NexPoint Real Estate ate Finance (NREF) AI Stock Analysis

• Market Cap: $256.61M
• Dividend Yield: 15.05%
• Average Volume (3M): 53.71K
• Price to Earnings (P/E): 5.1
• Beta (1Y): 0.48
• Revenue Growth: 15.51%
• EPS Growth: 210.91%
• Country: US
• Employees: 1
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): 0.51
• Shares Outstanding: 17,721,828
• 10 Day Avg. Volume: 43,530
• 30 Day Avg. Volume: 53,714
• PEG Ratio: 0.13
• Price to Book (P/B): 0.82
• Price to Sales (P/S): 2.48
• P/FCF Ratio: 9.32
• Enterprise Value/Market Cap: 21.35
• Enterprise Value/Revenue: 32.72
• Enterprise Value/Gross Profit: 34.34
• Enterprise Value/Ebitda: 36.48
• 1Y Price Target: $14.13
• Price Target Upside: -2.42% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3
• EPS Forecast (FY): 1.9
• Revenue Forecast (FY): $74.10M

• Rating: 74 Outperform
• Price Target: $16.00 ▲(10.50% Upside)

NexPoint Real Estate Finance's strong valuation and positive technical indicators are the most significant factors driving the stock score. Financial performance is solid but tempered by high leverage and cash flow concerns. The mixed earnings call outlook slightly impacts the score, but strategic actions provide some optimism.

Positive Factors

Interest Income Growth

The surge in interest income reflects effective capital deployment and favorable interest rate conditions, bolstering long-term revenue potential.

Strategic Sector Focus

Focus on multifamily and life sciences sectors positions NREF to capitalize on growing demand and sector resilience, supporting sustained growth.

Dual Listing

Dual listing enhances market visibility and access to a broader investor base, potentially improving liquidity and shareholder value over time.

Negative Factors

Revenue Instability

Volatile revenue growth indicates challenges in maintaining consistent income streams, which could impact long-term financial stability.

High Leverage

High leverage can limit financial flexibility and increase risk, especially in volatile market conditions, potentially affecting long-term sustainability.

Credit Loss Provisions

Credit loss provisions indicate underlying asset risk, which could impact future profitability and necessitate cautious risk management strategies.

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 loan portfolio, which consists of first mortgage loans, mezzanine loans, and preferred equity investments. The company earns interest on the loans it originates, which is a key revenue stream. Additionally, NREF may also generate income from management fees and servicing fees related to its investments. The company often partners with established real estate operators and developers, allowing it to access lucrative investment opportunities and share in the financial upside of successful projects. Furthermore, the firm's strategic focus on multifamily and other resilient property types contributes to the stability and growth of its earnings.

NexPoint Real Estate ate Finance Financial Statement Overview

Summary

NexPoint Real Estate Finance shows strong revenue growth and profitability with high margins. However, the high debt-to-equity ratio and negative free cash flow growth present potential risks. Effective management of debt levels is crucial to maintain financial stability.

Income Statement

NexPoint Real Estate Finance shows strong revenue growth with a 26.7% increase in TTM, indicating robust business expansion. The gross profit margin is high at 92.15%, reflecting efficient cost management. The net profit margin is also impressive at 55.04%, suggesting strong profitability. However, the EBIT and EBITDA margins are unusually high, which may require further investigation.

Balance Sheet

The company has a high debt-to-equity ratio of 13.53, indicating significant leverage, which could pose financial risks. Return on equity is solid at 21.54%, showing effective use of equity to generate profits. However, the high leverage could impact financial stability if not managed carefully.

Cash Flow

Free cash flow growth is negative at -17.23%, which is a concern for future liquidity. The operating cash flow to net income ratio is low at 0.14, suggesting potential cash flow issues. However, the free cash flow to net income ratio is stable at 1.0, indicating that the company is generating enough free cash flow relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	167.45M	110.32M	42.09M	40.38M	34.75M	19.49M
Gross Profit	159.55M	99.25M	37.90M	35.99M	34.75M	19.49M
EBITDA	150.18M	90.39M	0.00	57.35M	0.00	0.00
Net Income	96.42M	29.19M	13.97M	6.75M	43.09M	12.85M
Balance Sheet
Total Assets	5.28B	5.42B	7.02B	8.15B	8.51B	6.18B
Cash, Cash Equivalents and Short-Term Investments	21.56M	3.88M	13.82M	20.05M	26.46M	30.24M
Total Debt	4.48B	4.82B	6.56B	7.59B	8.00B	5.77B
Total Liabilities	4.50B	4.84B	6.57B	7.61B	8.01B	5.77B
Stockholders Equity	375.42M	482.18M	355.94M	383.98M	238.01M	128.24M
Cash Flow
Free Cash Flow	31.81M	29.28M	31.56M	65.80M	49.30M	32.90M
Operating Cash Flow	31.81M	29.28M	31.56M	65.80M	49.30M	32.90M
Investing Cash Flow	500.26M	956.54M	741.34M	950.58M	517.88M	-68.26M
Financing Cash Flow	-549.22M	-995.42M	-776.60M	-1.03B	-567.41M	68.83M

NexPoint Real Estate ate Finance Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 14.48 is above the 20-day moving average (MA) of 13.75, above the 50-day MA of 13.78, and above the 200-day MA of 13.88, indicating a bullish trend. The MACD of 0.18 indicates Negative momentum. The RSI at 63.40 is Neutral, neither overbought nor oversold. The STOCH value of 91.62 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
REFI	75 Outperform	$268.92M	7.54	11.82%	16.14%	-1.57%	-15.32%
NREF	74 Outperform	$256.61M	5.07	27.37%	15.05%	15.51%	210.91%
SEVN	66 Neutral	$141.62M	9.06	5.72%	14.15%	-18.06%	-18.94%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
MITT	60 Neutral	$259.67M	8.79	9.03%	9.90%	20.44%	-59.21%
AOMR	55 Neutral	$219.24M	12.31	6.67%	14.55%	65.86%	-74.61%
ACRE	48 Neutral	$291.64M	―	-1.42%	15.59%	-30.60%	87.95%

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.