Ares Commercial Real Estate (ACRE)
NYSE:ACRE
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Ares Commercial
(NYSE:ACRE)
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Rating:52Neutral
Price Target:
$4.50
▼(-15.09% Downside)
Action:Reiterated
Date:05/09/26
ACRE’s score is held back primarily by weak financial performance (losses, declining equity with leverage, and a shift to negative operating/free cash flow). Technicals are mixed but slightly constructive versus longer-term averages, and valuation is supported by a high dividend yield, though earnings losses and earnings-call credit/CECL concentration risks and dividend coverage concerns keep the overall score in the low-to-mid range.
Positive Factors
Platform origination scale & Ares affiliation
Ares affiliation and repeat co-investment flow create durable origination advantages: access to deal pipelines, shared underwriting resources, and scale for structuring loans. This supports steady deployment and fee opportunities, reducing acquisition cost and improving long-term competitive positioning.
Negative Factors
High leverage and declining equity
Elevated debt relative to shrinking equity leaves the balance sheet sensitive to credit losses or valuation hits. Sustained leverage limits flexibility for opportunistic acts, increases financing vulnerability during stress, and amplifies downside to book value if problem loans persist.
Read all positive and negative factors
Positive Factors
Negative Factors
Platform origination scale & Ares affiliation
Ares affiliation and repeat co-investment flow create durable origination advantages: access to deal pipelines, shared underwriting resources, and scale for structuring loans. This supports steady deployment and fee opportunities, reducing acquisition cost and improving long-term competitive positioning.
Read all positive factors
Ares Commercial (ACRE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$266.86M
Dividend Yield13.75%
Average Volume (3M)405.88K
Price to Earnings (P/E)―
Beta (1Y)0.86
Revenue Growth-35.42%
EPS Growth-46.68%
CountryUS
Employees1,200
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)-0.36
Shares Outstanding55,481,113
10 Day Avg. Volume384,282
30 Day Avg. Volume405,875
Financial Highlights & Ratios
PEG Ratio2.99
Price to Book (P/B)0.51
Price to Sales (P/S)3.07
P/FCF Ratio13.30
Enterprise Value/Market Cap5.47
Enterprise Value/Revenue18.31
Enterprise Value/Gross Profit26.15
Enterprise Value/Ebitda80.74
Forecast
1Y Price Target
$5.50Price Target Upside3.77% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.25
Revenue Forecast (FY)$46.91M
Ares Commercial Business Overview & Revenue Model
Company Description
Ares Commercial Real Estate Corporation (ACRE) functions as a specialized financial institution, primarily engaged in developing and investing in a diverse portfolio of commercial real estate (CRE) debt and associated investments throughout the Un...
How the Company Makes Money
ACRE primarily makes money from net interest income generated on its commercial real estate debt portfolio. It originates or acquires loans (commonly senior secured floating-rate mortgages) and earns interest at a contractual rate, while funding t...
Ares Commercial Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 24, 2026
Earnings Call Sentiment Positive
The call communicated tangible progress on strategic objectives — portfolio growth (22% YoY), ongoing originations, improved diversification, stronger liquidity and expanded borrowing capacity — and highlighted stability across the core, risk-rated 1–3 portfolio (31 of 35 loans, no negative migrations). However, the company continues to carry concentrated problem assets (four loans driving most risk exposure), a rising CECL reserve ($138M) heavily weighted to a single risk-rated five loan, and reported a GAAP net loss for the quarter. Management emphasized active resolution efforts, platform-scale advantages, and opportunistic originations, while acknowledging timing uncertainty on asset sales and the need to rebuild earnings to support the dividend. Overall the positives around growth, liquidity and disciplined deployment outweigh the remaining concentrated credit challenges, but material risks persist until the key non‑accrual loans are resolved.Positive Updates
Portfolio Growth and Recent Originations
Loans held for investment grew to $1.7 billion (35 loans), up $110 million quarter-over-quarter. 37% of the investment loan portfolio balance was originated in the past 12 months. The company closed three new loan commitments totaling $294 million in Q1 and has committed approximately $780 million in new loans over the last 12 months.
Negative Updates
GAAP Net Loss and Modest Distributable Earnings
GAAP net loss for Q1 2026 was approximately $9.6 million, or $0.17 per diluted share. Distributable earnings were approximately $3.2 million, or $0.06 per diluted share (or $6.5 million / $0.12 per diluted share excluding a $3.3M realized loss).
Read all updates
Q1-2026 Updates
Positive
Negative
Portfolio Growth and Recent Originations
Loans held for investment grew to $1.7 billion (35 loans), up $110 million quarter-over-quarter. 37% of the investment loan portfolio balance was originated in the past 12 months. The company closed three new loan commitments totaling $294 million in Q1 and has committed approximately $780 million in new loans over the last 12 months.
Read all positive updates
Company Guidance
Management's guidance emphasized continued risk reduction in the portfolio while opportunistically originating loans and preserving liquidity: Q1 portfolio grew to $1.7 billion across 35 loans (37% originated in the last 12 months) with outstanding principal up 22% YoY and office exposure reduced nearly 25%; closed three Q1 loan commitments totaling $294 million ($225M held for investment, $69M held for sale as part of a $144M senior retail loan with $75M retained); collected $94M in repayments and ended 3/31/2026 with $163M available capital (including $86M cash) and an increased borrowing capacity of $300M after upsizing Morgan Stanley to $350M (+$200M, 3‑year extension) and Citibank to $425M (+$100M) and redeeming the FL4 CLO; leverage was moderate (net debt-to-equity excl. CECL 1.9x); CECL reserve rose to $138M (~8% of loans outstanding), with $129M (94%) allocated to risk-rated 4 and 5 loans (about half of the CECL reserve tied to the single risk‑rated 5 and representing ~35% of the 4/5 outstanding balance); Q1 GAAP net loss was ~$9.6M ($0.17/share) while distributable earnings were ~$3.2M ($0.06/sh) or ~$6.5M ($0.12/sh) excluding a $3.3M realized loss, book value was $8.89/share, and the Board declared a $0.15/share Q2 dividend (annualized yield ~11.5% at the 5/4/26 price).Ares Commercial Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
48
Neutral
Cash Flow
29
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 79.69M | 85.35M | 87.80M | 1.10M | 109.05M | 102.07M |
| Gross Profit | 55.81M | 48.95M | 87.80M | 1.10M | 109.05M | 83.51M |
| EBITDA | 18.08M | 70.19M | 0.00 | 0.00 | 0.00 | 61.18M |
| Net Income | -19.85M | -902.00K | -34.99M | -38.87M | 29.79M | 60.46M |
Balance Sheet | ||||||
| Total Assets | 1.84B | 1.62B | 1.75B | 2.28B | 2.52B | 2.63B |
| Cash, Cash Equivalents and Short-Term Investments | 86.16M | 29.29M | 63.80M | 138.52M | 169.21M | 50.62M |
| Total Debt | 1.27B | 1.05B | 1.17B | 1.62B | 1.74B | 1.90B |
| Total Liabilities | 1.34B | 1.11B | 1.21B | 1.65B | 1.78B | 1.95B |
| Stockholders Equity | 492.42M | 509.57M | 540.13M | 625.85M | 747.54M | 678.63M |
Cash Flow | ||||||
| Free Cash Flow | -43.94M | 19.72M | 35.55M | 46.79M | 57.16M | 48.21M |
| Operating Cash Flow | -43.26M | 21.35M | 35.55M | 46.79M | 57.16M | 48.35M |
| Investing Cash Flow | -240.37M | 148.14M | 427.91M | 127.46M | 193.17M | -699.68M |
| Financing Cash Flow | 288.88M | -168.63M | -507.63M | -205.07M | -159.67M | 627.17M |
Ares Commercial Technical Analysis
Negative
5.30
Price Trends
5.00
Negative
4.95
Negative
4.73
Positive
Market Momentum
-0.02
Negative
44.49
Neutral
55.38
Neutral
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 5.3 is above the 20-day moving average (MA) of 4.85, above the 50-day MA of 5.00, and above the 200-day MA of 4.73, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 44.49 is Neutral, neither overbought nor oversold. The STOCH value of 55.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACRE.
Ares Commercial Risk Analysis
Ares Commercial disclosed 103 risk factors in its most recent earnings report. Ares Commercial 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
Ares Commercial Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $294.97M | 2.81 | 16.68% | 14.36% | -1.80% | 39.83% | |
67 Neutral | $238.37M | 7.69 | 0.04% | 15.86% | 1.82% | -24.02% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
60 Neutral | $131.64M | 4.67 | 6.11% | ― | -11.12% | 106.91% | |
55 Neutral | $240.75M | 7.14 | 6.11% | 9.61% | 15.52% | -54.74% | |
52 Neutral | $266.86M | -13.40 | -3.88% | 13.75% | -35.42% | -46.68% | |
50 Neutral | $203.05M | 12.52 | 6.23% | 14.83% | 31.73% | -55.72% |
* Real Estate Sector Average
ACRE
Ares Commercial
4.81
0.50
11.73%
ACR
ACRES Commercial Realty
18.46
0.58
3.24%
MITT
AG Mortgage
7.57
0.99
15.01%
NREF
NexPoint Real Estate ate Finance
15.65
2.23
16.64%
AOMR
Angel Oak Mortgage
8.15
0.26
3.35%
REFI
Chicago Atlantic Real Estate ate Finance Inc
11.24
-1.07
-8.71%
Ares Commercial Corporate Events
Business Operations and StrategyDividendsFinancial DisclosuresPrivate Placements and Financing
Ares Commercial Reports Q1 Loss, Maintains Dividend Payouts
Negative
May 7, 2026
On May 7, 2026, Ares Commercial Real Estate Corporation reported first-quarter 2026 results showing a GAAP net loss of $9.6 million, or $0.17 per diluted share, alongside distributable earnings of $3.2 million, or $0.06 per diluted share, as it co...
Business Operations and StrategyPrivate Placements and Financing
Ares Commercial Expands and Extends Key Financing Facility
Positive
Mar 30, 2026
On March 24, 2026, ACRC Lender MS LLC and ACRC Lender MS II LLC, subsidiaries of Ares Commercial Real Estate Corporation, entered into an amendment to their Master Repurchase Agreement and Securities Contract with Morgan Stanley Bank, N.A. The ame...
Business Operations and StrategyPrivate Placements and Financing
Ares Commercial Extends Secured Revolving Credit Facility
Positive
Mar 16, 2026
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 e...
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.