ACRE Stock Intrinsic Value – JMP Cuts Ares Commercial Real Estate to Market Perform Due to Credit Challenges

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Ares Commercial Real ($NYSE:ACRE) Estate (ARES) has been downgraded to a Market Perform rating by JMP due to its recent credit challenges. ARES is a commercial real estate lending, investment, and advisory firm that provides flexible financing solutions to middle-market companies. The company’s products include senior secured debt, mezzanine debt, preferred equity, and various derivatives. Recently, ARES has struggled with a significant amount of credit pressure that has led JMP to downgrade the company’s rating.

ARES has also experienced a decrease in its net interest income due to rising interest rates and an increase in its operating expenses. Investors should keep an eye on ARES and its credit profile going forward to determine if the company will be able to overcome its current difficulties.

Stock Price

This had a direct impact on the stock market as the stock opened at $10.1 and closed at the same price, down 2.0% from the prior closing of 10.3. Many analysts are now questioning whether or not the company will be able to sustain their current financial position in the long run. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for ACRE. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for ACRE. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for ACRE. More…

Key Ratios Snapshot

Some of the financial key ratios for ACRE are shown below. More…

Analysis – ACRE Stock Intrinsic Value

At GoodWhale, we have conducted an in-depth analysis of the fundamentals of ARES COMMERCIAL REAL ESTATE. Through our proprietary Valuation Line, we have determined that the intrinsic value of ARES COMMERCIAL REAL ESTATE’s share is around $12.4. However, the stock is currently trading at $10.1, representing a fair price that is undervalued by 18.7%. More…

Peers

The company has a strong focus on providing financing for middle-market borrowers. Ares Commercial Real Estate Corp is a publicly traded company that is listed on the New York Stock Exchange. The company has a market capitalization of approximately $2.3 billion. Ares Commercial Real Estate Corp is headquartered in New York, New York. The company’s main competitors are TPG RE Finance Trust Inc, KKR Real Estate Finance Trust Inc, and ACRES Commercial Realty Corp.

– TPG RE Finance Trust Inc ($NYSE:TRTX)

TPG RE Finance Trust Inc has a market cap of 623.1M as of 2022. The company focuses on originating and acquiring first mortgage loans secured by properties located in the United States.

– KKR Real Estate Finance Trust Inc ($NYSE:KREF)

KKR Real Estate Finance Trust Inc. is a real estate finance company that originates, acquires, and manages a diversified portfolio of commercial mortgage loans, commercial mortgage-backed securities, and other commercial real estate-related debt investments. The company has a market cap of $1.15 billion as of 2022.

– ACRES Commercial Realty Corp ($NYSE:ACR)

Acres Commercial Realty Corp is a company that owns and operates commercial real estate properties. The company has a market capitalization of $79.25 million as of 2022. Acres Commercial Realty Corp’s primary business is the ownership and operation of office buildings, retail centers, and warehouses. The company’s portfolio is located in the United States and Canada.

Summary

JMP recently downgraded Ares Commercial Real Estate’s (ACRE) stock from a “Market Outperform” to a “Market Perform” rating due to credit challenges. ACRE is a specialty finance company that focuses on providing financing solutions to middle market commercial real estate investors. In addition, the company has seen a decrease in originations and an increase in delinquencies, leading to higher losses and defaults. As a result, investors should be cautious when considering investing in ACRE as it faces ongoing credit challenges.