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NexPoint Real Estate ate Finance (NREF)
NYSE:NREF
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NexPoint Real Estate ate Finance (NREF) AI Stock Analysis

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NREF

NexPoint Real Estate ate Finance

(NYSE:NREF)

Rating:61Neutral
Price Target:
NexPoint Real Estate Finance receives a moderate score of 61. The company's financial performance reflects mixed results with high leverage and revenue instability, balanced by stable cash flows. Positive earnings call guidance and strong income growth are notable strengths. However, technical indicators suggest weak momentum, and challenges in lab leasing and credit loss provisions present risks. The high dividend yield enhances its attractiveness for income-focused investors.
Positive Factors
Dividend and Valuation
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 Strategy
NexPoint is optimistic on the outlook for 2025 and is seeing improving fundamentals across CRE asset and property types.
Negative Factors
Delinquency and Forbearance
Delinquency on two Freddie Mac K series loans increased and the company granted short-term forbearance to help facilitate a payoff.
Leverage and Market Conditions
NexPoint has taken steps to bring down overall leverage, which will allow the company to shift back to offense when market conditions improve.

NexPoint Real Estate ate Finance (NREF) vs. SPDR S&P 500 ETF (SPY)

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 Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While the company experienced significant growth in net income and interest income, challenges in earnings distribution, residential supply pressures, and storage sector struggles tempered the positive aspects. The successful lease agreement in the life science sector and a low leverage profile provide optimism, but the overall picture remains balanced between positive and negative factors.
Q2-2025 Updates
Positive Updates
Increase in Net Income
Net income increased to $0.54 per diluted share in Q2 2025 from $0.40 per diluted share in Q2 2024, driven by an increase in interest income.
Interest Income Growth
Interest income rose by $4.6 million to $22.8 million in Q2 2025 from $18.2 million in Q2 2024, primarily due to increased income from investments.
Decrease in Interest Expense
Interest expense decreased by $700,000 in Q2 2025 compared to the same period in the prior year, attributed to deleveraging efforts.
Stabilized Occupancy Rate Improvement
The national stabilized occupancy rate improved to 94.6% in July, with demand outperforming expectations in the first half of the year.
Life Science Lease Agreement
A 245,000 square foot lease was secured with an AI biologics company, producing a debt yield of just over 8% for the Alewife project.
Low Leverage Profile
The company maintains a low leverage profile, providing various capital options to pursue accretive growth.
Negative Updates
Decline in Earnings and Cash Available for Distribution
Earnings available for distribution decreased to $0.43 per diluted common share in Q2 2025 from $0.68 in Q2 2024. Cash available for distribution also dropped to $0.46 per diluted common share from $0.64 in the same period.
Challenges in the Residential Sector
Supply pressures continue to present challenges, particularly in Sunbelt markets, despite easing somewhat.
Storage Sector Struggles
REITs are experiencing flat to negative revenue and NOI growth due to a sluggish housing market and elevated mortgage rates.
Company Guidance
During the NexPoint Real Estate Finance Q2 2025 earnings call, the company provided guidance for the upcoming third quarter. They projected earnings available for distribution at $0.42 per diluted common share, with a range between $0.37 and $0.47. They also guided cash available for distribution at $0.50 per diluted common share, with a range from $0.45 to $0.55. The company reported a net income of $0.54 per diluted share for Q2 2025, an increase from $0.40 in Q2 2024, attributed to a $4.6 million rise in interest income. The call also highlighted a decrease in interest expense by $700,000, a book value per share increase to $17.40, and a regular dividend payout of $0.50 per share. The company's portfolio includes 86 investments valued at $1.1 billion, with a debt-to-equity ratio of 1.14x.

NexPoint Real Estate ate Finance Financial Statement Overview

Summary
NexPoint Real Estate Finance demonstrates a mixed financial performance with areas of concern. Income statement metrics reveal instability in revenue and profitability. The balance sheet suggests high leverage with fluctuating equity levels, typical of the REIT sector but risky if not managed well. Cash flows are relatively stable and show growth potential, although volatility in investing and financing cash flows suggests strategic or market-driven changes.
Income Statement
45
Neutral
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
50
Neutral
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
55
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue111.37M29.20M42.09M40.38M97.37M43.42M
Gross Profit76.60M29.20M-81.00K35.99M34.75M13.63M
EBITDA127.03M90.39M0.0011.55M113.24M12.85M
Net Income63.74M29.19M13.97M6.75M43.09M12.85M
Balance Sheet
Total Assets5.40B5.42B7.02B8.15B8.51B6.18B
Cash, Cash Equivalents and Short-Term Investments19.22M3.88M13.82M256.15M26.46M30.24M
Total Debt4.50B4.58B6.56B7.26B7.71B5.61B
Total Liabilities4.97B4.84B6.57B7.61B8.01B5.77B
Stockholders Equity340.34M333.13M347.34M383.98M238.01M128.24M
Cash Flow
Free Cash Flow27.61M29.28M31.56M65.80M49.30M32.90M
Operating Cash Flow27.61M29.28M31.56M65.80M49.30M32.90M
Investing Cash Flow482.41M956.54M741.34M950.58M517.88M-68.26M
Financing Cash Flow-505.82M-995.42M-776.60M-1.03B-567.41M68.83M

NexPoint Real Estate ate Finance Technical Analysis

Technical Analysis Sentiment
Positive
Last Price14.85
Price Trends
50DMA
14.27
Positive
100DMA
14.13
Positive
200DMA
14.53
Positive
Market Momentum
MACD
0.22
Negative
RSI
54.23
Neutral
STOCH
35.21
Neutral
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 14.85 is above the 20-day moving average (MA) of 14.67, above the 50-day MA of 14.27, and above the 200-day MA of 14.53, indicating a bullish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 54.23 is Neutral, neither overbought nor oversold. The STOCH value of 35.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NREF.

NexPoint Real Estate ate Finance Risk Analysis

NexPoint Real Estate ate Finance disclosed 106 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
67
Neutral
$239.90M8.678.66%10.55%22.45%-44.01%
67
Neutral
$300.10M7.7612.63%14.51%1.75%-7.07%
66
Neutral
$161.69M10.315.71%12.38%-16.74%-32.89%
63
Neutral
$7.06B13.77-0.50%7.05%4.08%-25.24%
63
Neutral
$234.32M6.3814.91%13.39%75.08%-21.03%
61
Neutral
$265.83M6.1121.74%13.47%25.17%
48
Neutral
$259.63M-3.30%17.06%-27.60%62.75%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NREF
NexPoint Real Estate ate Finance
14.85
0.89
6.38%
ACRE
Ares Commercial
4.69
-1.34
-22.22%
SEVN
Seven Hills Realty Trust
10.74
-1.62
-13.11%
MITT
AG Mortgage
7.49
0.95
14.53%
AOMR
Angel Oak Mortgage
9.56
-0.07
-0.73%
REFI
Chicago Atlantic Real Estate ate Finance Inc
14.20
0.44
3.20%

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
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.Date of analysis: May 03, 2025