NexPoint Real Estate ate Finance (NREF) AI Stock Analysis

• Market Cap: $253.95M
• Dividend Yield: 14.19%
• Average Volume (3M): 49.87K
• Price to Earnings (P/E): 5.8
• Beta (1Y): 0.62
• Revenue Growth: 25.17%
• EPS Growth: N/A
• Country: US
• Employees: 1
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): 0.43
• Shares Outstanding: 17,721,828
• 10 Day Avg. Volume: 79,271
• 30 Day Avg. Volume: 49,872
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 21.78
• Enterprise Value/Revenue: 49.67
• Enterprise Value/Gross Profit: 72.22
• Enterprise Value/Ebitda: 43.55
• 1Y Price Target: $15.00
• Price Target Upside: 6.46% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 61 Neutral
• 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

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 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 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

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	111.37M	29.20M	42.09M	40.38M	97.37M	43.42M
Gross Profit	76.60M	29.20M	-81.00K	35.99M	34.75M	13.63M
EBITDA	127.03M	90.39M	0.00	11.55M	113.24M	12.85M
Net Income	63.74M	29.19M	13.97M	6.75M	43.09M	12.85M
Balance Sheet
Total Assets	5.40B	5.42B	7.02B	8.15B	8.51B	6.18B
Cash, Cash Equivalents and Short-Term Investments	19.22M	3.88M	13.82M	256.15M	26.46M	30.24M
Total Debt	4.50B	4.58B	6.56B	7.26B	7.71B	5.61B
Total Liabilities	4.97B	4.84B	6.57B	7.61B	8.01B	5.77B
Stockholders Equity	340.34M	333.13M	347.34M	383.98M	238.01M	128.24M
Cash Flow
Free Cash Flow	27.61M	29.28M	31.56M	65.80M	49.30M	32.90M
Operating Cash Flow	27.61M	29.28M	31.56M	65.80M	49.30M	32.90M
Investing Cash Flow	482.41M	956.54M	741.34M	950.58M	517.88M	-68.26M
Financing Cash Flow	-505.82M	-995.42M	-776.60M	-1.03B	-567.41M	68.83M

NexPoint Real Estate ate Finance Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.09
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 14.09 is below the 20-day moving average (MA) of 14.48, below the 50-day MA of 14.15, and above the 200-day MA of 14.01, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 44.97 is Neutral, neither overbought nor oversold. The STOCH value of 22.70 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MITT	67 Neutral	248.15M	9.00	―	10.10%	22.45%	-44.01%
SEVN	66 Neutral	160.18M	10.28	―	12.51%	-16.74%	-32.89%
AOMR	63 Neutral	227.20M	6.19	12.03%	13.39%	75.08%	-21.03%
NREF	61 Neutral	$253.95M	5.84	21.74%	14.19%	25.17%	―
REFI	58 Neutral	280.92M	7.28	0.01%	15.45%	1.75%	-7.07%
ACRE	48 Neutral	262.93M	-14.18	―	16.74%	-27.60%	62.75%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%

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.