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Apollo Commercial Real Estate (ARI)
NYSE: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 Expansion
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
Leverage
Leverage (debt-to-equity) was 3.2x, a decrease from 3.5x at September 30.
Loan Portfolio
The total committed loan portfolio sat at $7.1B as of December 31, a decrease of 8.8% from September 30.
Apollo Real Estate (ARI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.33B
Dividend Yield11.46%
Average Volume (3M)1.32M
Price to Earnings (P/E)―
Beta (1Y)0.97
Revenue Growth-14.98%
EPS Growth95.53%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength62
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.24
Shares Outstanding138,943,830
10 Day Avg. Volume1,077,933
30 Day Avg. Volume1,317,153
Financial Highlights & Ratios
PEG Ratio1.26
Price to Book (P/B)0.70
Price to Sales (P/S)0.00
P/FCF Ratio43.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.00Price Target Upside3.84% Upside
Rating ConsensusHold
Number of Analyst Covering6
Apollo Real Estate Business Overview & Revenue Model
Company DescriptionApollo Commercial Real Estate Finance, Inc. operates as a real estate investment trust (REIT) that originates, acquires, invests in, and manages commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments in the United States. It is qualified as a REIT under the Internal Revenue Code. As a REIT, it would not be subject to federal income taxes, if the company distributes at least 90% of its REIT taxable income to its stockholders. Apollo Commercial Real Estate Finance, Inc. was founded in 2009 and is based in New York, New York.
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 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 | ||||
| 304.92M | 303.67M | 285.16M | 65.12M | 278.31M | 210.58M | Gross Profit |
| 240.67M | 195.66M | 166.18M | -26.37M | 217.59M | 170.83M | EBIT |
| 214.75M | 274.02M | 0.00 | 472.52M | 223.51M | 18.38M | EBITDA |
| 45.22M | -634.86M | 0.00 | -704.00K | 0.00 | 0.00 | Net Income Common Stockholders |
| 10.88M | -119.64M | 58.13M | -5.29M | 223.51M | 18.38M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 225.44M | 317.40M | 225.44M | 222.03M | 343.11M | 325.50M | Total Assets |
| 9.30B | 8.41B | 9.30B | 9.57B | 8.42B | 6.94B | Total Debt |
| 6.95B | 6.39B | 6.95B | 2.30B | 2.01B | 1.23B | Net Debt |
| 6.73B | 6.07B | 6.73B | 2.08B | 1.67B | 909.39M | Total Liabilities |
| 7.09B | 6.54B | 7.09B | 7.21B | 6.12B | 4.67B | Stockholders Equity |
| 2.21B | 1.87B | 2.21B | 2.35B | 2.29B | 2.27B |
| Cash Flow | Free Cash Flow | ||||
| 30.26M | 30.75M | 201.23M | 234.67M | 199.25M | 164.05M | Operating Cash Flow |
| 186.73M | 200.26M | 273.86M | 267.70M | 199.38M | 164.05M | Investing Cash Flow |
| 286.14M | 577.17M | 68.42M | -1.34B | -1.36B | -215.72M | Financing Cash Flow |
| -471.28M | -689.31M | -343.36M | 957.97M | 1.18B | -75.12M |
Apollo Real Estate Technical Analysis
Positive
9.63
Price Trends
9.26
Positive
9.20
Positive
8.99
Positive
Market Momentum
0.16
Positive
54.42
Neutral
27.19
Neutral
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 9.63 is above the 20-day moving average (MA) of 9.61, above the 50-day MA of 9.26, and above the 200-day MA of 8.99, indicating a bullish trend. The MACD of 0.16 indicates Positive momentum. The RSI at 54.42 is Neutral, neither overbought nor oversold. The STOCH value of 27.19 is Neutral, 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $1.33B | ― | 0.41% | 11.46% | -14.98% | 95.53% | |
65 Neutral | $1.23B | 9.45 | 9.59% | 12.38% | 11.91% | 52.26% | |
60 Neutral | $2.75B | 10.29 | 0.33% | 8508.22% | 5.95% | -17.48% | |
60 Neutral | $1.34B | 16.14 | 6.01% | 14.01% | 73.74% | -34.10% | |
53 Neutral | $1.24B | 5.06 | 0.63% | 15.89% | -18.22% | -114.40% | |
50 Neutral | $1.12B | 13.86 | 6.36% | 12.90% | -4.42% | -43.99% | |
48 Neutral | $1.30B | 8.01 | -0.11% | 18.06% | 142.18% | 50.74% |
* Real Estate Sector Average
Performance Comparison
ARI
Apollo Real Estate
9.63
0.59
6.53%
ARR
ARMOUR Residential REIT
15.98
-0.28
-1.72%
DX
Dynex Capital
11.85
1.24
11.69%
EFC
Ellington Financial
12.66
2.04
19.21%
TWO
Two Harbors
10.85
-0.06
-0.55%
PMT
PennyMac Mortgage
12.22
0.18
1.50%
Apollo Real Estate Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 5.94%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The call highlighted strong loan origination and portfolio growth, along with successful asset sales and expanded credit facilities. However, earnings were slightly below the dividend rate, and capital markets volatility remains a concern. The presence of significant specific allowances on non-accruing assets also poses challenges.Q1-2025 Updates
Positive Updates
Strong Loan Origination
ARI committed to $650 million of new loans in Q1, with a year-to-date volume of $1.5 billion, including add-on funding.
Increased Portfolio Value
The loan portfolio ended the quarter with a carrying value of $7.7 billion, up from $7.1 billion at year-end.
Positive Activity in Sales
The closing of three units at 111 West 57th Street generated $45 million in net proceeds, with continued strong sales momentum.
Expansion of Secured Credit Facilities
ARI upsized its facility with J.P. Morgan by $500 million, bringing total capacity to $2 billion, and extended maturities on key facilities.
Negative Updates
Earnings Below Dividend Rate
Q1 earnings were slightly lower than the current quarterly dividend rate, covering 96% of the quarterly dividends.
Capital Markets Volatility
Increased volatility has led to modest spread widening and a more cautious tone in the market.
Specific Allowances on Non-Accruing Assets
Significant specific allowances were noted, with almost $500 million in non-accruing assets.
Company Guidance
In the first quarter of 2025, Apollo Commercial Real Estate Finance, Inc. (ARI) reported $650 million in new loan commitments, primarily for residential properties in the U.S., with data center construction also highlighted. The company's loan portfolio stood at $7.7 billion across 48 loans, with a weighted average yield of 7.9%. Distributable earnings were $33 million, or $0.24 per share, slightly below the quarterly dividend rate, covering 96% of the dividends. ARI's loan origination efforts, totaling over $5 billion in Q1, were bolstered by strong relationships and a broad-based credit origination strategy. The company expects $1.5 billion in repayments throughout the year, with plans for continued portfolio growth. Despite macroeconomic volatility, ARI is confident in its portfolio's ability to support current dividend rates and remains proactive in asset management, particularly resolving focus assets like 111 West 57th Street, which saw significant sales momentum.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.