Education
About Us
Working with TipRanks
Follow Us
Apollo Commercial Real Estate (ARI)
NYSE:ARI
Top Page
Apollo Real Estate
(NYSE:ARI)
Select Model
Select Model
Rating:64Neutral
Price Target:
$10.50
▲(3.45% Upside)
Apollo Real Estate's strong financial performance and high dividend yield are key strengths, supporting a solid stock score. However, technical indicators suggest bearish momentum, and high leverage poses financial risks. The optimistic earnings call outlook provides a positive counterbalance, highlighting potential for future growth.
Positive Factors
Strong Loan Origination
The ability to originate $1 billion in new loans demonstrates ARI's strong market position and capacity to deploy capital effectively, which is crucial for sustained revenue growth and competitive advantage in the real estate sector.
Robust Cash Flow
Strong free cash flow growth indicates efficient cash generation, enhancing liquidity and financial flexibility, which are vital for long-term operational stability and investment opportunities.
Improved Profit Margins
The significant improvement in net profit margins reflects effective cost management and operational efficiency, supporting sustainable profitability and shareholder value over the long term.
Negative Factors
High Leverage
The high leverage indicates a heavy reliance on debt financing, which could pose financial risks and limit the company's ability to invest in growth opportunities, affecting long-term financial stability.
Distributable Earnings Below Dividend
Earnings falling below the dividend level suggests potential challenges in maintaining dividend payouts, which could impact investor confidence and the company's ability to sustain its dividend policy.
Challenges with Liberty Center Asset
Bankruptcy proceedings related to Liberty Center pose challenges in asset management and sales processes, potentially affecting asset valuation and financial performance in the long term.
Apollo Real Estate (ARI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.40B
Dividend Yield9.89%
Average Volume (3M)957.01K
Price to Earnings (P/E)11.4
Beta (1Y)0.55
Revenue Growth0.29%
EPS GrowthN/A
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.30
Shares Outstanding138,943,830
10 Day Avg. Volume960,064
30 Day Avg. Volume957,015
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.65
Price to Sales (P/S)1.72
P/FCF Ratio39.33
Enterprise Value/Market Cap6.20
Enterprise Value/Revenue14.50
Enterprise Value/Gross Profit17.94
Enterprise Value/Ebitda53.78
Forecast
1Y Price Target
$10.56Price Target Upside4.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)0.94
Revenue Forecast (FY)$242.93M
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:Oct 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 11, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong loan origination activity and liquidity, with significant progress on asset sales and litigation settlements. However, challenges persist with certain assets, such as Liberty Center, and run rate distributable earnings fell below the dividend level. Despite these issues, the call maintained an optimistic tone regarding future asset monetization and capital redeployment.Q3-2025 Updates
Positive Updates
Record Commercial Real Estate Loan Originations
Apollo Commercial Real Estate Finance is on pace for a record year of commercial real estate loan originations, with over $19 billion closed to date.
Strong Origination and Deployment Activity
ARI committed to an additional $1 billion of new loans in Q3 2025, bringing year-to-date originations to $3 billion. The ability to deploy capital in Europe continues to be a differentiating factor.
Robust Loan Portfolio and Liquidity
The company ended the quarter with a carrying value of $8.3 billion for its loan portfolio and strong liquidity of $312 million. Leverage decreased from 4.1 times to 3.8 times.
111 West 57th Street Sales Momentum
Six new contracts were signed at 111 West 57th Street, with three closed post quarter end, generating approximately $55 million in proceeds.
Positive Impact from Litigation Settlement
A $17.4 million gain was recognized from the settlement of litigation related to a Massachusetts healthcare portfolio asset, increasing book value per share by 14¢.
Negative Updates
Run Rate Distributable Earnings Below Dividend Level
Run rate distributable earnings were $32 million, or 23¢ per share, slightly below the dividend level due to timing of capital redeployment.
Challenges with Liberty Center Asset
The parent company of the movie theater at Liberty Center filed for bankruptcy, affecting the sales process and requiring involvement in the bankruptcy proceedings.
Realized Losses and Charge-offs
A $1.2 million loss was realized on the sale of a promissory note, and a $6.2 million charge-off was recorded for the Michigan office loan.
Company Guidance
In the third quarter of 2025, Apollo Commercial Real Estate Finance (ARI) demonstrated robust performance with significant emphasis on loan origination and asset management. The company reported GAAP net income of $48 million, translating to 34¢ per diluted share, and distributable earnings of $42 million or 30¢ per share. During this period, ARI committed to $1 billion in new loans, raising year-to-date originations to $3 billion, with a strong focus on transactions in both the US and Europe. The carrying value of ARI's loan portfolio stood at $8.3 billion, with a weighted average unlevered yield of 7.7%, and 54% of the portfolio consisted of loans originated post-2022 rate hikes. The company's liquidity was robust at $312 million, while leverage decreased from 4.1 times to 3.8 times. ARI also focused on asset sales, including significant progress on properties like 111 West 57th Street, which saw six new contracts signed, generating $55 million in proceeds. Overall, Apollo is on track for a record year in commercial real estate loan originations, exceeding $19 billion closed to date, and continues to maintain a diversified approach in deploying capital and strengthening its financial position.Apollo Real Estate Financial Statement Overview
Summary
Apollo Real Estate shows strong revenue growth and improved profitability with a significant turnaround in net profit margins. However, high leverage poses financial risks, and there is room for improvement in operational efficiency. The cash flow position is strong, with significant free cash flow growth, supporting liquidity and financial flexibility.Income Statement
Apollo Real Estate shows a strong gross profit margin of 82.59% TTM, indicating efficient cost management. The net profit margin has improved to 19.10% TTM from a negative margin in the previous year, reflecting a significant turnaround in profitability. Revenue growth rate is robust at 14.28% TTM, showcasing strong top-line growth. However, the EBIT and EBITDA margins are relatively lower, suggesting room for improvement in operational efficiency.65
Positive
Balance Sheet
The company has a high debt-to-equity ratio of 4.04 TTM, indicating significant leverage, which could pose financial risks. Return on equity is modest at 7.43% TTM, showing moderate profitability on shareholder investments. The equity ratio is low, reflecting a heavy reliance on debt financing, which could impact financial stability.55
Neutral
Cash Flow
Free cash flow growth is impressive at 169.59% TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 0.21, suggesting that operating cash flows are covering net income adequately. The free cash flow to net income ratio is healthy at 0.75, highlighting efficient cash conversion.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 599.48M | 701.53M | 285.16M | 641.34M | 319.28M | 113.70M |
| Gross Profit | 484.68M | 572.06M | 212.40M | 268.89M | 299.36M | 113.70M |
| EBITDA | 161.63M | -634.86M | 0.00 | 650.37M | 0.00 | 0.00 |
| Net Income | 138.17M | -119.64M | 58.13M | 265.23M | 223.51M | 18.38M |
Balance Sheet | ||||||
| Total Assets | 9.52B | 8.41B | 9.30B | 9.57B | 8.42B | 6.94B |
| Cash, Cash Equivalents and Short-Term Investments | 245.86M | 317.40M | 225.44M | 222.03M | 343.11M | 325.50M |
| Total Debt | 7.52B | 6.39B | 6.95B | 6.97B | 6.01B | 4.52B |
| Total Liabilities | 7.66B | 6.54B | 7.09B | 7.21B | 6.12B | 4.67B |
| Stockholders Equity | 1.86B | 1.87B | 2.21B | 2.35B | 2.29B | 2.27B |
Cash Flow | ||||||
| Free Cash Flow | 56.13M | 30.75M | 201.23M | 234.67M | 199.25M | 164.05M |
| Operating Cash Flow | 184.21M | 200.26M | 273.86M | 267.70M | 199.38M | 164.05M |
| Investing Cash Flow | -354.96M | 577.17M | 68.42M | -1.34B | -1.36B | -215.72M |
| Financing Cash Flow | 218.45M | -689.31M | -343.36M | 957.97M | 1.18B | -75.12M |
Apollo Real Estate Technical Analysis
Positive
10.15
Price Trends
9.96
Positive
10.08
Positive
9.66
Positive
Market Momentum
>-0.01
Negative
55.68
Neutral
71.71
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 10.15 is above the 20-day moving average (MA) of 9.95, above the 50-day MA of 9.96, and above the 200-day MA of 9.66, indicating a bullish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 55.68 is Neutral, neither overbought nor oversold. The STOCH value of 71.71 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $1.42B | 17.61 | 5.26% | 8.21% | -17.18% | -17.16% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
65 Neutral | $2.09B | 9.63 | 11.92% | 14.63% | 47.97% | 17.22% | |
64 Neutral | $1.40B | 11.39 | 7.26% | 9.89% | 0.29% | ― | |
61 Neutral | $2.11B | 406.48 | 3.75% | 16.45% | -27.55% | -97.87% | |
61 Neutral | $1.17B | 14.70 | 6.37% | 12.69% | -15.48% | -36.45% | |
50 Neutral | $1.10B | -32.79 | 2.10% | 11.40% | 9.46% | -111.44% |
* Real Estate Sector Average
ARI
Apollo Real Estate
10.15
1.80
21.56%
ARR
ARMOUR Residential REIT
19.12
3.44
21.95%
CIM
Chimera Investment
13.39
0.23
1.75%
DX
Dynex Capital
14.65
3.75
34.38%
PMT
PennyMac Mortgage
13.81
2.62
23.44%
LADR
Ladder Capital
11.19
0.69
6.57%
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.