Ares Commercial (ACRE) AI Stock Analysis

• Market Cap: $286.69M
• Dividend Yield: 13.75%
• Average Volume (3M): 513.97K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.84
• Revenue Growth: -30.60%
• EPS Growth: 87.95%
• Country: US
• Employees: 1,200
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): 0.10
• Shares Outstanding: 55,026,450
• 10 Day Avg. Volume: 468,854
• 30 Day Avg. Volume: 513,968
• PEG Ratio: 0.82
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 3.65
• P/FCF Ratio: 9.02
• Enterprise Value/Market Cap: 0.70
• Enterprise Value/Revenue: 7.64
• Enterprise Value/Gross Profit: 10.42
• Enterprise Value/Ebitda: 27.64
• 1Y Price Target: $4.83
• Price Target Upside: -7.47% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 53 Neutral
• Price Target: $5.00 ▼(-4.21% Downside)

The score is primarily held back by weak and volatile profitability despite strong revenue growth and positive cash flow. Technicals are mixed with soft momentum, while a very high dividend yield and a generally constructive earnings update (deleveraging, liquidity, new commitments) provide partial support.

Positive Factors

Risk Reduction

Reducing high-risk loans enhances the company's risk profile, potentially leading to more stable returns and improved financial health over the long term.

Improved Liquidity

Improved liquidity and reduced leverage provide the company with greater financial flexibility to navigate market challenges and invest in growth opportunities.

High Cash Reserves

A strong cash position allows the company to capitalize on investment opportunities and manage liabilities, supporting long-term operational stability.

Negative Factors

GAAP Net Loss

Ongoing net losses indicate underlying profitability challenges, which could hinder the company's ability to sustain operations and fund future growth.

Dividend Cut

A reduced dividend may signal financial strain and could deter income-focused investors, impacting the company's attractiveness and stock performance.

Increase in Risk-Rated Loans

An increase in high-risk loans suggests potential future credit issues, which could lead to further financial instability and impact the company's earnings.

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

Ares Commercial Real Estate Corporation generates revenue primarily through interest income from its portfolio of commercial real estate loans. The company invests in and originates senior mortgage loans, which are secured by commercial properties and provide a steady stream of interest payments. Additionally, ACRE may generate income through fees associated with loan origination and management. The company focuses on maintaining a diversified portfolio across different property types and geographical locations to mitigate risk and enhance returns. ACRE's alignment with Ares Management Corporation provides access to a broad network of industry relationships and expertise, which supports deal sourcing and investment opportunities.

Ares Commercial Financial Statement Overview

Summary

Mixed fundamentals: strong revenue growth and positive operating/free cash flow, plus recent deleveraging in the latest period, but profitability is the core weakness with net losses and volatile results (negative net margins in 2024 and TTM).

Income Statement

Revenue growth has been strong (TTM (Trailing-Twelve-Months) up ~25.7%; 2024 up ~82.6%), but profitability is the key issue: net income is negative in TTM (Trailing-Twelve-Months) and 2024, with negative net margins (about -31.8% and -38.0%). Results are also volatile—2021–2022 were profitable, followed by losses in 2023–TTM—suggesting earnings stability remains weak despite the rebound in revenue.

Balance Sheet

Leverage improved materially in the most recent period (TTM (Trailing-Twelve-Months) shows no debt and a 0.0 debt-to-equity ratio), which is a clear balance-sheet positive. That said, recent annual periods (2022–2024) show elevated leverage (debt-to-equity ~2.17–2.58) and returns on equity have turned negative in 2023–TTM (reflecting ongoing losses). Overall, the latest deleveraging helps, but the longer-run leverage profile and negative returns remain important risks.

Cash Flow

Cash generation is a relative strength: operating cash flow is positive across periods and remains solid in TTM (Trailing-Twelve-Months) (~$23.8M) with positive free cash flow of a similar amount. However, free cash flow is trending down (TTM (Trailing-Twelve-Months) down ~16.2%), and with net losses persisting, the quality and sustainability of cash flows should be monitored even though current cash flow is holding up.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	26.42M	87.80M	1.10M	109.05M	102.07M	78.69M
Gross Profit	19.36M	87.80M	1.10M	109.05M	83.51M	78.69M
EBITDA	7.30M	0.00	0.00	0.00	61.18M	0.00
Net Income	-7.70M	-34.99M	-38.87M	29.79M	60.46M	21.84M
Balance Sheet
Total Assets	1.39B	1.75B	2.28B	2.52B	2.63B	1.93B
Cash, Cash Equivalents and Short-Term Investments	84.87M	63.80M	138.52M	169.21M	50.62M	74.78M
Total Debt	0.00	1.17B	1.62B	1.74B	1.90B	1.43B
Total Liabilities	870.88M	1.21B	1.65B	1.78B	1.95B	1.46B
Stockholders Equity	520.98M	540.13M	625.85M	747.54M	678.63M	473.01M
Cash Flow
Free Cash Flow	23.80M	35.55M	46.79M	57.16M	48.21M	31.49M
Operating Cash Flow	23.80M	35.55M	46.79M	57.16M	48.35M	31.76M
Investing Cash Flow	610.86M	427.91M	127.46M	193.17M	-699.68M	-81.87M
Financing Cash Flow	-583.13M	-507.63M	-205.07M	-159.67M	627.17M	119.25M

Ares Commercial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACRE, the sentiment is Positive. The current price of 5.22 is above the 20-day moving average (MA) of 4.92, above the 50-day MA of 5.05, and above the 200-day MA of 4.59, indicating a bullish trend. The MACD of 0.01 indicates Negative momentum. The RSI at 61.19 is Neutral, neither overbought nor oversold. The STOCH value of 81.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	$261.75M	5.17	27.37%	14.36%	15.51%	210.91%
REFI	74 Outperform	$261.40M	7.33	11.82%	15.86%	-1.57%	-15.32%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
MITT	55 Neutral	$273.00M	9.24	9.03%	9.61%	20.44%	-59.21%
ACRE	53 Neutral	$286.69M	-35.85	-1.42%	13.75%	-30.60%	87.95%
AOMR	51 Neutral	$223.48M	12.55	6.67%	14.83%	65.86%	-74.61%
ACR	47 Neutral	$139.52M	20.33	6.58%	―	-18.37%	18.80%

Ares Commercial Corporate Events

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.

Ares Commercial Reports Q3 2025 Financial Results

On November 7, 2025, Ares Commercial Real Estate Corporation reported its financial results for the third quarter of 2025, achieving a GAAP net income of $4.7 million and distributable earnings of $5.5 million. The company closed $271 million in new loan commitments and declared a fourth-quarter dividend of $0.15 per share. The firm has collected nearly $500 million in repayments year-to-date, enhancing its liquidity position with $173 million of available capital as of September 30, 2025. These financial activities are part of Ares’ strategy to strengthen its financial flexibility and reposition its portfolio, aiming to accelerate investment activities and resolve non-earning assets.

The most recent analyst rating on (ACRE) stock is a Hold with a $4.50 price target. To see the full list of analyst forecasts on Ares Commercial stock, see the ACRE Stock Forecast page.