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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:52Neutral
Price Target:
$8.50
▲(6.12% Upside)
The score is held back primarily by mixed financial performance—recent earnings volatility/weakness and historically elevated leverage risk—despite consistently positive cash generation. Technicals are neutral with limited momentum, while valuation is helped by a very high dividend yield but constrained by negative earnings. The latest earnings call adds moderate support via strong liquidity and origination guidance, tempered by distributable weakness and credit downgrades.
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
$523.20M
Dividend Yield11.33%
Average Volume (3M)885.33K
Price to Earnings (P/E)―
Beta (1Y)0.41
Revenue Growth-24.37%
EPS Growth-19.19%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)-0.03
Shares Outstanding65,488,680
10 Day Avg. Volume850,918
30 Day Avg. Volume885,326
Financial Highlights & Ratios
PEG Ratio-0.16
Price to Book (P/B)0.52
Price to Sales (P/S)4.62
P/FCF Ratio5.29
Enterprise Value/Market Cap11.32
Enterprise Value/Revenue28.37
Enterprise Value/Gross Profit35.83
Enterprise Value/Ebitda37.49
Forecast
1Y Price Target
$9.94Price Target Upside24.09% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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:Oct 21, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 10, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed sentiment with KREF's expansion into the European market and strong liquidity and financing strength as positive highlights. However, the distributable loss and downgrading of the Cambridge Life Science loan reflected significant challenges. The robust origination pipeline suggests potential growth, but immediate financial performance is under pressure.Q3-2025 Updates
Positive Updates
European Market Expansion
KREF closed its first real estate credit loan in Europe, secured by a 92.5% occupied portfolio of 12 light industrial assets across Paris and Lyon, France. This transaction highlights KREF's ability to leverage KKR's global resources. Over the last few years, KREF has originated over $2.5 billion in Europe.
Liquidity and Financing Strength
KREF successfully upsized its Term Loan B by $100 million to $650 million, with a repricing of 75 basis points tighter, reducing the coupon to SOFR plus 250 basis points. The corporate revolver was also increased to $700 million, resulting in a near-record liquidity level of $933 million.
Strong Origination Pipeline
For the fourth quarter, KREF expects over $400 million in originations and has already closed $110 million across the United States and Europe, indicating robust market activity.
Negative Updates
Distributable Loss
KREF reported a distributable loss of $2 million due primarily to taking ownership of the Raleigh multifamily property. Distributable earnings were negative $0.03 per share, excluding losses, they were $0.18 per share compared to a $0.25 per share dividend.
Cambridge Life Science Loan Downgrade
The Cambridge Life Science loan was downgraded from risk rated three to four, with increased CECL provisions due to the downgrade. Book value per share decreased by 0.4% quarter over quarter to $13.78.
Company Guidance
During the third quarter 2025 conference call, KKR Real Estate Finance Trust Inc. reported several key metrics and provided guidance on future activities. The company recorded a GAAP net income of $8 million, equating to $0.12 per share, and a book value per share of $13.78 as of September 30, 2025. Despite a distributable loss of $2 million, primarily due to acquiring a Raleigh multifamily property, distributable earnings (DE) before net realized losses were $12 million, or $0.18 per share. A cash dividend of $0.25 per share was paid for the quarter. The company anticipates over $400 million in originations in the fourth quarter, having already closed $110 million in the U.S. and Europe. Total financing availability stands at $7.7 billion, with $3.1 billion undrawn. The REO portfolio is expected to unlock $0.13 per share in earnings each quarter over time, with a current portfolio risk rating of 3.1 out of 5 and a CECL reserve of $160 million. The company successfully upsized its Term Loan B by $100 million to $650 million, reducing its coupon to SOFR plus 250 basis points, and ended the quarter with a liquidity of $933 million.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.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.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.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 208.70M | 151.72M | 175.22M | 174.73M | 151.94M | 125.63M |
| Gross Profit | 165.24M | 544.00M | 164.03M | 163.62M | 122.29M | 101.86M |
| EBITDA | 157.91M | 0.00 | 426.44M | 274.26M | 137.87M | 54.81M |
| Net Income | -6.63M | 35.59M | -30.85M | 38.10M | 137.18M | 54.40M |
Balance Sheet | ||||||
| Total Assets | 6.48B | 6.35B | 7.55B | 7.80B | 6.70B | 4.97B |
| Cash, Cash Equivalents and Short-Term Investments | 204.09M | 104.93M | 135.90M | 239.79M | 271.49M | 110.83M |
| Total Debt | 0.00 | 3.86B | 6.06B | 6.16B | 5.29B | 3.88B |
| Total Liabilities | 5.20B | 4.95B | 6.14B | 6.23B | 5.34B | 3.92B |
| Stockholders Equity | 1.23B | 1.35B | 1.40B | 1.57B | 1.36B | 1.05B |
Cash Flow | ||||||
| Free Cash Flow | 72.26M | 124.46M | 153.85M | 141.13M | 124.79M | 115.06M |
| Operating Cash Flow | 73.87M | 132.56M | 155.72M | 141.13M | 124.79M | 115.06M |
| Investing Cash Flow | 807.36M | 1.12B | 13.49M | -1.18B | -1.54B | 88.71M |
| Financing Cash Flow | -785.24M | -1.29B | -271.51M | 1.01B | 1.58B | -160.56M |
Kkr Real Estate Finance Technical Analysis
Negative
8.01
Price Trends
8.31
Negative
8.66
Negative
8.73
Negative
Market Momentum
-0.16
Positive
41.66
Neutral
38.77
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 8.01 is below the 20-day moving average (MA) of 8.32, below the 50-day MA of 8.31, and below the 200-day MA of 8.73, indicating a bearish trend. The MACD of -0.16 indicates Positive momentum. The RSI at 41.66 is Neutral, neither overbought nor oversold. The STOCH value of 38.77 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
64 Neutral | $707.48M | 13.87 | 5.87% | 10.48% | -10.86% | -5.90% | |
61 Neutral | $808.72M | 12.41 | 5.88% | 13.31% | -0.93% | -1.92% | |
52 Neutral | $523.20M | -23.03 | -0.16% | 11.33% | -24.37% | -19.19% | |
49 Neutral | $722.09M | -6.86 | -9.19% | 13.13% | 34.68% | -251.91% | |
47 Neutral | $389.81M | -1.06 | -19.24% | ― | -65.32% | -325.73% | |
44 Neutral | $350.19M | -1.07 | -14.78% | 26.82% | -43.56% | -166.72% |
* Real Estate Sector Average
KREF
Kkr Real Estate Finance
8.01
-1.50
-15.77%
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FBRT
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10.02
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CMTG
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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.