ARES COMMERCIAL REAL ESTATE (ACRE) Stock Fundamental Analysis
NYSE:ACRE - New York Stock Exchange, Inc. - US04013V1089 - REIT - Currency: USD
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. The financial health of ACRE is average, but there are quite some concerns on its profitability. ACRE is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year ACRE has reported negative net income.
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.
In the past 5 years ACRE always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of -0.88%, ACRE is not doing good in the industry: 76.92% of the companies in the same industry are doing better.
ACRE has a Return On Equity of -2.46%. This is in the lower half of the industry: ACRE underperforms 76.92% of its industry peers.
| 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
The Gross Margin of ACRE (34.37%) is better than 73.85% of its industry peers.
ACRE's Gross Margin has declined in the last couple of years.
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 | 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.
ACRE has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.08, we must say that ACRE is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of ACRE (0.08) is better than 66.15% of its industry peers.
ACRE has a debt to FCF ratio of 29.70. This is a negative value and a sign of low solvency as ACRE would need 29.70 years to pay back of all of its debts.
ACRE has a better Debt to FCF ratio (29.70) than 80.00% of its industry peers.
A Debt/Equity ratio of 1.74 is on the high side and indicates that ACRE has dependencies on debt financing.
The Debt to Equity ratio of ACRE (1.74) is better than 83.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.74 | ||
| Debt/FCF | 29.7 | ||
| Altman-Z | 0.08 |
ROIC/WACCN/A
WACC7.15%
2.3 Liquidity
A Current Ratio of 10.00 indicates that ACRE has no problem at all paying its short term obligations.
The Current ratio of ACRE (10.00) is better than 96.92% 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 Quick ratio of 10.00. This is amongst the best in the industry. ACRE outperforms 96.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 10 | ||
| Quick Ratio | 10 |
3. Growth
3.1 Past
ACRE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 69.88%, which is quite impressive.
The Revenue for ACRE has decreased by -19.61% in the past year. This is quite bad
The Revenue has been growing slightly by 4.67% on average over the past years.
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
ACRE is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 47.97% yearly.
Based on estimates for the next years, ACRE will show a decrease in Revenue. The Revenue will decrease by -1.42% on average per year.
EPS Next Y132.64%
EPS Next 2Y55.88%
EPS Next 3Y47.97%
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
The Price/Earnings Ratio is negative for ACRE. In the last year negative earnings were reported.
With a Price/Forward Earnings ratio of 17.14, ACRE is valued on the expensive side.
Based on the Price/Forward Earnings ratio, ACRE is valued a bit more expensive than the industry average as 67.69% of the companies are valued more cheaply.
ACRE's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.25.
| 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 73.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.28 | ||
| 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 47.97% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y55.88%
EPS Next 3Y47.97%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 12.85%, ACRE is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 13.76, ACRE has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.39, ACRE pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 12.85% |
5.2 History
The dividend of ACRE decreases each year by -3.33%.
ACRE has been paying a dividend for at least 10 years, so it has 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 2Y55.88%
EPS Next 3Y47.97%
4.79
+0.12 (+2.57%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners45.32%
Inst Owner Change0.69%
Ins Owners5.72%
Ins Owner Change15.08%
Market Cap263.50M
Analysts48.33
Price Target5.1 (6.47%)
Short Float %3.72%
Short Ratio3.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 12.85% |
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)6.67%
PT rev (3m)-16.67%
EPS NQ rev (1m)241.65%
EPS NQ rev (3m)-32.55%
EPS NY rev (1m)294.14%
EPS NY rev (3m)185.48%
Revenue NQ rev (1m)-3.46%
Revenue NQ rev (3m)-2.16%
Revenue NY rev (1m)12.44%
Revenue NY rev (3m)-9.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 17.14 | ||
| P/S | 1.63 | ||
| P/FCF | 8.28 | ||
| P/OCF | 8.19 | ||
| P/B | 0.49 | ||
| P/tB | 0.49 | ||
| EV/EBITDA | N/A |
EPS(TTM)-0.25
EYN/A
EPS(NY)0.28
Fwd EY5.83%
FCF(TTM)0.58
FCFY12.07%
OCF(TTM)0.59
OCFY12.21%
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 | 0.08 |
F-Score6
WACC7.15%
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 Y132.64%
EPS Next 2Y55.88%
EPS Next 3Y47.97%
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%