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Apollo Commercial Real Estate (ARI)
NYSE:ARI
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Apollo Real Estate (ARI) AI Stock Analysis

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ARI

Apollo Real Estate

(NYSE:ARI)

Rating:57Neutral
Price Target:
$10.50
▼(-4.37% Downside)
Apollo Real Estate's overall stock score reflects a mix of strengths and challenges. The most significant factor is the financial performance, which is hindered by profitability and leverage issues. Technical analysis shows a positive trend, while the earnings call highlights strong loan originations and refinancing efforts. Valuation is mixed, with a negative P/E ratio but a high dividend yield.
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)

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 generates revenue primarily through rental income from its properties, which includes lease agreements with tenants across its portfolio. Additionally, the company earns income from property sales and development projects, where it capitalizes on appreciation and value-add strategies. Key revenue streams also include management fees from investment funds and partnerships, as well as performance fees tied to the profitability of its investments. Significant partnerships with institutional investors and real estate developers further enhance its earnings potential by enabling access to larger capital pools and collaborative development opportunities.

Apollo Real Estate Earnings Call Summary

Earnings Call Date:Jul 29, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 03, 2025
Earnings Call Sentiment Positive
The earnings call conveyed a strong positive sentiment with significant loan originations, portfolio growth, and successful refinancing efforts. However, the presence of non-earning assets like The Brook and 111 West 57th Street presented some challenges.
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% to approximately $8.6 billion, with 53 loans in total.
Successful Refinancing
Completed a new 5-year floating rate $750 million Term Loan B, extending debt maturities to June 2029.
Residential Loan Focus
Residential properties comprise approximately 25% of ARI's portfolio, benefiting from strong secular tailwinds.
Settlement with Commonwealth of Massachusetts
ARI to receive approximately $18 million from a settlement expected to boost book value in the next quarter.
Negative Updates
Non-Earning Assets
The Brook multifamily development and 111 West 57th Street are currently non-earning assets, affecting leverage and cash flow.
Book Value Per Share Decrease
Book value per share, excluding certain allowances and depreciation, slightly decreased from the last quarter.
Company Guidance
During the Apollo Commercial Real Estate Finance Second Quarter 2025 Earnings Call, the company provided guidance indicating strong performance marked by significant progress across several fronts. They reported $1.4 billion in new loan originations for the quarter, bringing year-to-date commitments to $2 billion. The loan portfolio's carrying value increased by 12% from the prior quarter, totaling approximately $8.6 billion across 53 loans. Notably, loans secured by residential properties grew to comprise approximately 25% of the portfolio. In Europe, which represents about 50% of the portfolio, originations have been positively impacted by recent interest rate cuts. The company also highlighted balance sheet optimization efforts, including refinancing a $750 million Term Loan B at SOFR plus 3.25%, extending their next corporate debt maturity to 2029. Distributable earnings for the quarter were $36 million, or $0.26 per share, up 8% from the first quarter, with a book value per share of $12.59.

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
75
Positive
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.
Balance Sheet
60
Neutral
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.
Cash Flow
70
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue632.92M701.53M777.00M641.34M421.23M342.84M
Gross Profit506.86M195.66M658.02M268.89M360.50M303.09M
EBITDA-47.61M-634.86M0.00650.37M417.10M138.75M
Net Income-4.17M-119.64M58.13M265.23M223.51M18.38M
Balance Sheet
Total Assets9.82B8.41B9.30B9.57B8.42B6.94B
Cash, Cash Equivalents and Short-Term Investments177.62M317.40M225.44M222.03M343.11M325.50M
Total Debt7.82B6.39B6.95B6.97B6.01B4.52B
Total Liabilities7.97B6.54B7.09B7.21B6.12B4.67B
Stockholders Equity1.85B1.87B2.21B2.35B2.29B2.27B
Cash Flow
Free Cash Flow83.68M30.75M201.23M234.67M199.25M164.05M
Operating Cash Flow199.71M200.26M273.86M267.70M199.38M164.05M
Investing Cash Flow-462.70M577.17M68.42M-1.34B-1.36B-215.72M
Financing Cash Flow262.19M-689.31M-343.36M957.97M1.18B-75.12M

Apollo Real Estate Technical Analysis

Technical Analysis Sentiment
Positive
Last Price10.98
Price Trends
50DMA
10.02
Positive
100DMA
9.66
Positive
200DMA
9.21
Positive
Market Momentum
MACD
0.24
Negative
RSI
73.84
Negative
STOCH
96.79
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 10.98 is above the 20-day moving average (MA) of 10.32, above the 50-day MA of 10.02, and above the 200-day MA of 9.21, indicating a bullish trend. The MACD of 0.24 indicates Negative momentum. The RSI at 73.84 is Negative, neither overbought nor oversold. The STOCH value of 96.79 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 (53)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
$1.37B11.308.81%11.28%20.32%1.58%
60
Neutral
$1.66B16.304.93%14.55%35.01%1115.85%
57
Neutral
$1.51B-0.35%9.11%-26.29%-342.06%
57
Neutral
$1.09B17.355.50%12.70%1.71%-56.69%
55
Neutral
$1.08B5.06-14.78%16.80%-21.95%-528.94%
53
Neutral
$1.22B3.15-6.08%5.81%-8.21%-81.31%
48
Neutral
$1.76B8.01-2.04%18.20%157.34%91.67%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ARI
Apollo Real Estate
10.98
1.82
19.87%
ARR
ARMOUR Residential REIT
15.82
-1.58
-9.08%
DX
Dynex Capital
12.92
2.18
20.30%
EFC
Ellington Financial
13.83
2.25
19.43%
TWO
Two Harbors
10.36
-1.55
-13.01%
PMT
PennyMac Mortgage
12.60
0.42
3.45%

Apollo Real Estate Corporate Events

Executive/Board ChangesShareholder Meetings
Apollo Real Estate Holds Annual Stockholders Meeting
Neutral
Jun 11, 2025

On June 10, 2025, Apollo Commercial Real Estate Finance, Inc. held its Annual Meeting of Stockholders, where approximately 76.7% of the company’s common stock was represented. During the meeting, stockholders elected nine directors for terms expiring in 2026, ratified Deloitte & Touche LLP as the independent accounting firm for the fiscal year ending December 31, 2025, and approved the compensation of the company’s executive officers.

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.Date of analysis: Aug 22, 2025