Ares Commercial (ACRE) AI Stock Analysis

• Market Cap: $267.98M
• Dividend Yield: 13.75%
• Average Volume (3M): 540.51K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.89
• Revenue Growth: -30.60%
• EPS Growth: 87.95%
• Country: US
• Employees: 1,200
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): 0.15
• Shares Outstanding: 55,367,672
• 10 Day Avg. Volume: 446,646
• 30 Day Avg. Volume: 540,512
• PEG Ratio: 2.99
• Price to Book (P/B): 0.51
• Price to Sales (P/S): 3.07
• P/FCF Ratio: 13.30
• Enterprise Value/Market Cap: 4.81
• Enterprise Value/Revenue: 22.92
• Enterprise Value/Gross Profit: 32.01
• Enterprise Value/Ebitda: 32.05
• 1Y Price Target: $5.33
• Price Target Upside: 9.22% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 0.19
• Revenue Forecast (FY): $50.02M

• Rating: 51 Neutral
• Price Target: $5.00 ▲(2.46% Upside)
• Action: Reiterated Date: 03/17/26
• Date: Action: Reiterated 03/17/26

The score is held back primarily by pressured financial performance (recent losses, weaker earnings quality, and leverage/consistency concerns) and weak technical momentum. Offsetting factors include a very high dividend yield and constructive liquidity/funding updates from the earnings call and recent financing events, though concentrated problem-loan risk keeps the outlook balanced.

Positive Factors

Improved Liquidity & Funding

Meaningful and durable enhancement of funding capacity reduces refinancing and liquidity risk intrinsic to mortgage REITs. Larger committed facilities, available capital and a CLO redemption lower short-term funding cost, support resumed originations, and provide runway to manage troubled loans without forced asset sales.

Portfolio Repositioning & Reduced Office

Substantially lowering office exposure addresses a structural, illiquid segment and reduces concentration of sector-specific credit risk. Combined with restarted originations and new commitments, this repositioning increases portfolio diversification and the likelihood of steadier cash yields over the medium term.

Ares Platform Deal Access & Co-investment

Access to a large, active Ares platform is a durable competitive advantage: it expands proprietary deal flow, enables co-investments that share risk and capital, and gives ACRE scalable origination opportunities. This structural relationship improves long-term sourcing and underwriting optionality.

Negative Factors

Concentrated Problem Loans

High single-loan concentration creates persistent tail risk; outcomes on one or two large assets can materially alter earnings, capital and dividend capacity. The nonaccrual Chicago loan and the large Brooklyn exposure mean credit resolution timing and recovery amounts will drive near- to medium-term financial stability.

CECL Reserve Concentration

A concentrated CECL reserve tied to troubled assets limits tangible equity and constrains capital available for lending. Recovery uncertainty on these specific assets perpetuates earnings volatility and reduces the firm's ability to rebuild buffers until clear resolution outcomes crystallize.

Earnings Volatility & Scale Shortfall

Persistent negative or uneven distributable earnings and a loan book below historical scale make returns and dividend coverage less predictable. Reliance on timing of asset resolutions for earnings, plus a need to grow the portfolio materially to reach historical ROE, means durable earnings improvement is not yet assured.

Ares Commercial Business Overview & Revenue Model

Company Description

Ares Commercial Real Estate Corporation, a specialty finance company, originates and invests in commercial real estate (CRE) loans and related investments in the United States. The company provides a range of financing solutions for the owners, operators, and sponsors of CRE properties. It originates senior mortgage loans, subordinate debt products, mezzanine loans, real estate preferred equity investments, and other CRE investments, including commercial mortgage backed securities. The company has elected and qualified to be taxed as a real estate investment trust for the United States federal income tax purposes under the Internal Revenue Code of 1986. Ares Commercial Real Estate Management LLC operates as the manager of the company. The company was incorporated in 2011 and is based in New York, New York.

How the Company Makes Money

ACRE makes money primarily by earning interest income on its commercial real estate loan portfolio. It originates (and may acquire) CRE loans and receives contractual interest payments (typically including floating-rate interest based on a reference rate plus a spread, where applicable) and may also earn fee income associated with loan origination and structuring (e.g., origination, arrangement, or extension/modification fees when disclosed in its filings). To generate equity returns, the company generally finances a portion of its interest-earning assets with borrowed funds (such as secured credit facilities, repurchase agreements, or other forms of debt financing, as disclosed from time to time), and seeks to profit from the net interest margin (the spread between interest earned on assets and interest paid on liabilities). ACRE may also generate income from repayments, prepayments, and the resolution or sale of investments, which can create realized gains or losses depending on execution and credit outcomes. Its ability to earn depends materially on (1) loan origination volume and portfolio yield, (2) funding costs and access to leverage, (3) credit performance and loss experience in the underlying CRE collateral, and (4) interest-rate conditions (particularly for floating-rate assets and liabilities). ACRE is externally managed by an affiliate of Ares Management Corporation; any specific partnerships beyond that relationship are null.

Ares Commercial Financial Statement Overview

Summary

Overall fundamentals are mixed: revenue rebounded in 2024–2025, but profitability deteriorated versus 2020–2022 and remained slightly negative in 2025. Cash flow has stayed positive (supportive) but has trended down, while historically high leverage and declining equity/negative ROE add risk despite a cleaner-looking 2025 debt snapshot that appears inconsistent versus prior years.

Income Statement

Revenue has been volatile: strong growth in 2024–2025 (annual revenue up meaningfully), but profitability has deteriorated sharply versus the earlier profitable period (2020–2022). The company swung from solid profits in 2020–2022 to sizable losses in 2023–2024 and remained slightly negative in 2025, with net margins improving from very weak 2024 levels but still below break-even. Overall, the top-line rebound is a positive, but inconsistent earnings and negative net income in the most recent years weigh heavily on quality and stability.

Balance Sheet

Leverage historically has been high (debt-to-equity around ~2–3x in 2020–2024), which is common in mortgage REITs but still increases sensitivity to credit and funding conditions. Equity has trended down from 2022–2025, and returns on equity have turned negative in recent years, reflecting the earnings pressure. The 2025 snapshot shows no reported debt and a much lower leverage profile, but given the sharp change versus prior years, the balance sheet picture appears less consistent across periods.

Cash Flow

Operating cash flow and free cash flow have stayed positive each year, which helps offset weaker reported earnings in 2023–2025. However, cash generation has been trending down over the last several years (free cash flow declines in 2023–2025), and in 2024 the cash coverage of obligations was modest. Overall: resilient positive cash flow is a strength, but the downward trajectory is a caution.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	85.35M	87.80M	1.10M	109.05M	102.07M
Gross Profit	48.95M	87.80M	1.10M	109.05M	83.51M
EBITDA	70.19M	0.00	0.00	0.00	61.18M
Net Income	-902.00K	-34.99M	-38.87M	29.79M	60.46M
Balance Sheet
Total Assets	1.62B	1.75B	2.28B	2.52B	2.63B
Cash, Cash Equivalents and Short-Term Investments	29.29M	63.80M	138.52M	169.21M	50.62M
Total Debt	1.05B	1.17B	1.62B	1.74B	1.90B
Total Liabilities	1.11B	1.21B	1.65B	1.78B	1.95B
Stockholders Equity	509.57M	540.13M	625.85M	747.54M	678.63M
Cash Flow
Free Cash Flow	19.72M	35.55M	46.79M	57.16M	48.21M
Operating Cash Flow	21.35M	35.55M	46.79M	57.16M	48.35M
Investing Cash Flow	148.14M	427.91M	127.46M	193.17M	-699.68M
Financing Cash Flow	-168.63M	-507.63M	-205.07M	-159.67M	627.17M

Ares Commercial Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACRE, the sentiment is Negative. The current price of 4.88 is below the 20-day moving average (MA) of 5.06, below the 50-day MA of 5.06, and above the 200-day MA of 4.76, indicating a neutral trend. The MACD of -0.06 indicates Positive momentum. The RSI at 40.44 is Neutral, neither overbought nor oversold. The STOCH value of 4.64 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACRE.

Ares Commercial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NREF	74 Outperform	$237.65M	3.21	19.02%	14.36%	15.51%	210.91%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
AOMR	65 Neutral	$207.04M	4.63	17.10%	14.83%	65.86%	-74.61%
REFI	60 Neutral	$259.71M	7.15	0.05%	15.86%	-1.57%	-15.32%
ACR	58 Neutral	$136.49M	16.18	4.99%	―	-18.37%	18.80%
MITT	57 Neutral	$241.82M	4.98	8.85%	9.61%	20.44%	-59.21%
ACRE	51 Neutral	$267.98M	-16.99	-0.17%	13.75%	-30.60%	87.95%

Ares Commercial Corporate Events

Ares Commercial Extends Secured Revolving Credit Facility

On March 10, 2026, ACRC Lender LLC, a subsidiary of Ares Commercial Real Estate Corporation, amended its secured revolving funding facility with City National Bank. The amendment extends the facility’s maturity date to December 31, 2026 in exchange for payment of a renewal fee, supporting continued access to revolving credit and reinforcing the company’s funding stability for its real estate lending operations.

The extension of the secured revolving funding facility allows Ares Commercial Real Estate Corporation to preserve a key source of liquidity through the end of 2026. This move may strengthen the company’s financial flexibility, underpinning its ability to maintain or expand its commercial real estate lending activities and potentially enhancing confidence among financing partners and other stakeholders.

The most recent analyst rating on (ACRE) stock is a Buy with a $5.50 price target. To see the full list of analyst forecasts on Ares Commercial stock, see the ACRE Stock Forecast page.

Ares Commercial Highlights 2025 Results and Dividend Declaration

For the fourth quarter of 2025, Ares Commercial Real Estate Corporation reported a GAAP net loss of $3.9 million, or $0.07 per diluted share, but generated distributable earnings of $8.5 million, or $0.15 per diluted share. For full year 2025, the company posted a modest GAAP net loss of $0.9 million, or $0.02 per diluted share, and a distributable loss of $6.7 million, or $0.12 per diluted share, reflecting a year of portfolio repositioning and risk reduction.

Management highlighted that progress in resolving higher-risk loans, reducing office and REO exposures, and collecting $572 million in loan repayments during 2025 strengthened balance sheet flexibility and enabled a return to new investing in the second half of the year. Subsequent to year-end, the company closed $150 million of new loan commitments, declared a $0.15 per-share dividend for the first quarter of 2026 matching the fourth-quarter 2025 payout, and scheduled its 2026 annual shareholders meeting for May 27, 2026, underscoring a continued focus on stabilizing earnings and supporting shareholder returns.

The most recent analyst rating on (ACRE) stock is a Hold with a $5.00 price target. To see the full list of analyst forecasts on Ares Commercial stock, see the ACRE Stock Forecast page.

Ares Commercial Expands Wells Fargo Repurchase Lending Facility

On December 18, 2025, Ares Commercial Real Estate Corporation and several of its subsidiaries amended their existing master repurchase and securities contract with Wells Fargo Bank, National Association. The amendment increased the lending facility’s commitment amount from $450 million to $600 million in exchange for an upsize fee, expanding the company’s available financing capacity and potentially enhancing its ability to originate or hold a larger volume of commercial real estate loans.

The most recent analyst rating on (ACRE) stock is a Buy with a $5.50 price target. To see the full list of analyst forecasts on Ares Commercial stock, see the ACRE Stock Forecast page.