Ladder Capital (LADR) AI Stock Analysis

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Ladder Capital

(NYSE:LADR)

Rating:71Outperform

Price Target:―

Ladder Capital's overall score reflects strong financial performance and a positive outlook from its earnings call, supported by robust liquidity and strategic investments. However, high leverage and market uncertainties are concerns. Technical analysis shows a neutral trend, and valuation metrics are favorable, contributing to a solid investment case.

Positive Factors

Interest Rate Environment

A more stable interest rate environment should also boost the company’s fee-based CMBS conduit lending business.

Investment Opportunity

LADR shares offer an attractive total return investment opportunity as the company executes on its primary goals of core transitional (bridge) loan portfolio growth and the harvesting of gains on seasoned net lease real estate assets.

Valuation

Ladder Capital's shares are trading at a discount to book value, offering a potential price appreciation of 20% over the last closing price.

Negative Factors

Loan Portfolio

The loan portfolio has decreased by 22.2% from September 30 due to strong borrower repayments.

Ladder Capital (LADR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.35B

Dividend Yield9.04%

Average Volume (3M)764.81K

Price to Earnings (P/E)12.8

Beta (1Y)0.64

Revenue Growth-12.51%

EPS Growth7.76%

CountryUS

Employees54

SectorReal Estate

Sector Strength62

IndustryREIT - Mortgage

Share Statistics

EPS (TTM)0.20

Shares Outstanding128,096,470

10 Day Avg. Volume517,720

30 Day Avg. Volume764,811

Financial Highlights & Ratios

PEG Ratio-2.71

Price to Book (P/B)0.86

Price to Sales (P/S)0.00

P/FCF Ratio10.48

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$12.25

Price Target Upside19.75% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering4

Ladder Capital Business Overview & Revenue Model

Company DescriptionThe Loans segment originates conduit first mortgage loans that are secured by cash-flowing commercial real estate; and originates and invests in balance sheet first mortgage loans secured by commercial real estate properties that are undergoing transition, including lease-up, sell-out, and renovation or repositioning. It also invests in note purchase financings, subordinated debt, mezzanine debt, and other structured finance products related to commercial real estate. The Securities segment invests in commercial mortgage-backed securities and the U.S. Agency Securities. This segment also invests in corporate bonds and equity securities. The Real Estate segment owns and invests in a portfolio of commercial and residential real estate properties, such as leased properties, office buildings, student housing portfolios, hotels, industrial buildings, shopping center, and condominium units. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Ladder Capital Corp was founded in 2008 and is headquartered in New York, New York.

How the Company Makes MoneyLadder Capital generates revenue primarily through interest and fees earned on its portfolio of commercial real estate loans and securities. The company's key revenue streams include income from lending activities, such as interest income from first mortgage loans and balance sheet loans, as well as gains from the sale of CMBS and other real estate-related securities. Additionally, Ladder Capital benefits from equity investments in real estate, generating rental income and potential capital appreciation. Strategic partnerships with institutional investors and financial institutions enhance its ability to source and manage high-quality assets, contributing to its earnings. The company's diversified approach to real estate finance allows it to capitalize on various market opportunities while managing risk effectively.

Ladder Capital Financial Statement Overview

Summary

Ladder Capital shows strong revenue growth and operational efficiency with robust gross and EBITDA margins. However, high leverage poses a potential risk, and there's a need for improvement in net margins and cash flow growth.

Income Statement

Positive

Ladder Capital's TTM (Trailing-Twelve-Months) revenue shows steady growth with a revenue growth rate of 10.07% compared to the previous year. The gross profit margin stands strong at 83.42%, indicating efficient cost management. However, the net profit margin decreased slightly to 33.86% in TTM, reflecting some pressure on net profitability. The EBIT margin improved to 48.51%, showing better operational efficiency. The EBITDA margin is notably high at 107.89%, underscoring strong earnings before interest, taxes, depreciation, and amortization.

Balance Sheet

Neutral

The balance sheet reveals a high debt-to-equity ratio of 1.61, which suggests significant leverage and potential risk if market conditions deteriorate. However, the company maintains reasonable stability with an equity ratio of 33.93%, indicating a balanced asset structure. The return on equity (ROE) for TTM is 6.82%, which is modest and reflects room for enhancement in shareholder returns.

Cash Flow

Positive

Ladder Capital's cash flow position is healthy with an operating cash flow to net income ratio of 1.21, indicating strong cash generation relative to net income. The free cash flow to net income ratio is 1.23, suggesting effective free cash flow management. However, the free cash flow growth rate over the past year shows a slight decline of 5.21%, which could imply some challenges in growing cash reserves.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
305.44M	277.48M	253.50M	339.66M	167.51M	121.02M
	Gross Profit
254.83M	277.48M	189.76M	301.06M	141.35M	43.88M
	EBIT
148.16M	332.32M	123.94M	340.92M	57.45M	-24.23M
	EBITDA
329.63M	364.76M	0.00	398.16M	0.00	14.36M
	Net Income Common Stockholders
103.42M	108.25M	101.13M	142.22M	56.52M	-9.46M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
479.77M	1.32B	1.02B	615.30M	1.25B	1.49B
	Total Assets
4.47B	4.85B	5.51B	5.95B	5.85B	5.88B
	Total Debt
2.71B	3.07B	3.18B	4.25B	4.22B	3.39B
	Net Debt
2.23B	1.75B	2.16B	3.64B	3.67B	2.14B
	Total Liabilities
2.96B	3.31B	3.98B	4.42B	4.23B	4.33B
	Stockholders Equity
1.52B	1.54B	1.53B	1.53B	1.51B	1.54B
Cash Flow		Free Cash Flow
126.94M	133.92M	180.60M	99.76M	74.87M	105.84M
	Operating Cash Flow
125.57M	133.92M	180.60M	106.71M	79.74M	111.94M
	Investing Cash Flow
221.87M	932.76M	793.50M	81.59M	-651.46M	1.54B
	Financing Cash Flow
-636.40M	-796.59M	-557.77M	-150.24M	-91.02M	-725.67M

Ladder Capital Technical Analysis

Technical Analysis Sentiment

Negative

Last Price10.23

Price Trends

50DMA

10.67

Negative

100DMA

10.91

Negative

200DMA

11.01

Negative

Market Momentum

MACD

-0.04

Positive

RSI

40.70

Neutral

STOCH

22.07

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LADR, the sentiment is Negative. The current price of 10.23 is below the 20-day moving average (MA) of 10.48, below the 50-day MA of 10.67, and below the 200-day MA of 11.01, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 40.70 is Neutral, neither overbought nor oversold. The STOCH value of 22.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LADR.

Ladder Capital Risk Analysis

Ladder Capital disclosed 70 risk factors in its most recent earnings report. Ladder Capital 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

Risks associated with climate change may adversely affect our business, financial results, and reputation. Q4, 2024

Ladder Capital Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LADR	71 Outperform	$1.35B	12.81	6.80%	9.04%	-12.51%	7.76%
TRTX	67 Neutral	$625.28M	11.24	6.22%	12.71%	-13.64%	―
ARI	66 Neutral	$1.37B	―	0.41%	11.53%	-14.98%	95.53%
BXMT	63 Neutral	$3.32B	―	-2.06%	10.50%	-20.46%	-1436.71%
Sector *	60 Neutral	$2.75B	10.29	0.33%	8508.22%	5.95%	-17.48%
KREF	54 Neutral	$632.52M	57.76	2.42%	11.31%	-16.46%	―
GPMT	49 Neutral	$116.17M	―	-20.41%	8.58%	-26.87%	-189.15%

* Real Estate Sector Average

Performance Comparison

LADR

Ladder Capital

10.23

0.04

0.39%

ARI

Apollo Real Estate

9.60

0.56

6.19%

BXMT

Blackstone Mortgage

18.68

3.40

22.25%

KREF

Kkr Real Estate Finance

8.88

0.19

2.19%

GPMT

Granite Point Mortgage

2.37

-0.57

-19.39%

TRTX

Tpg Re Finance

7.57

0.03

0.40%

Ladder Capital Earnings Call Summary

Earnings Call Date:Apr 24, 2025

(Q1-2025)

% Change Since: 0.10%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Positive

Ladder Capital demonstrated strong liquidity and low leverage, with substantial loan originations and progress toward an investment grade credit rating. However, challenges such as increased non-accrual loans and market uncertainty due to tariffs and interest rate volatility remain. The company is well-positioned to navigate these challenges and capitalize on opportunities.

Q1-2025 Updates

Positive Updates

Strong Liquidity and Low Leverage

Ladder Capital reported $1.3 billion in liquidity, including $480 million in cash and cash equivalents. The company maintained a modest leverage of 1.83x, significantly below the target range of 2x to 3x.

Substantial Loan Originations

For the first quarter of 2025, Ladder Capital originated $329 million in new loans and acquired $521 million in AAA securities, with new loan originations outpacing payoffs. 74% of these originations were backed by multifamily or industrial assets.

Investment Grade Rating Progress

Ladder Capital remains on a positive outlook from Moody's and Fitch, with ratings just one notch below investment grade. S&P upgraded the company’s credit rating by one notch in 2024.

Stable and Growing Securities Portfolio

The securities portfolio increased 37% from year-end to $1.5 billion, primarily comprised of AAA rated securities with a weighted average yield of 5.67%.

Negative Updates

Increased Non-Accrual Loans

Two additional loans totaling $38.7 million were placed on non-accrual status during the first quarter, increasing the non-accrual loan balance to $116 million across four loans.

Market Uncertainty and Volatility

The reemergence of tariffs and persistent interest rate volatility have contributed to uncertainty, impacting commercial real estate demand and potentially dampening price discovery and deal execution.

Company Guidance

During Ladder Capital Corp's first quarter 2025 earnings call, the company provided detailed financial guidance and metrics. Ladder reported distributable earnings of $25.5 million, or $0.20 per share, achieving a return on equity of 6.6% with an adjusted leverage of 1.4 times. The company originated $329 million in new loans and acquired $521 million in AAA securities, totaling over $800 million in first-quarter investment activity. As of March 31, 2025, Ladder's liquidity stood at $1.3 billion, including $480 million in cash and cash equivalents, with 83% of its asset base unencumbered and 72% of its debt comprised of unsecured corporate bonds. The loan portfolio was valued at $1.7 billion, representing 38% of total assets with a weighted average yield of 8.7%. Ladder's securities portfolio totaled $1.5 billion with a weighted average unlevered yield of 5.67%, predominantly composed of AAA-rated securities. The company maintained a non-accrual loan balance representing only 2.6% of its assets, with a CECL reserve of $52 million. Looking ahead, Ladder is poised to leverage its substantial liquidity and robust balance sheet to capitalize on market opportunities, despite potential volatility, and aims to enhance shareholder value through strategic investments and disciplined financial management.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.