Ares Commercial Real Estate Corporation Fundamental Analysis (NYSE: ACRE)
Ares Commercial Real Estate Corporation Fundamental Analysis (NYSE: ACRE)
Ares Commercial Real Estate Corporation (NYSE: ACRE) shows weak financial fundamentals with a PE ratio of 181.00, profit margin of 1.13%, and ROE of 0.19%. The company generates $0.1B in annual revenue with strong year-over-year growth of 22.54%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 41.4/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ACRE's fundamental strength across five key dimensions:
Efficiency Score
WeakACRE struggles to generate sufficient returns from assets.
Valuation Score
ModerateACRE shows balanced valuation metrics.
Growth Score
ExcellentACRE delivers strong and consistent growth momentum.
Financial Health Score
ModerateACRE shows balanced financial health with some risks.
Profitability Score
ModerateACRE maintains healthy but balanced margins.
Key Financial Metrics
Is ACRE Expensive or Cheap?
P/E Ratio
ACRE trades at 181.00 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ACRE's PEG of -0.01 indicates potential undervaluation.
Price to Book
The market values Ares Commercial Real Estate Corporation at 0.41 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.03 times EBITDA. This is generally considered low.
How Well Does ACRE Make Money?
Net Profit Margin
For every $100 in sales, Ares Commercial Real Estate Corporation keeps $1.13 as profit after all expenses.
Operating Margin
Core operations generate 26.74 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $0.19 in profit for every $100 of shareholder equity.
ROA
Ares Commercial Real Estate Corporation generates $0.05 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Ares Commercial Real Estate Corporation produces operating cash flow of $13.66M, showing steady but balanced cash generation.
Free Cash Flow
Ares Commercial Real Estate Corporation generates strong free cash flow of $13.36M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.24 in free cash annually.
FCF Yield
ACRE converts 6.64% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
181.000
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.01
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.41
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.37
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.00
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.00
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.002
vs 25 benchmark
ROA
Return on assets percentage
0.001
vs 25 benchmark
ROCE
Return on capital employed
0.01
vs 25 benchmark
How ACRE Stacks Against Its Sector Peers
| Metric | ACRE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 181.00 | 25.26 | Worse (Expensive) |
| ROE | 0.19% | 722.00% | Weak |
| Net Margin | 1.13% | 2077.00% | Weak |
| Debt/Equity | 0.00 | -37.25 (disorted) | Distorted |
| Current Ratio | 0.00 | 91.70 | Weak Liquidity |
| ROA | 0.05% | 270.00% | Weak |
ACRE outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Ares Commercial Real Estate Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-34.83%
Industry Style: Income, Inflation Hedge, REIT
DecliningEPS CAGR
-102.48%
Industry Style: Income, Inflation Hedge, REIT
DecliningFCF CAGR
-59.61%
Industry Style: Income, Inflation Hedge, REIT
Declining