NexPoint Real Estate ate Finance (NREF) AI Stock Analysis

• Market Cap: $247.54M
• Dividend Yield: 14.57%
• Average Volume (3M): 51.53K
• Price to Earnings (P/E): 13.8
• Beta (1Y): 0.47
• Revenue Growth: 11.78%
• EPS Growth: 65.73%
• Country: US
• Employees: 1
• Sector: Real Estate
• Sector Strength: 77
• Industry: REIT - Mortgage
• EPS (TTM): 0.74
• Shares Outstanding: 17,643,526
• 10 Day Avg. Volume: 43,818
• 30 Day Avg. Volume: 51,527
• PEG Ratio: 0.21
• Price to Book (P/B): N/A
• Price to Sales (P/S): 10.97
• Price to Cash Flow (P/CF): 4.70
• P/FCF Ratio: 4.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $15.00
• Price Target Upside: 8.62% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

NexPoint Real Estate Finance's overall stock score is driven by mixed financial performance, with stability in cash flows but high leverage risk. Technical analysis indicates bearish momentum, while valuation presents a balanced outlook with a fair P/E ratio and high dividend yield. Earnings call insights highlight growth areas but also reveal concerns over recent declines in net income and book value coverage.

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.

Financial Performance

NexPoint reported GAAP EPS of $0.43 and earnings available for distribution of $0.83 per share, providing strong coverage of the quarterly dividend.

Investment Pipeline

The pipelines for new construction loans and life science loans are strong, and the company expects to pivot to a more offensive stance in 2025.

Negative Factors

Delinquency Issues

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 Business Overview & Revenue Model

Company Description

NexPoint Real Estate Finance, Inc. operates as a real estate finance company in the United States. It focuses on originating, structuring, and investing in first mortgage loans, mezzanine loans, preferred equity, and preferred stock, as well as multifamily commercial mortgage backed securities securitizations. The company intends to qualify as a real estate investment trust for U.S. 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. The company was incorporated in 2019 and is based in Dallas, Texas.

How the Company Makes Money

NexPoint 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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 13.81
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 13.81 is below the 20-day moving average (MA) of 13.97, below the 50-day MA of 14.93, and below the 200-day MA of 14.70, indicating a bearish trend. The MACD of -0.39 indicates Negative momentum. The RSI at 44.51 is Neutral, neither overbought nor oversold. The STOCH value of 80.32 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NREF.

NexPoint Real Estate ate Finance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SEVN	68 Neutral	$172.28M	9.64	6.53%	12.44%	-6.56%	-31.89%
MITT	68 Neutral	$172.02M	4.70	10.40%	12.14%	50.41%	-21.02%
Sector *	59 Neutral	$2.73B	11.72	0.09%	8795.52%	5.45%	-17.33%
REFI	59 Neutral	$298.36M	7.60	12.76%	13.22%	-1.31%	-10.24%
NREF	53 Neutral	$247.54M	13.80	8.58%	14.57%	11.78%	65.73%
AOMR	49 Neutral	$200.22M	7.27	11.61%	15.15%	73.21%	-13.73%
ACRE	48 Neutral	$195.29M	―	-6.00%	23.87%	-52.08%	10.36%

NexPoint Real Estate ate Finance Corporate Events

NexPoint Real Estate Finance Announces Leadership Changes

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.

NexPoint Announces Key Leadership Changes in Finance

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.