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Kkr Real Estate Finance Trust Inc (KREF)
NYSE:KREF
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Kkr Real Estate Finance
(NYSE:KREF)
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Rating:54Neutral
Price Target:―
KREF shows financial strength in terms of liquidity and pipeline potential, yet faces challenges with income volatility and market uncertainties. The high P/E ratio suggests overvaluation despite an attractive dividend. Technical indicators imply bearish momentum, which could deter potential investors.
Positive Factors
Strong Liquidity Position
A strong liquidity position with no near-term debt maturities enhances financial stability and flexibility, allowing the company to navigate market uncertainties and capitalize on growth opportunities.
Robust Loan Pipeline
A significant loan pipeline indicates strong demand for the company's financing solutions, supporting future revenue growth and reinforcing its market position in the real estate finance sector.
European Market Expansion
Expanding into the European market diversifies revenue streams and reduces geographic risk, potentially enhancing long-term growth prospects and resilience against regional economic fluctuations.
Negative Factors
Net Loss Reported
Reporting a net loss indicates operational challenges and financial pressures, which could impact the company's ability to sustain growth and profitability in the long term if not addressed.
Real Estate Market Uncertainty
Increased market volatility and recession fears can hinder real estate investments and loan performance, posing risks to revenue stability and asset valuations over the medium term.
Loan Downgrade in Raleigh
Loan downgrades reflect credit risk and potential financial losses, which could affect the company's asset quality and necessitate increased provisions or restructuring efforts.
Kkr Real Estate Finance (KREF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$626.20M
Dividend Yield10.53%
Average Volume (3M)666.51K
Price to Earnings (P/E)56.2
Beta (1Y)0.61
Revenue Growth-20.88%
EPS Growth-420.89%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)-0.04
Shares Outstanding65,676,130
10 Day Avg. Volume1,006,384
30 Day Avg. Volume666,507
Financial Highlights & Ratios
PEG Ratio-0.16
Price to Book (P/B)0.52
Price to Sales (P/S)4.52
P/FCF Ratio5.29
Enterprise Value/Market Cap10.02
Enterprise Value/Revenue28.63
Enterprise Value/Gross Profit31.89
Enterprise Value/Ebitda42.15
Forecast
1Y Price Target
$11.00Price Target Upside18.03% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Kkr Real Estate Finance Business Overview & Revenue Model
Company DescriptionKKR Real Estate Finance Trust Inc., a mortgage real estate investment trust, focuses primarily on originating and acquiring senior loans secured by commercial real estate (CRE) assets. It engages in the origination and purchase of credit investments related to CRE, including leveraged and unleveraged commercial mortgage loans, and commercial mortgage-backed securities. The company has elected to be taxed as a real estate investment trust and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. KKR Real Estate Finance Trust Inc. was incorporated in 2014 and is headquartered in New York, New York.
How the Company Makes MoneyKKR Real Estate Finance Trust Inc. generates revenue primarily through interest income from its portfolio of senior loans, which are secured by commercial real estate assets. The company's revenue model is based on the spread between the interest income earned on these loans and the cost of capital, including interest expenses on borrowings and other liabilities. KREF also benefits from origination fees and other transaction-related income associated with its loan activities. Additionally, the company may engage in strategic partnerships and utilize its relationship with KKR & Co. to identify investment opportunities and enhance its market position, contributing to its overall earnings.
Kkr Real Estate Finance Earnings Call Summary
Earnings Call Date:Jul 22, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 27, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balance between positive developments in market opportunities, active share repurchases, and strong liquidity against the backdrop of reported losses, loan downgrades, and challenges in specific sectors.Q2-2025 Updates
Positive Updates
Robust Loan Pipeline and Market Opportunities
Transaction activity and loan demand have recovered, with significant opportunities within the loan pipeline, running near record levels. The company is focused on diversifying geographically into Europe and creating more duration through CMBS investments.
Active Share Repurchase Program
The company repurchased $20 million of KREF stock in the second quarter, contributing to approximately $0.25 of book value per share accretion.
Strong Liquidity Position
At quarter-end, the company had $757 million of liquidity available, including $108 million of cash on hand and $620 million of undrawn corporate revolver capacity.
Positive Developments in REO Assets
Market improvements have been reported for Mountain View, California, with active tenant proposals. A sale of a parcel in Portland, Oregon, closed, and a garage sale in Philadelphia was completed at a level slightly above the carry basis.
Negative Updates
GAAP and Distributable Losses Reported
The company reported a GAAP net loss of $35 million or negative $0.53 per share, and a distributable loss of $3 million due to taking ownership of a West Hollywood property.
Loan Downgrades and Expected Losses
A Boston life science asset was downgraded from a 4-rated loan to a 5-rated loan, and a Chicago office loan was downgraded due to continued market deterioration. A $15 million CECL reserve is expected to convert to a realized loss for the Raleigh Multifamily asset.
Challenges in Life Science Sector
The life science sector remains challenging, with a Boston loan downgraded for the second straight quarter and uncertainty around potential resolutions.
Company Guidance
During the call, KKR Real Estate Finance Trust Inc. provided detailed guidance and metrics for their second-quarter 2025 financial results and future outlook. The company reported a GAAP net loss of $35 million, equating to a negative $0.53 per share, and a distributable loss of $3 million due to taking ownership of a West Hollywood property. The book value per share stood at $13.84 as of June 30, 2025. Despite these losses, KKR paid a $0.25 cash dividend for the quarter. The company originated $211 million in loans, secured by industrial and multifamily properties, while receiving repayments totaling $450 million. Looking ahead, KKR anticipates nearly $1 billion in incremental repayments in the second half of the year and plans to continue diversifying its portfolio, particularly by expanding into the European loan market and making strategic CMBS investments. The company is managing risk by downgrading certain assets, such as a Boston life science asset, and remains focused on maximizing shareholder value through strategic asset management and proactive share repurchases, totaling $20 million in the second quarter. KKR's liquidity remains strong, with $757 million available, including $108 million in cash and $620 million in undrawn corporate revolver capacity.Kkr Real Estate Finance Financial Statement Overview
Summary
Kkr Real Estate Finance exhibits financial resilience with a strong balance sheet and positive cash flow trends. However, the income statement's volatility and historical high leverage require careful monitoring.Income Statement
Kkr Real Estate Finance shows a strong gross profit margin with consistent positive net income in recent periods. The TTM data highlights a substantial increase in revenue compared to the previous year, but net profit margin has been volatile. EBIT margin is improving, suggesting operational efficiency gains. However, the fluctuations in revenue growth and net income suggest potential instability.67
Positive
Balance Sheet
The balance sheet is robust with no total debt reported in the most recent TTM period, indicating strategic debt management. The equity ratio is stable, and return on equity is positive, reflecting efficient use of equity capital. However, historical data suggests high leverage, which may pose risks if not managed carefully.72
Positive
Cash Flow
Cash flow analysis reveals a positive trend in free cash flow, with significant growth in recent TTM data. The operating cash flow to net income ratio indicates strong cash generation capabilities. However, the free cash flow to net income ratio has varied, pointing to possible fluctuations in cash flow sustainability.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 219.15M | 155.17M | 175.22M | 174.73M | 151.94M | 125.63M |
| Gross Profit | 196.76M | 155.17M | 164.03M | 163.62M | 122.29M | 101.86M |
| EBITDA | 148.84M | 0.00 | 426.44M | 274.26M | 137.87M | 54.81M |
| Net Income | -22.09M | 35.59M | -30.85M | 38.10M | 137.18M | 54.40M |
Balance Sheet | ||||||
| Total Assets | 6.76B | 6.35B | 7.55B | 7.80B | 6.70B | 4.97B |
| Cash, Cash Equivalents and Short-Term Investments | 107.72M | 104.93M | 135.90M | 239.79M | 271.49M | 110.83M |
| Total Debt | 5.41B | 3.86B | 6.06B | 6.16B | 5.29B | 3.88B |
| Total Liabilities | 5.46B | 4.95B | 6.14B | 6.23B | 5.34B | 3.92B |
| Stockholders Equity | 1.24B | 1.35B | 1.40B | 1.57B | 1.36B | 1.05B |
Cash Flow | ||||||
| Free Cash Flow | 103.77M | 132.56M | 155.72M | 141.13M | 124.79M | 115.06M |
| Operating Cash Flow | 104.47M | 132.56M | 155.72M | 141.13M | 124.79M | 115.06M |
| Investing Cash Flow | 667.88M | 1.12B | 13.49M | -1.18B | -1.54B | 88.71M |
| Financing Cash Flow | -775.07M | -1.29B | -271.51M | 1.01B | 1.58B | -160.56M |
Kkr Real Estate Finance Technical Analysis
Negative
9.32
Price Trends
9.36
Negative
9.16
Positive
9.54
Negative
Market Momentum
0.02
Positive
43.78
Neutral
41.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KREF, the sentiment is Negative. The current price of 9.32 is below the 20-day moving average (MA) of 9.59, below the 50-day MA of 9.36, and below the 200-day MA of 9.54, indicating a bearish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 43.78 is Neutral, neither overbought nor oversold. The STOCH value of 41.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KREF.
Kkr Real Estate Finance Risk Analysis
Kkr Real Estate Finance disclosed 85 risk factors in its most recent earnings report. Kkr Real Estate Finance 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
Kkr Real Estate Finance Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | 712.03M | 14.00 | ― | 10.87% | -12.51% | ― | |
63 Neutral | 659.29M | 38.46 | -4.45% | 3.25% | 35.74% | ― | |
61 Neutral | 1.02B | 35.60 | ― | 20.60% | 67.17% | ― | |
54 Neutral | $626.20M | 56.21 | -1.76% | 10.53% | -20.88% | -420.89% | |
50 Neutral | 698.39M | -2.18 | -23.71% | 18.07% | -34.48% | -373.29% | |
46 Neutral | 757.25M | -8.94 | -7.04% | 12.41% | 31.71% | -499.14% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% |
* Real Estate Sector Average
Performance Comparison
KREF
Kkr Real Estate Finance
9.32
-2.00
-17.67%
RWT
Redwood
5.80
-1.00
-14.71%
RC
Ready Capital
4.15
-2.77
-40.03%
TRTX
Tpg Re Finance
8.83
1.21
15.88%
FBRT
Franklin BSP Realty Trust
11.23
-0.63
-5.31%
CMTG
Claros Mortgage Trust
3.57
-3.94
-52.46%
Kkr Real Estate Finance Corporate Events
Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
KKR Real Estate Finance Approves 2025 Incentive Plan
Neutral
May 1, 2025
At the 2025 Annual Meeting held on April 25, 2025, KKR Real Estate Finance Trust Inc. received stockholder approval for its 2025 Omnibus Incentive Plan. The meeting also saw the election of eight directors and the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. Additionally, the compensation of the company’s executive officers was approved on an advisory basis. These decisions reflect the company’s ongoing efforts to strengthen its governance and operational framework, potentially impacting its strategic direction and stakeholder confidence.
Spark’s Take on KREF Stock
According to Spark, TipRanks’ AI Analyst, KREF is a Neutral.
KREF shows financial strength in terms of liquidity and pipeline potential, yet faces challenges with income volatility and market uncertainties. The high P/E ratio suggests overvaluation despite an attractive dividend. Technical indicators imply bearish momentum, which could deter potential investors.
To see Spark’s full report on KREF stock, click here.
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.