%
Revenue beat(4)2
Avg Revenue beat(4)1.01%
Min Revenue beat(4)-11.08%
Max Revenue beat(4)10.61%
Revenue beat(8)3
Avg Revenue beat(8)-6.2%
Revenue beat(12)5
Avg Revenue beat(12)8.57%
Revenue beat(16)9
Avg Revenue beat(16)26.36%
PT rev (1m)-12.56%
PT rev (3m)-5.33%
EPS NQ rev (1m)-60%
EPS NQ rev (3m)-78.18%
EPS NY rev (1m)-7.88%
EPS NY rev (3m)-6.25%
Revenue NQ rev (1m)-0.26%
Revenue NQ rev (3m)-9.9%
Revenue NY rev (1m)-5.16%
Revenue NY rev (3m)8.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 17.14 | ||
| P/S | 1.78 | ||
| P/FCF | 9.58 | ||
| P/OCF | 9.14 | ||
| P/B | 0.5 | ||
| P/tB | 0.5 | ||
| EV/EBITDA | N/A |
EPS(TTM)-0.34
EYN/A
EPS(NY)0.28
Fwd EY5.83%
FCF(TTM)0.49
FCFY10.44%
OCF(TTM)0.52
OCFY10.94%
SpS2.65
BVpS9.52
TBVpS9.52
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.27% | ||
| ROE | -3.48% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 35.33% | ||
| FCFM | 18.61% |
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-Score7
Asset Turnover0.1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.7 | ||
| Debt/FCF | 32.78 | ||
| 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 | 7.19 | ||
| Quick Ratio | 7.19 | ||
| Altman-Z | 0.01 |
F-Score7
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)62.22%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-81.82%
EPS Next Y130.6%
EPS Next 2Y55.68%
EPS Next 3Y39.35%
EPS Next 5YN/A
Revenue 1Y (TTM)-24.51%
Revenue growth 3Y4.91%
Revenue growth 5Y4.67%
Sales Q2Q%-25.19%
Revenue Next Year-21.67%
Revenue Next 2Y-18.9%
Revenue Next 3Y-4.9%
Revenue Next 5YN/A
EBIT growth 1Y67.84%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year54.78%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-47.07%
FCF growth 3Y-10.02%
FCF growth 5Y2.7%
OCF growth 1Y-44.54%
OCF growth 3Y-9.77%
OCF growth 5Y1.81%