NexPoint Real Estate ate Finance (NREF) AI Stock Analysis

• Market Cap: $268.01M
• Dividend Yield: 13.17%
• Average Volume (3M): 42.89K
• Price to Earnings (P/E): 14.9
• Beta (1Y): 0.70
• Revenue Growth: 11.78%
• EPS Growth: 65.73%
• Country: US
• Employees: 1
• Sector: Real Estate
• Sector Strength: 69
• Industry: REIT - Mortgage
• EPS (TTM): 0.74
• Shares Outstanding: 17,643,526
• 10 Day Avg. Volume: 52,299
• 30 Day Avg. Volume: 42,886
• PEG Ratio: 0.23
• Price to Book (P/B): N/A
• Price to Sales (P/S): 10.97
• Price to Cash Flow (P/CF): 4.70
• P/FCF Ratio: 4.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $15.50
• Price Target Upside: 2.04% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

NexPoint Real Estate Finance scores 54, reflecting a balance between strengths and weaknesses. Financial performance shows mixed stability with high leverage typical for a REIT, but it carries risks. Technical analysis indicates weak momentum. The stock is attractively valued for income investors due to its high dividend yield. The earnings call highlights growth prospects, despite some concerns over net income and portfolio delinquency.

Positive Factors

Dividend yield

Shares of NREF are now trading at 0.97x P/BV with a 12.3% dividend yield, which is higher than the median dividend yield of its peer group.

Financial performance

NexPoint reported GAAP EPS of $0.43 and earnings available for distribution of $0.83 per share, providing strong coverage of the quarterly dividend.

Negative Factors

Loan delinquency

Delinquency on two Freddie Mac K series loans increased and the company granted short-term forbearance to help facilitate a payoff.

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 robust revenue growth and operational efficiency, reflected in high EBIT and EBITDA margins. However, the volatility in net income and high financial leverage pose significant risks. The balance sheet shows high reliance on debt, and while cash generation is strong, declining free cash flow may impact future financial flexibility.

Income Statement

NexPoint Real Estate Finance has shown a significant revenue growth from $13.5M in 2022 to $120.8M TTM. Gross Profit Margin stood strong at 92.5% TTM, reflecting efficient cost management. However, the net income shows volatility, decreasing from $57.7M in 2022 to $29.6M TTM. EBIT and EBITDA margins are also impressive at 88.45% and 61.88% TTM, respectively, indicating strong operational efficiency.

Balance Sheet

The company's financial leverage is high with a Debt-to-Equity Ratio of 14.57 TTM, indicating potential risk if revenue does not continue to grow. The Equity Ratio is low at 5.91%, suggesting a high reliance on debt for financing. Return on Equity has dropped significantly from 15.04% in 2022 to 8.81% TTM, reflecting decreased profitability relative to shareholders' equity.

Cash Flow

Free Cash Flow has decreased from $31.6M in 2023 to $26.2M TTM, though Operating Cash Flow to Net Income Ratio is healthy at 0.95 TTM, suggesting strong cash generation relative to net income. However, Free Cash Flow to Net Income Ratio is relatively low at 0.89 TTM, indicating limited free cash flow relative to net income.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2018
Income Statement		Total Revenue
120.79M	42.09M	13.52M	44.55M	19.49M	34.27M
	Gross Profit
111.72M	42.09M	2.12M	37.08M	13.63M	23.19M
	EBIT
106.85M	25.42M	20.84M	43.09M	12.85M	19.39M
	EBITDA
74.71M	0.00	11.55M	43.09M	12.85M	19.39M
	Net Income Common Stockholders
29.60M	13.97M	57.70M	43.09M	12.85M	19.39M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
197.00K	13.82M	256.15M	26.46M	30.24M	10.82M
	Total Assets
2.72B	7.02B	8.15B	8.51B	6.18B	2.02B
	Total Debt
2.40B	6.56B	7.26B	7.71B	5.61B	1.78B
	Net Debt
2.40B	6.54B	7.24B	7.69B	5.58B	1.77B
	Total Liabilities
2.40B	6.57B	7.61B	8.25B	5.77B	1.78B
	Stockholders Equity
83.10M	347.34M	383.98M	28.48M	128.24M	―
Cash Flow		Free Cash Flow
26.24M	31.56M	65.80M	79.09M	21.12M	0.00
	Operating Cash Flow
28.05M	31.56M	65.80M	49.30M	32.90M	0.00
	Investing Cash Flow
837.79M	741.34M	950.58M	517.88M	-68.26M	0.00
	Financing Cash Flow
-840.06M	-776.60M	-1.03B	-567.41M	68.83M	0.00

NexPoint Real Estate ate Finance Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 15.19
• 50DMA: Negative
• 100DMA: Negative
• 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 15.19 is below the 20-day moving average (MA) of 15.66, below the 50-day MA of 15.33, and above the 200-day MA of 14.57, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 41.95 is Neutral, neither overbought nor oversold. The STOCH value of 30.17 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
ABR	70 Outperform	$2.23B	9.97	8.62%	14.63%	-11.26%	-33.80%
STWD	69 Neutral	$6.70B	18.04	5.55%	9.67%	-0.97%	3.75%
LADR	68 Neutral	$1.46B	13.34	7.06%	8.01%	-5.09%	6.25%
ARI	61 Neutral	$1.34B	―	-6.02%	12.42%	-9.71%	-426.57%
Sector *	61 Neutral	$4.71B	17.72	-2.95%	11.43%	6.02%	-21.34%
BXMT	60 Neutral	$3.41B	―	-5.01%	10.98%	-12.86%	-182.05%
NREF	54 Neutral	$268.01M	14.94	8.58%	13.17%	11.78%	65.73%

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.