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Arbor Realty Trust (ABR)
NYSE:ABR
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Arbor Realty
(NYSE:ABR)
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Rating:73Outperform
Price Target:
$13.00
â–²(12.65% Upside)
Arbor Realty's overall stock score reflects strong corporate events and attractive valuation, balanced by stable financial performance and moderate technical indicators. The company's strategic initiatives and high dividend yield are key strengths, while revenue and cash flow declines pose challenges.
Positive Factors
Strong Capital Market Transactions
Arbor Realty's significant capital market transactions, including a pioneering build-to-rent securitization, enhance its financial flexibility and market presence, supporting long-term growth and operational capabilities.
High Profitability and Margins
Arbor Realty's high profitability and strong margins demonstrate effective cost management and robust business operations, providing a solid foundation for sustainable long-term growth.
Expansion in Single-Family Rental Business
The expansion into the single-family rental market supports Arbor Realty's diversification strategy, offering new revenue streams and enhancing its competitive position in the real estate sector.
Negative Factors
Declining Revenue
The significant decline in revenue indicates potential challenges in maintaining growth momentum, which could impact Arbor Realty's ability to invest in new opportunities and sustain its competitive edge.
Significant REO and Delinquency Challenges
High levels of REO assets and delinquencies can strain resources and impact profitability, posing a risk to Arbor Realty's financial stability and operational efficiency in the long term.
Impact of Elevated Rate Environment
The challenging interest rate environment may hinder Arbor Realty's ability to originate loans and transition borrowers, potentially affecting revenue and growth prospects in the coming months.
Arbor Realty (ABR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.24B
Dividend Yield12.51%
Average Volume (3M)2.23M
Price to Earnings (P/E)13.2
Beta (1Y)0.67
Revenue Growth-17.43%
EPS Growth-37.71%
CountryUS
Employees659
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.25
Shares Outstanding192,301,400
10 Day Avg. Volume1,921,258
30 Day Avg. Volume2,226,495
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap5.69
Enterprise Value/Revenue16.54
Enterprise Value/Gross Profit18.06
Enterprise Value/Ebitda12.27
Forecast
1Y Price Target
$11.63Price Target Upside0.78% Upside
Rating ConsensusHold
Number of Analyst Covering4
Arbor Realty Business Overview & Revenue Model
Company DescriptionArbor Realty (ABR) is a leading real estate investment trust (REIT) that specializes in multifamily and commercial real estate financing. The company operates primarily in the sectors of mortgage banking and property management, providing a range of financial products including bridge loans, permanent loans, and structured financing solutions. Arbor Realty focuses on enhancing the value of its real estate assets through strategic investments and partnerships, catering to a diverse clientele that includes property owners, developers, and investors.
How the Company Makes MoneyArbor Realty generates revenue through various channels, primarily by originating, underwriting, and servicing loans secured by real estate. Key revenue streams include interest income from loans, fees from loan origination, and servicing fees from managing loan portfolios. Additionally, the company earns income from its investments in real estate and related assets. Significant partnerships with institutional investors and financial institutions further bolster its funding capabilities, allowing Arbor Realty to expand its lending operations and optimize returns on its real estate investments.
Arbor Realty Earnings Call Summary
Earnings Call Date:Aug 01, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 24, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of significant achievements, particularly in capital market transactions and agency business performance, juxtaposed with challenges related to REO assets and the impact of prolonged elevated interest rates on the business. While the company is making strategic moves to mitigate these challenges, such as successful debt offerings and securitization, the current environment presents a transitional year with both potential and hurdles.Q2-2025 Updates
Positive Updates
Successful Unsecured Debt Offering
Arbor Realty Trust completed its first high-yield unsecured debt offering, raising $500 million, which was used to pay off convertible debt and add $200 million in liquidity. The offering received a BB rating from Moody's and Fitch.
Significant Capital Market Transactions
The company completed a series of capital market transactions totaling $2.5 billion, including the first build-to-rent securitization in the industry, totaling $800 million.
Strong Agency Business Performance
Arbor Realty originated $850 million in loans in the second quarter and $1.5 billion for the first six months. July saw unprecedented origination of $1 billion in agency loans.
Growth in Single-Family Rental Business
The company had a strong second quarter with approximately $230 million in new single-family rental business, contributing to mid-to-high returns on capital.
Construction Lending Business Progress
Arbor Realty closed $265 million in construction lending deals in the first six months and another $144 million in July, with a strong pipeline for further growth.
Negative Updates
Significant REO and Delinquency Challenges
Arbor Realty took back approximately $188 million of REO assets in Q2, with expectations to own and operate $400 million to $600 million in REO assets, slightly above previous guidance.
Impact of Prolonged Elevated Rate Environment
The prolonged elevated rate environment is affecting the agency originations business and ability for borrowers to transition to fixed rate loans, creating a challenging climate.
Reduction in Net Interest Income
Net interest income dropped from $75 million in Q1 to $69 million in Q2 due to additional delinquencies and less back interest collected on delinquent loans.
Realized Losses on REO Assets
The company realized $10.5 million of onetime losses from the sale of two REO assets in the second quarter.
Company Guidance
During the Arbor Realty Trust Second Quarter 2025 Earnings Conference Call, CEO Ivan Kaufman highlighted several key financial metrics and strategic initiatives. The company successfully completed its first high-yield unsecured debt offering, raising $500 million, which contributed to a total of $2.5 billion in capital market transactions for the first half of 2025. Arbor reported distributable earnings of $0.30 per share for the quarter, resulting in a 10% return on equity. The company also achieved a BB corporate credit rating from Moody's and Fitch. Arbor's agency loan originations reached $850 million for the second quarter, with a strong pipeline expected to result in $2 billion for the third quarter. Additionally, Arbor expanded its single-family rental business with $230 million in new business, and its overall delinquencies decreased from $654 million to $529 million quarter-over-quarter. The company anticipates REO assets to range between $400 million and $600 million, slightly above previous guidance. Despite the challenges posed by the elevated interest rate environment, Arbor remains optimistic about its growth prospects and aims to increase earnings and dividends in 2026, positioning 2025 as a transitional year.Arbor Realty Financial Statement Overview
Summary
Arbor Realty's financial performance is solid with high profitability and efficient cash generation. However, declining revenue and free cash flow are concerns, despite strong margins and manageable debt levels.Income Statement
Arbor Realty's income statement shows a robust TTM gross profit margin of 81.23% and a net profit margin of 40.88%, indicating effective cost management and profitability. The TTM EBIT margin is also strong at 57.55%. However, there is a noticeable decline in revenue from $719 million in 2023 to $497.65 million in the TTM period, indicating a revenue contraction of 30.8%, which is a concern.75
Positive
Balance Sheet
The balance sheet reveals a healthy TTM equity ratio of 21.93%, suggesting a solid capital structure, but the debt-to-equity ratio stands at 0.097, indicating a manageable level of debt. Return on equity (ROE) for TTM is a strong 6.84%, reflecting good returns for shareholders. However, a decrease in stockholders' equity from $3.12 billion in 2023 to $2.97 billion in the TTM period is noteworthy.68
Positive
Cash Flow
The cash flow statement shows a strong operating cash flow to net income ratio of 1.68 for TTM, highlighting efficient cash generation relative to profits. Free cash flow remains robust at $342.23 million, though there is a decline in free cash flow compared to the previous period, which needs attention. The cash flow from financing activities indicates high outflows, suggesting significant debt repayments or dividends.72
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 771.99M | 627.52M | 719.01M | 654.07M | 661.48M | 439.38M |
| Gross Profit | 707.24M | 565.19M | 661.85M | 597.95M | 615.18M | 397.13M |
| EBITDA | 1.04B | 1.18B | 1.40B | 997.54M | 701.93M | 462.63M |
| Net Income | 213.76M | 264.64M | 371.43M | 325.78M | 339.30M | 170.95M |
Balance Sheet | ||||||
| Total Assets | 13.56B | 13.49B | 15.74B | 17.04B | 15.07B | 7.66B |
| Cash, Cash Equivalents and Short-Term Investments | 346.69M | 503.80M | 935.52M | 14.79M | 404.58M | 339.53M |
| Total Debt | 10.13B | 10.04B | 9.40B | 13.50B | 12.06B | 5.82B |
| Total Liabilities | 10.47B | 10.34B | 12.48B | 13.97B | 12.52B | 6.18B |
| Stockholders Equity | 2.97B | 3.02B | 3.12B | 2.94B | 2.42B | 1.34B |
Cash Flow | ||||||
| Free Cash Flow | 342.23M | 461.52M | 235.86M | 1.10B | 216.85M | 55.16M |
| Operating Cash Flow | 342.23M | 461.52M | 235.86M | 1.10B | 216.85M | 55.16M |
| Investing Cash Flow | -88.35M | 1.15B | 1.88B | -2.32B | -6.75B | -1.16B |
| Financing Cash Flow | -862.90M | -2.49B | -1.83B | 1.57B | 6.89B | 1.13B |
Arbor Realty Technical Analysis
Neutral
11.54
Price Trends
11.45
Positive
10.76
Positive
11.37
Positive
Market Momentum
0.11
Positive
49.87
Neutral
29.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ABR, the sentiment is Neutral. The current price of 11.54 is below the 20-day moving average (MA) of 11.76, above the 50-day MA of 11.45, and above the 200-day MA of 11.37, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 49.87 is Neutral, neither overbought nor oversold. The STOCH value of 29.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ABR.
Arbor Realty Risk Analysis
Arbor Realty disclosed 71 risk factors in its most recent earnings report. Arbor Realty reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Arbor Realty Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.24B | 13.21 | 7.09% | 12.51% | -17.43% | -37.71% | |
71 Outperform | 1.46B | 16.35 | 0.00% | 8.02% | -13.74% | -11.53% | |
63 Neutral | 3.35B | -274.93 | 0.00% | 9.63% | -19.20% | 92.16% | |
57 Neutral | 1.50B | -77.32 | -0.23% | 9.29% | -26.29% | -342.06% | |
55 Neutral | 1.07B | 16.91 | 8.30% | 13.06% | 1.71% | -56.69% | |
48 Neutral | 1.70B | -64.21 | 0.00% | 19.10% | 157.34% | 91.67% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% |
* Real Estate Sector Average
Performance Comparison
ABR
Arbor Realty
11.54
-1.50
-11.50%
ARI
Apollo Real Estate
10.52
1.74
19.82%
ARR
ARMOUR Residential REIT
14.87
-2.59
-14.83%
DX
Dynex Capital
12.34
1.33
12.08%
EFC
Ellington Financial
13.23
1.51
12.88%
LADR
Ladder Capital
11.40
0.27
2.43%
Arbor Realty Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Arbor Realty Closes $1.05 Billion Loan Securitization
Positive
Aug 12, 2025
On August 12, 2025, Arbor Realty Trust, Inc. announced the closing of a $1.05 billion commercial real estate mortgage loan securitization. The securitization involved issuing approximately $933 million of investment grade-rated notes and retaining subordinate interests of around $117 million. The proceeds are intended to repay borrowings, cover transaction expenses, and fund future loans and investments. This move is expected to strengthen Arbor’s financial position by allowing reinvestment in qualifying assets over a two-and-a-half-year period, potentially enhancing its market presence and operational flexibility.
Private Placements and FinancingBusiness Operations and Strategy
Arbor Realty Completes $500M Senior Notes Issuance
Positive
Jul 9, 2025
On July 9, 2025, Arbor Realty SR, Inc., a subsidiary of Arbor Realty Trust, Inc., completed the issuance and sale of $500 million of 7.875% Senior Notes due 2030. The proceeds are intended to refinance existing debt and for general corporate purposes, with the Notes being senior, unsecured obligations guaranteed by the Parent. This strategic financial move aims to strengthen Arbor Realty’s financial position by managing existing debt obligations and providing flexibility for future corporate activities.
Private Placements and FinancingBusiness Operations and Strategy
Arbor Realty Announces $500M Senior Notes Offering
Neutral
Jul 2, 2025
On July 2, 2025, Arbor Realty Trust, Inc. announced that its subsidiary, Arbor Realty SR, Inc., has priced a $500 million offering of 7.875% Senior Notes due 2030 in a private placement to qualified institutional buyers and non-U.S. persons. The proceeds from this offering are intended to refinance Arbor’s outstanding 7.50% Convertible Notes due 2025 and for general corporate purposes, potentially impacting the company’s financial strategy and market positioning.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.