Apollo Commercial Real Estate Finance, Inc.
Apollo Commercial Real Estate Finance, Inc. Fundamental Analysis
Apollo Commercial Real Estate Finance, Inc. (ARI) shows moderate financial fundamentals with a PE ratio of 11.66, profit margin of 17.51%, and ROE of 6.83%. The company generates $0.7B in annual revenue with weak year-over-year growth of -9.71%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 11.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ARI's fundamental strength across five key dimensions:
Efficiency Score
WeakARI struggles to generate sufficient returns from assets.
Valuation Score
ExcellentARI trades at attractive valuation levels.
Growth Score
WeakARI faces weak or negative growth trends.
Financial Health Score
WeakARI carries high financial risk with limited liquidity.
Profitability Score
ModerateARI maintains healthy but balanced margins.
Key Financial Metrics
Is ARI Expensive or Cheap?
P/E Ratio
ARI trades at 11.66 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, ARI's PEG of -1.15 indicates potential undervaluation.
Price to Book
The market values Apollo Commercial Real Estate Finance, Inc. at 0.80 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -32.40 times EBITDA. This is generally considered low.
How Well Does ARI Make Money?
Net Profit Margin
For every $100 in sales, Apollo Commercial Real Estate Finance, Inc. keeps $17.51 as profit after all expenses.
Operating Margin
Core operations generate 48.73 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $6.83 in profit for every $100 of shareholder equity.
ROA
Apollo Commercial Real Estate Finance, Inc. generates $1.28 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Apollo Commercial Real Estate Finance, Inc. produces operating cash flow of $143.27M, showing steady but balanced cash generation.
Free Cash Flow
Apollo Commercial Real Estate Finance, Inc. generates strong free cash flow of $143.27M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.03 in free cash annually.
FCF Yield
ARI converts 9.62% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
11.66
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.15
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.80
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.05
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
4.27
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.03
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.07
vs 25 benchmark
ROA
Return on assets percentage
0.01
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How ARI Stacks Against Its Sector Peers
| Metric | ARI Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 11.66 | 24.23 | Better (Cheaper) |
| ROE | 6.83% | 659.00% | Weak |
| Net Margin | 17.51% | 4497.00% | Weak |
| Debt/Equity | 4.27 | -22.14 (disorted) | Distorted |
| Current Ratio | 0.03 | 13.87 | Weak Liquidity |
| ROA | 1.28% | -1390.00% (disorted) | Weak |
ARI outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Apollo Commercial Real Estate Finance, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
134.20%
Industry Style: Income, Inflation Hedge, REIT
High GrowthEPS CAGR
-154.66%
Industry Style: Income, Inflation Hedge, REIT
DecliningFCF CAGR
-22.98%
Industry Style: Income, Inflation Hedge, REIT
Declining