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Nexpoint Real Estate Finance Inc (NREF)
:NREF
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NexPoint Real Estate ate Finance
(NYSE:NREF)
54Neutral
Positive Factors
Dividend Yield
Shares of NREF are now trading at 0.97x P/BV with a 12.3% dividend yield, which is higher than the median dividend yield of its peer group.
Outlook and Strategic Positioning
NexPoint is optimistic on the outlook for 2025 and is seeing improving fundamentals across CRE asset and property types.
Negative Factors
Loan Delinquency
Delinquency on two Freddie Mac K series loans increased and the company granted short-term forbearance to help facilitate a payoff.
NexPoint Real Estate ate Finance (NREF) vs. S&P 500 (SPY)
Market Cap
$269.77M
Dividend Yield13.08%
Average Volume (3M)44.89K
Price to Earnings (P/E)15.0
Beta (1Y)0.70
Revenue Growth11.78%
EPS Growth65.73%
CountryUS
Employees1
SectorReal Estate
Sector Strength70
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.74
Shares Outstanding17,643,526
10 Day Avg. Volume53,447
30 Day Avg. Volume44,894
Financial Highlights & Ratios
PEG Ratio0.23
Price to Book (P/B)N/A
Price to Sales (P/S)10.97
Price to Cash Flow (P/CF)4.70
P/FCF Ratio4.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.50Price Target Upside3.82% Upside
Rating ConsensusHold
Number of Analyst Covering2
NexPoint Real Estate ate Finance Business Overview & Revenue Model
Company DescriptionNexPoint Real Estate Finance (NREF) is a real estate investment trust (REIT) that focuses on originating, structuring, and investing in commercial real estate debt. The company primarily operates within the commercial real estate sector, deploying capital through senior loans, mezzanine loans, and preferred equity. NREF's core services include real estate financing solutions tailored to meet the needs of property owners and developers across various property types, including multifamily, office, and industrial spaces.
How the Company Makes MoneyNexPoint Real Estate Finance generates revenue primarily through interest income from its investment portfolio of commercial real estate debt. The company's key revenue streams include income from senior loans, mezzanine loans, and preferred equity investments. These financing solutions provide borrowers with capital while allowing NREF to earn interest over the duration of the loan agreements. Additionally, the company may benefit from origination fees and other transaction-related income. NREF's earnings are significantly influenced by factors such as interest rates, property market conditions, and the creditworthiness of its borrowers. The company's strategic partnerships with real estate operators and developers enhance its ability to source and manage profitable investment opportunities.
NexPoint Real Estate ate Finance Financial Statement Overview
Summary
NexPoint Real Estate Finance exhibits mixed financial performance. The income statement reflects instability in revenue and profitability, with a negative EBIT margin in 2024. The balance sheet indicates high leverage typical of the REIT sector, posing potential risks if not managed well. Cash flows are relatively stable and show growth potential, but volatility in investing and financing cash flows indicates strategic or market-driven changes.Income Statement
The income statement shows mixed performance. The gross profit margin remains solid as gross profit matches total revenue, but net profit margin fluctuates due to inconsistent net income. Revenue growth is volatile, with a decline from 2023 to 2024 after a previous increase, indicating instability. The EBIT margin is negative in 2024, reflecting operational challenges, while the lack of EBITDA suggests limited operational efficiency.45
Neutral
Balance Sheet
The balance sheet reveals moderate financial health. A significant reduction in total debt from 2023 to 2024 is a positive sign, but the debt-to-equity ratio is unavailable due to no reported debt in 2024. ROE was strong in earlier years but has been inconsistent. The equity ratio illustrates low shareholder equity relative to total assets, suggesting high leverage which is typical for the REIT industry but presents risk.50
Neutral
Cash Flow
Cash flow analysis shows moderate stability. Operating cash flow remains positive, supporting net income, with a stable operating cash flow to net income ratio. Free cash flow shows positive growth in 2024, reflecting improved liquidity. However, cash flows from investing and financing activities are highly volatile, indicating potential strategic shifts or external financial pressures.55
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 120.79M | 28.14M | 42.09M | 13.52M | 44.55M | 19.49M | Gross Profit |
| 111.72M | 28.14M | 42.09M | 2.12M | 37.08M | 13.63M | EBIT |
| 106.85M | -8.51M | 25.42M | 20.84M | 43.09M | 12.85M | EBITDA |
| 74.71M | 0.00 | 0.00 | 11.55M | 43.09M | 12.85M | Net Income Common Stockholders |
| 29.60M | 17.69M | 13.97M | 57.70M | 43.09M | 12.85M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 601.00K | 3.88M | 13.82M | 256.15M | 26.46M | 30.24M | Total Assets |
| 41.06M | 5.42B | 7.02B | 8.15B | 8.51B | 6.18B | Total Debt |
| 36.70M | 0.00 | 6.56B | 7.26B | 7.71B | 5.61B | Net Debt |
| 36.10M | -3.88M | 6.54B | 7.24B | 7.69B | 5.58B | Total Liabilities |
| 37.96M | 4.84B | 6.57B | 7.61B | 8.25B | 5.77B | Stockholders Equity |
| 2.42M | 336.48M | 347.34M | 383.98M | 28.48M | 128.24M |
| Cash Flow | Free Cash Flow | ||||
| 26.24M | 29.28M | 31.56M | 65.80M | 79.09M | 21.12M | Operating Cash Flow |
| 28.05M | 29.28M | 31.56M | 65.80M | 49.30M | 32.90M | Investing Cash Flow |
| 837.79M | 956.54M | 741.34M | 950.58M | 517.88M | -68.26M | Financing Cash Flow |
| -840.06M | -995.42M | -776.60M | -1.03B | -567.41M | 68.83M |
NexPoint Real Estate ate Finance Technical Analysis
Negative
14.93
Price Trends
15.33
Negative
15.46
Negative
14.59
Positive
Market Momentum
-0.04
Positive
38.21
Neutral
27.68
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NREF, the sentiment is Negative. The current price of 14.93 is below the 20-day moving average (MA) of 15.60, below the 50-day MA of 15.33, and above the 200-day MA of 14.59, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 38.21 is Neutral, neither overbought nor oversold. The STOCH value of 27.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NREF.
NexPoint Real Estate ate Finance Risk Analysis
NexPoint Real Estate ate Finance disclosed 103 risk factors in its most recent earnings report. NexPoint Real Estate ate 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
NexPoint Real Estate ate Finance Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $2.23B | 9.96 | 8.62% | 14.64% | -11.26% | -33.80% | |
69 Neutral | $6.68B | 17.97 | 5.55% | 9.71% | -0.97% | 3.75% | |
68 Neutral | $1.45B | 13.26 | 7.06% | 8.06% | -5.09% | 6.25% | |
61 Neutral | $1.33B | ― | -6.02% | 12.54% | -9.71% | -426.57% | |
61 Neutral | $4.72B | 17.64 | -3.07% | 10.89% | 5.99% | -21.86% | |
60 Neutral | $3.43B | ― | -5.01% | 10.90% | -12.86% | -182.05% | |
54 Neutral | $269.77M | 15.04 | 8.58% | 13.08% | 11.78% | 65.73% |
* Real Estate Sector Average
Performance Comparison
NREF
NexPoint Real Estate ate Finance
14.93
3.41
29.60%
ARI
Apollo Real Estate
9.58
-0.16
-1.64%
ABR
Arbor Realty
11.89
0.44
3.84%
BXMT
Blackstone Mortgage
19.87
2.58
14.92%
STWD
Starwood Property
19.83
1.92
10.72%
LADR
Ladder Capital
11.40
1.37
13.66%
NexPoint Real Estate ate Finance Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -4.96% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed picture with notable increases in full-year net income and cash available for distribution, indicating strong portfolio performance and growth prospects in life sciences and multifamily sectors. However, there are concerns regarding the decrease in Q4 net income and book value coverage as well as some delinquency in the Freddie Mac K-series portfolio.Highlights
Increase in Net Income for Full Year
Net income for the full year of 2024 increased to $1.02 per diluted share from $0.60 per diluted share in 2023, driven by an increase in net interest income.
Earnings Available for Distribution Growth
Earnings available for distribution increased to $0.83 per diluted common share in Q4 2024 compared to $0.44 in Q4 2023.
Cash Available for Distribution Increase
Cash available for distribution for the full year increased to $2.42 per diluted share in 2024 from $2.05 in 2023, representing an increase of 18%.
Strong Portfolio Performance
The portfolio remains strong with diversified investments and a collateralization rate of 76.5% stabilized assets, a loan-to-value of 59.2%, and a weighted average DSCR of 1.32 times.
Life Sciences and Multifamily Growth Prospects
Life sciences and multifamily sectors are expected to see significant growth with investments in construction financing and advanced manufacturing opportunities.
Lowlights
Decrease in Net Income for Q4
Net income for Q4 2024 decreased to $0.43 per diluted share from $0.73 per diluted share in the same period of 2023, due to an unrealized loss on common stock investments.
Decrease in Book Value Coverage
Cash available for distribution was 0.94 times the dividend coverage in Q4, slightly below 1, indicating a decrease in book value coverage.
Freddie Mac K-Series Delinquency Concerns
Some concern over B-piece loans with a few loans (two loans) having 30-60 days delinquency in the Freddie Mac K series portfolio.
Company Guidance
During the NexPoint Real Estate Finance, Inc. Q4 2024 earnings call, guidance for the first quarter of 2025 was provided, indicating anticipated earnings available for distribution at $0.45 per diluted common share, with a range between $0.40 and $0.50. Cash available for distribution is expected to be $0.50 per diluted common share, ranging from $0.45 to $0.55. The company also highlighted a regular dividend of $0.50 per share declared for Q1 2025. The call detailed Q4 2024 financial results, noting a net income of $0.43 per diluted share and a substantial increase in interest income to $32.3 million, up from $16.9 million in Q4 2023. NexPoint's diversified investments across sectors and geographic regions were discussed, with key allocations in multifamily and life sciences. The company anticipates growth in its multifamily and storage portfolios and is actively exploring opportunities in life sciences and manufacturing, supported by strong capital options.NexPoint Real Estate ate Finance Corporate Events
Executive/Board Changes
NexPoint Real Estate Finance Announces Leadership Changes
Neutral
Dec 27, 2024
NexPoint Real Estate Finance, Inc. has announced changes in its senior leadership as Brian Mitts resigns from his key financial positions effective December 31, 2024. Paul Richards will assume the roles of Chief Financial Officer and principal financial officer on January 1, 2025, bringing his extensive experience in asset management and finance from his previous roles within the company and its affiliates.
Executive/Board Changes
NexPoint Announces Key Leadership Changes in Finance
Neutral
Nov 14, 2024
Brian Mitts, CFO of NexPoint Real Estate Finance, is stepping down but will remain on the board, with a comprehensive separation agreement involving stock options and severance. His successor, Paul Richards, brings a wealth of experience from various roles within the company and its affiliates. Meanwhile, David Willmore is set to become the Chief Accounting Officer, offering over a decade of expertise in finance and accounting. These leadership changes mark significant shifts within NexPoint’s financial management structure.
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.