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Apollo Commercial Real Estate (ARI)
:ARI
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Apollo Real Estate
(NYSE:ARI)
Rating:66Neutral
Price Target:―
Positive Factors
Asset Management
ARI has shown strong asset management capabilities by resolving hospital loan challenges quicker than expected and experiencing a sales uplift at Steinway Tower.
International Growth
The company benefits from Apollo's global CRE lending prowess and has a significant presence outside the US, which positions it well for international growth.
Negative Factors
Book Value Comparison
ARI shares were trading at 0.78x P/BV, just below the 24-company commercial MREIT peer group median P/BV of 0.80x.
Loan Portfolio Decline
The total committed loan portfolio sat at $7.1B, a decrease of 8.8% from September 30.
Apollo Real Estate (ARI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.40B
Dividend Yield9.87%
Average Volume (3M)1.00M
Price to Earnings (P/E)―
Beta (1Y)0.82
Revenue Growth-26.29%
EPS Growth-342.06%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength48
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.26
Shares Outstanding138,943,830
10 Day Avg. Volume1,003,974
30 Day Avg. Volume1,003,688
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap6.40
Enterprise Value/Revenue54.91
Enterprise Value/Gross Profit254.64
Enterprise Value/Ebitda-39.49
Forecast
1Y Price Target
$10.42Price Target Upside3.07% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Apollo Real Estate Business Overview & Revenue Model
Company DescriptionApollo Real Estate (ARI) is a diversified real estate company specializing in the acquisition, ownership, and management of commercial and residential properties. With a focus on high-quality assets across prime locations, ARI offers a range of services including property management, leasing, and real estate investment advisory. The company operates across various sectors such as office spaces, retail properties, and multifamily residential complexes, aiming to deliver exceptional value and returns to its stakeholders.
How the Company Makes MoneyApollo Real Estate makes money primarily through rental income generated from its diverse portfolio of commercial and residential properties. The company also earns revenue from property management fees, leasing commissions, and advisory services provided to clients and investors. Additionally, ARI capitalizes on property appreciation by strategically acquiring and disposing of assets to achieve capital gains. Significant partnerships with financial institutions and real estate developers enhance its acquisition capabilities and expand its investment opportunities, further contributing to its earnings.
Apollo Real Estate Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q2-2025)
| % Change Since: 3.16%|
Next Earnings Date:Nov 03, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive outlook for ARI, with strong loan originations, portfolio growth, and successful refinancing efforts. However, challenges related to non-earning assets and leverage considerations were noted.Q2-2025 Updates
Positive Updates
Strong Loan Originations
ARI committed to $1.4 billion of new loans during the quarter, with year-to-date commitments reaching $2 billion.
Portfolio Growth
The carrying value of ARI's portfolio increased by 12% from the prior quarter, totaling $8.6 billion.
Successful Refinancing
Completed a new 5-year floating rate $750 million Term Loan B, extending corporate debt maturity to June 2029.
Residential Property Focus
Loans on residential properties now comprise approximately 25% of ARI's portfolio, benefiting from secular tailwinds.
Strong Distributable Earnings
Reported distributable earnings of $36 million, representing an 8% increase over the first quarter.
Settlement Agreement Proceeds
ARI's share of settlement proceeds from the Commonwealth of Massachusetts is approximately $18 million, with expected book value per share pickup.
Negative Updates
Non-Earning Assets
Assets like the Brook are not currently cash flow positive, impacting overall portfolio returns.
Leverage Considerations
Current leverage levels are around 4x, raising questions about long-term sustainability and growth funding.
Company Guidance
During the second quarter of 2025, Apollo Commercial Real Estate Finance (ARI) demonstrated strong performance through significant loan originations and strategic portfolio management. The company committed to $1.4 billion in new loans for the quarter, contributing to a total of $2 billion year-to-date, while maintaining a diversified portfolio with about 25% of loans in residential properties. ARI's portfolio reached a carrying value of $8.6 billion, up 12% from the previous quarter, comprising 53 loans. Loan repayments and sales amounted to $631 million, with a 7.8% weighted average unlevered yield. The company's efforts in balance sheet optimization were highlighted by refinancing its Term Loan B facilities with a new $750 million loan, pushing the next corporate debt maturity to June 2029. ARI reported distributable earnings of $36 million or $0.26 per share, marking an 8% increase over the previous quarter, with a GAAP net income of $18 million or $0.12 per diluted share.Apollo Real Estate Financial Statement Overview
Summary
Apollo Real Estate demonstrates stable revenue growth and improving profitability, supported by strong operational efficiency. However, the balance sheet shows high leverage, typical for the mortgage REIT industry, and while cash generation capabilities are robust, the overall financial position is moderated by challenges in profitability and high debt levels.Income Statement
Apollo Real Estate's income statement shows a stable revenue base with recent growth, as evidenced by a TTM revenue of $304.9 million, slightly up from $303.7 million in 2024. However, profitability metrics are mixed. The TTM gross profit margin is strong at approximately 79%, but net profit margins have fluctuated, with a TTM net income of $10.9 million compared to a loss in 2024, indicating improving profitability. The EBIT margin in TTM is robust at around 70.4%, showcasing operational efficiency. Despite recent challenges, the company is showing positive trends in profitability.75
Positive
Balance Sheet
The balance sheet presents a moderate financial position. The debt-to-equity ratio is high, with total debt at $6.8 billion and stockholders' equity at $1.86 billion for TTM, indicating significant leverage typical for the REIT industry. The equity ratio is about 21.2%, suggesting moderate equity financing. The return on equity (ROE) is low but positive at approximately 0.58% in TTM, reflecting modest returns generated on shareholders' equity. Overall, the balance sheet suggests a high reliance on debt, consistent with industry norms.60
Neutral
Cash Flow
Apollo Real Estate's cash flow statement indicates a strong operating cash flow of $186.7 million in TTM, demonstrating solid cash generation capabilities. The free cash flow for the TTM period stands at $55.1 million, showing an improvement from previous periods. The operating cash flow to net income ratio is high, reflecting efficient cash generation relative to net income. The free cash flow to net income ratio is also favorable, indicating effective cash management despite fluctuations in net income.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 163.64M | 303.67M | 285.16M | 65.12M | 278.31M | 210.58M |
| Gross Profit | 35.29M | 195.66M | 166.18M | -26.37M | 217.59M | 170.83M |
| EBITDA | -227.56M | -634.86M | 0.00 | -704.00K | 0.00 | 0.00 |
| Net Income | -4.17M | -119.64M | 58.13M | -5.29M | 223.51M | 18.38M |
Balance Sheet | ||||||
| Total Assets | 9.82B | 8.41B | 9.30B | 9.57B | 8.42B | 6.94B |
| Cash, Cash Equivalents and Short-Term Investments | 177.62M | 317.40M | 225.44M | 222.03M | 343.11M | 325.50M |
| Total Debt | 0.00 | 6.39B | 6.95B | 2.30B | 2.01B | 1.23B |
| Total Liabilities | 7.97B | 6.54B | 7.09B | 7.21B | 6.12B | 4.67B |
| Stockholders Equity | 1.85B | 1.87B | 2.21B | 2.35B | 2.29B | 2.27B |
Cash Flow | ||||||
| Free Cash Flow | 83.68M | 30.75M | 201.23M | 234.67M | 199.25M | 164.05M |
| Operating Cash Flow | 199.71M | 200.26M | 273.86M | 267.70M | 199.38M | 164.05M |
| Investing Cash Flow | -462.70M | 577.17M | 68.42M | -1.34B | -1.36B | -215.72M |
| Financing Cash Flow | 262.19M | -689.31M | -343.36M | 957.97M | 1.18B | -75.12M |
Apollo Real Estate Technical Analysis
Positive
10.11
Price Trends
9.78
Positive
9.41
Positive
9.06
Positive
Market Momentum
0.08
Negative
60.85
Neutral
92.45
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARI, the sentiment is Positive. The current price of 10.11 is above the 20-day moving average (MA) of 9.86, above the 50-day MA of 9.78, and above the 200-day MA of 9.06, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 60.85 is Neutral, neither overbought nor oversold. The STOCH value of 92.45 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARI.
Apollo Real Estate Risk Analysis
Apollo Real Estate disclosed 67 risk factors in its most recent earnings report. Apollo Real Estate 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
Apollo Real Estate Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $1.33B | 11.01 | 8.81% | 11.33% | 20.32% | 1.58% | |
66 Neutral | $1.40B | ― | -0.35% | 9.87% | -26.29% | -342.06% | |
65 Neutral | £935.40M | 14.21 | 6.19% | 6.63% | 15.71% | 68.63% | |
60 Neutral | $1.61B | 15.84 | 4.93% | 14.57% | 35.01% | 1115.85% | |
56 Neutral | $1.05B | 16.63 | 5.50% | 13.14% | 1.71% | -56.69% | |
53 Neutral | $1.04B | 5.06 | -14.78% | 16.99% | -21.95% | -528.94% | |
48 Neutral | $1.70B | 8.01 | -2.04% | 18.82% | 157.34% | 91.67% |
* Real Estate Sector Average
Performance Comparison
ARI
Apollo Real Estate
10.11
0.98
10.73%
ARR
ARMOUR Residential REIT
15.29
-1.87
-10.90%
DX
Dynex Capital
12.57
2.00
18.92%
EFC
Ellington Financial
13.77
2.32
20.26%
TWO
Two Harbors
10.10
-1.60
-13.68%
PMT
PennyMac Mortgage
12.18
0.09
0.74%
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.