Education
About Us
Working with TipRanks
Follow Us
Kkr Real Estate Finance Trust Inc (KREF)
NYSE:KREF
Top Page
Kkr Real Estate Finance
(NYSE:KREF)
Rating:54Neutral
Price Target:―
Positive Factors
Market Performance
Analyst's recommendation reiterates a Market Outperform rating for KKR Real Estate Finance Trust Inc. (KREF).
New Loans Originations
KREF is now in a position to commence fresh lending with $224M of new CRE bridge loans already closed.
Negative Factors
Credit Risk Migration
Credit risk migration slipped in the quarter with 10% of the loan portfolio now rated 4/5, up from 8% previously.
Dividend Coverage
KREF's dividend coverage was below 100%, highlighting concerns about its ability to maintain dividend payments at current levels.
Loan Portfolio Contraction
KREF reported a decrease in its loan portfolio, with a contraction of $331.6M despite originating a significant amount of new loans.
Kkr Real Estate Finance (KREF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$597.86M
Dividend Yield10.89%
Average Volume (3M)692.83K
Price to Earnings (P/E)56.2
Beta (1Y)0.66
Revenue Growth-16.46%
EPS GrowthN/A
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength61
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)-0.04
Shares Outstanding65,676,130
10 Day Avg. Volume548,964
30 Day Avg. Volume692,825
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)0.49
Price to Sales (P/S)0.00
P/FCF Ratio5.93
Enterprise Value/Market Cap9.90
Enterprise Value/Revenue4.71
Enterprise Value/Gross Profit30.08
Enterprise Value/Ebitda5.50
Forecast
1Y Price Target
$11.38Price Target Upside25.47% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Kkr Real Estate Finance Business Overview & Revenue Model
Company DescriptionKKR Real Estate Finance Trust Inc. (KREF) is a publicly traded real estate finance company primarily engaged in originating and acquiring senior loans secured by commercial real estate assets. The company operates within the real estate and financial services sector, focusing on providing customized financing solutions to property owners and developers across various commercial real estate sectors, including office, multifamily, industrial, and retail properties. KREF leverages the expertise and resources of its parent company, KKR & Co., a leading global investment firm, to deliver competitive financial products and services.
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: 0.22%|
Next Earnings Date:Oct 27, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong loan demand and diversification strategies balanced against significant losses and asset downgrades. The company is actively managing its portfolio and liquidity remains strong, but challenges with certain assets persist.Q2-2025 Updates
Positive Updates
Strong Loan Pipeline
Loan demand has recovered significantly, with a pipeline running near record levels. The transaction activity is robust, and the lending opportunity remains highly attractive.
Geographical and Investment Diversification
KREF is diversifying its portfolio into Europe and creating more duration through CMBS investments. They anticipate new originations in the European loan market by the end of the year.
Active Share Repurchase Program
KREF repurchased $20 million of stock in the second quarter, contributing to book value per share accretion. A total of $137 million has been repurchased since the inception of the buyback plan.
Robust Liquidity Position
KREF maintains a strong liquidity position with $757 million available, including $108 million of cash on hand and $620 million of undrawn corporate revolver capacity.
Negative Updates
Net Loss and Distributable Loss
KREF 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 the West Hollywood property.
Downgrade of Key Assets
A Boston life science asset was downgraded from a 4-rated loan to a 5-rated loan. A Chicago office loan was also downgraded due to continued market deterioration.
Challenges with REO Assets
The West Hollywood multifamily loan recorded a $20 million loss to distributable earnings, and there are ongoing challenges with other REO assets like the Raleigh Multifamily and Mountain View office.
Company Guidance
During the KKR Real Estate Finance Trust Inc. second-quarter 2025 earnings call, the company provided detailed guidance and insights into its financial performance and strategic direction. The firm reported a GAAP net loss of $35 million or negative $0.53 per share, with a book value per share of $13.84 as of June 30, 2025. Despite a distributable loss of $3 million due to the ownership transition of a West Hollywood property, distributable earnings before realized losses were $16 million or $0.24 per share. The company paid a $0.25 cash dividend for the quarter. Originations reached $211 million, while repayments totaled $450 million. The company anticipates nearly $1 billion in incremental repayments in the second half of the year. KKR aims to diversify its portfolio by entering the European loan market and investing in CMBS to create more duration. Additionally, they have a $352 million REO portfolio, representing approximately $5.34 per share in equity, and have repurchased $20 million of KREF stock at an average price of $9.21 per share. With robust liquidity of $757 million, including $108 million in cash and $620 million in undrawn revolver capacity, KKR emphasized its strategic focus on maximizing shareholder value while navigating the competitive real estate credit market.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 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 155.17M | 175.22M | 174.73M | 151.94M | 125.63M |
| Gross Profit | 155.17M | 164.03M | 163.62M | 122.29M | 101.86M |
| EBITDA | 0.00 | 426.44M | 274.26M | 137.87M | 54.81M |
| Net Income | 35.59M | -30.85M | 38.10M | 137.18M | 54.40M |
Balance Sheet | |||||
| Total Assets | 6.35B | 7.55B | 7.80B | 6.70B | 4.97B |
| Cash, Cash Equivalents and Short-Term Investments | 104.93M | 135.90M | 239.79M | 271.49M | 110.83M |
| Total Debt | 3.86B | 6.06B | 6.16B | 5.29B | 3.88B |
| Total Liabilities | 4.95B | 6.14B | 6.23B | 5.34B | 3.92B |
| Stockholders Equity | 1.35B | 1.40B | 1.57B | 1.36B | 1.05B |
Cash Flow | |||||
| Free Cash Flow | 132.56M | 155.72M | 141.13M | 124.79M | 115.06M |
| Operating Cash Flow | 132.56M | 155.72M | 141.13M | 124.79M | 115.06M |
| Investing Cash Flow | 1.12B | 13.49M | -1.18B | -1.54B | 88.71M |
| Financing Cash Flow | -1.29B | -271.51M | 1.01B | 1.58B | -160.56M |
Kkr Real Estate Finance Technical Analysis
Positive
9.07
Price Trends
8.96
Positive
9.29
Negative
9.85
Negative
Market Momentum
0.03
Negative
56.22
Neutral
63.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KREF, the sentiment is Positive. The current price of 9.07 is above the 20-day moving average (MA) of 9.00, above the 50-day MA of 8.96, and below the 200-day MA of 9.85, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 56.22 is Neutral, neither overbought nor oversold. The STOCH value of 63.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 1 New Risks
1.
Real estate valuation is inherently subjective and uncertain, and is subject to change, especially during periods of volatility. Q4, 2024
Kkr Real Estate Finance Peers Comparison
Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $660.42M | 11.87 | 6.22% | 11.48% | -13.64% | ― | |
61 Neutral | $782.98M | 18.23 | 0.87% | 19.73% | 61.59% | ― | |
58 Neutral | $630.28M | ― | 2.63% | 11.46% | 33.94% | 96.99% | |
54 Neutral | $597.86M | 56.21 | -1.76% | 10.89% | -16.46% | ― | |
54 Neutral | $1.23B | 3.75 | 0.67% | 6.15% | -2.39% | -129.28% | |
48 Neutral | $818.67M | 29.00 | 2.92% | 11.74% | 6.72% | 228.13% | |
46 Neutral | $758.76M | ― | -12.42% | 16.85% | -31.47% | -204.79% |
* Real Estate Sector Average
Performance Comparison
KREF
Kkr Real Estate Finance
9.18
-1.19
-11.48%
RWT
Redwood
6.05
-0.58
-8.75%
NYMT
New York Mortgage
6.98
1.10
18.71%
RC
Ready Capital
4.45
-3.79
-46.00%
ORC
Orchid Island Capital
7.30
0.46
6.73%
TRTX
Tpg Re Finance
8.36
0.34
4.24%
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.