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Arbor Realty Trust (ABR)
NYSE:ABR
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Arbor Realty
(NYSE:ABR)
70Outperform
Positive Factors
Stock price resilience
Stock price downside from current levels is somewhat limited given both ABR and management have purchased stock below book value in the past, and it is believed this would occur again if shares trade at a material discount to book value.
Total return potential
Investors could realize a potential total return of approximately 36%, including an 11.0% cash yield, if the price target and dividend projections are achieved.
Negative Factors
Earnings pressure
The increase in interest rates and the higher-for-longer rate outlook has created headwinds for ABR’s business, such as the need for additional loan modifications to manage through problem loans, lower new originations, lower agency volumes, and increasing REO activity, which will be a drag on earnings over the next 12-24 months.
Interest rate impact
Elevated interest rates are expected to be a significant headwind for commercial real estate investors and borrowers, impacting Arbor Realty Trust's earnings.
Arbor Realty (ABR) vs. S&P 500 (SPY)
Market Cap
$2.10B
Dividend Yield15.52%
Average Volume (3M)3.82M
Price to Earnings (P/E)9.4
Beta (1Y)0.88
Revenue Growth-11.26%
EPS Growth-33.80%
CountryUS
Employees659
SectorReal Estate
Sector Strength86
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)1.14
Shares Outstanding189,505,420
10 Day Avg. Volume3,708,810
30 Day Avg. Volume3,821,471
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.71
Price to Cash Flow (P/CF)12.50
P/FCF Ratio3.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$12.75Price Target Upside22.13% Upside
Rating ConsensusHold
Number of Analyst Covering4
Arbor Realty Business Overview & Revenue Model
Company DescriptionArbor Realty Trust, Inc. (ABR) is a specialized real estate investment trust (REIT) that provides a wide range of financial products and services to the multifamily and commercial real estate sectors. The company's core offerings include structured finance solutions, bridge loans, mezzanine financing, and preferred equity services tailored to meet the needs of real estate owners, operators, and developers. Arbor Realty Trust is committed to delivering innovative and flexible financial solutions to its clients across the United States.
How the Company Makes MoneyArbor Realty Trust primarily makes money through interest income generated from its loan portfolio, which includes a variety of structured finance products such as bridge loans and mezzanine financing. Additionally, the company earns revenue through servicing and managing loans, which provides a steady stream of fee income. Arbor also profits from equity investments and gains from the sale of loans. The company's strong relationships with government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac, as well as its partnerships with various banks and financial institutions, further support its revenue generation by expanding its lending capacity and market reach.
Arbor Realty Financial Statement Overview
Summary
Arbor Realty's financial performance is mixed. While the company has maintained profitability and improved its balance sheet with reduced leverage, it faces challenges such as a negative gross profit margin. Cash flow generation remains strong, which supports financial flexibility and debt reduction efforts.Income Statement
Arbor Realty's income statement shows some volatility, with recent total revenue decreasing compared to the previous year. The gross profit margin has turned negative in the latest year, indicating potential cost management issues. However, the company has maintained positive net income. Despite the decrease in EBIT and EBITDA margins, the company continues to generate earnings, which is a positive sign.68
Positive
Balance Sheet
The balance sheet is relatively strong, with a significant increase in equity over the years. The debt-to-equity ratio has decreased, showing improved leverage management. The equity ratio has improved, indicating a stronger financial position. The company's substantial cash and cash equivalents also provide liquidity to manage liabilities.75
Positive
Cash Flow
Cash flow metrics demonstrate positive trends, with a significant increase in operating cash flow. The free cash flow has grown, contributing to the company's ability to reinvest and reduce debt. The operating cash flow to net income ratio is healthy, indicating efficient cash generation relative to net income.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 625.94M | 721.01M | 619.06M | 590.92M | 434.13M | Gross Profit |
| 625.94M | 721.01M | 619.06M | 590.92M | 434.13M | EBIT |
| 297.40M | 427.90M | 371.31M | 424.09M | 236.55M | EBITDA |
| 375.37M | 500.74M | 439.92M | 489.92M | 293.41M | Net Income Common Stockholders |
| 264.64M | 371.43M | 325.78M | 339.30M | 170.95M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 503.80M | 935.52M | 14.79M | 404.58M | 339.53M | Total Assets |
| 13.49B | 15.74B | 17.04B | 15.07B | 7.66B | Total Debt |
| 285.85M | 9.40B | 13.50B | 12.06B | 5.82B | Net Debt |
| -217.95M | 8.47B | 12.97B | 11.65B | 5.49B | Total Liabilities |
| 10.34B | 12.48B | 13.97B | 12.52B | 6.18B | Stockholders Equity |
| 3.02B | 3.12B | 2.94B | 2.42B | 1.34B |
| Cash Flow | Free Cash Flow | |||
| 461.52M | 235.86M | 1.10B | 216.85M | 55.16M | Operating Cash Flow |
| 461.52M | 235.86M | 1.10B | 216.85M | 55.16M | Investing Cash Flow |
| 1.15B | 1.88B | -2.32B | -6.75B | -1.16B | Financing Cash Flow |
| -2.49B | -1.83B | 1.57B | 6.89B | 1.13B |
Arbor Realty Technical Analysis
Negative
10.44
Price Trends
12.22
Negative
12.87
Negative
13.07
Negative
Market Momentum
-0.15
Positive
42.20
Neutral
28.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ABR, the sentiment is Negative. The current price of 10.44 is below the 20-day moving average (MA) of 11.73, below the 50-day MA of 12.22, and below the 200-day MA of 13.07, indicating a bearish trend. The MACD of -0.15 indicates Positive momentum. The RSI at 42.20 is Neutral, neither overbought nor oversold. The STOCH value of 28.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ABR.
Arbor Realty Risk Analysis
Arbor Realty disclosed 71 risk factors in its most recent earnings report. Arbor Realty 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
Arbor Realty Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $2.10B | 9.39 | 8.62% | 15.52% | -11.26% | -33.80% | |
68 Neutral | $1.16B | 9.80 | 8.24% | 11.93% | -16.66% | -23.98% | |
68 Neutral | $1.33B | 12.20 | 7.06% | 8.76% | -5.09% | 6.25% | |
61 Neutral | $4.30B | 16.20 | -3.61% | 11.22% | 6.29% | -21.37% | |
60 Neutral | $3.14B | ― | -5.01% | 11.09% | -12.86% | -182.05% | |
49 Neutral | $1.19B | ― | -6.02% | 12.85% | -9.71% | -426.57% | |
45 Neutral | $1.20B | 8.01 | -1.09% | 19.14% | -46.65% | 76.86% |
* Real Estate Sector Average
Performance Comparison
ABR
Arbor Realty
10.44
-0.32
-2.97%
ARI
Apollo Real Estate
8.21
-1.35
-14.12%
ARR
ARMOUR Residential REIT
14.15
-1.92
-11.95%
BXMT
Blackstone Mortgage
17.40
0.70
4.19%
PMT
PennyMac Mortgage
12.62
0.20
1.61%
LADR
Ladder Capital
9.99
0.30
3.10%
Arbor Realty Earnings Call Summary
Earnings Call Date: Feb 21, 2025 | % Change Since: -21.86% | Next Earnings Date: May 2, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company that has managed to execute its business plan effectively despite a challenging rate environment, with notable achievements in dividend growth and loan modifications. However, significant headwinds from elevated interest rates and non-performing loans have led to a cautious earnings outlook for 2025.Highlights
Strong Dividend Performance
Arbor Realty Trust was the only firm in its peer group to grow its dividend over the last five years by 43%, while other companies in the space cut their dividends by an average of 40%.
Loan Modification Success
In 2024, Arbor Realty Trust successfully modified $4.1 billion of loans, with borrowers committing to inject $130 million of additional capital into their deals.
Bridge Loan and Single-Family Rental Growth
The company originated $370 million of new bridge loans and $1.7 billion in single-family rental loans in 2024, showing strong growth in these segments.
Book Value Growth
Arbor Realty Trust grew its book value by 26% over the last five years, compared to a 25% erosion experienced by peers.
Lowlights
Interest Rate Challenges
Elevated interest rates have created significant headwinds, affecting agency origination volumes and leading to a revised earnings outlook for 2025.
Earnings Drag from Non-Performing Loans
Arbor Realty Trust is experiencing a temporary drag on earnings from REO assets that need repositioning, with $819 million in delinquencies at the end of 2024.
Reduced Earnings on Cash and Escrow Balances
A 100 basis point decrease in SOFR has reduced earnings on cash and escrow balances, impacting 2025 earnings by an estimated $35 million to $40 million.
Legal and Consulting Fees Impact
Elevated legal and consulting fees due to short-seller reports are expected to continue, impacting earnings by $0.03 to $0.05 per share.
Company Guidance
In the Arbor Realty Trust earnings call for the fourth quarter and full year 2024, guidance was provided regarding the company's future performance amidst a challenging economic environment. The company reported strong results for 2024, with distributable earnings of $81.6 million or $0.40 per share in the fourth quarter, translating to ROEs of approximately 14%. However, due to a volatile interest rate environment, with the ten-year rate rising from 3.6% in September to as high as 4.80% in January, the company revised its earnings outlook for 2025 to an estimated range of $0.30 to $0.35 per quarter. This revision reflects anticipated headwinds from elevated rates impacting agency origination volumes and a decrease in SOFR, which has reduced earnings on escrows and cash balances. Despite these challenges, Arbor Realty Trust remains well-capitalized and focused on growth areas like bridge loans and their single-family rental business, while also planning to reset dividends in line with new earnings guidance. The company highlighted its ability to outperform peers in dividend growth, shareholder return, and book value preservation over the past five years.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.