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On Friday, JMP Securities analysts maintained their Market Outperform rating and a $22.00 price target on Acres Commercial Realty Corp (NYSE:ACR), following the company’s first-quarter financial results for 2025. The stock, currently trading at $18.62 with a market capitalization of $128 million, appears undervalued according to InvestingPro analysis. The company has demonstrated strong momentum with a 43% return over the past year. Acres Commercial Realty reported a GAAP loss of $0.80 per share and an earnings available for distribution (EAD) loss of $0.86 per share for the quarter ending March 31, 2025.
The reported losses included a $700,000, or $0.10 per share, realized loss from the sale of a loan backed by a hotel property, as well as a $1.5 million, or $0.20 per share, acceleration of unamortized debt costs due to the redemption of two collateralized loan obligations (CLOs). Additionally, the company experienced a $0.41 per share decrease in net interest income compared to the fourth quarter of 2024, attributed to lower SOFR rates and a reduced loan portfolio.
Acres Commercial Realty’s GAAP book value decreased by 1.3% to $28.50 per share from $28.87 at the end of December 2024. Despite the decrease, the company’s common stock repurchase of approximately $4.4 million during the quarter contributed to an increase in book value by $0.28 per share. InvestingPro data shows the stock trading at just 0.29 times book value, significantly below typical industry valuations. This aggressive share buyback program is one of several bullish signals identified by InvestingPro analysts.
JMP Securities highlighted that Acres Commercial Realty’s current tax loss utilization strategy does not yield a quarterly dividend for investors at the moment. However, they believe that the use of tax loss carryforwards and the associated growth in book value could present a compelling opportunity for long-term price appreciation.
The company conducted its earnings conference call on Thursday, and a replay of the call has been made available. Interested parties can access the replay by dialing (844) 512-2921 and using the passcode 11158543. JMP Securities stated that they would update their working model and EAD estimates after reviewing Acres Commercial Realty’s Form 10-Q. For investors seeking deeper insights, InvestingPro offers a comprehensive research report on ACR, including detailed financial health analysis (currently rated as GOOD) and additional exclusive ProTips that could help inform investment decisions.
In other recent news, Acres Commercial Realty Corp reported a challenging first quarter of 2025, with financial results falling short of expectations. The company posted an earnings per share (EPS) loss of $0.80, significantly below the anticipated EPS of $0.33. Revenue also missed forecasts, coming in at $17 million compared to the expected $21.84 million. Despite these setbacks, Acres Commercial Realty secured a new $940 million financing facility with JPMorgan, which includes a two-year reinvestment period. The company plans to grow its portfolio by $300-500 million by the end of the year. Analysts from Jones Trading and Citizens Capital Markets noted the company’s active deal pipeline and the potential for future growth despite current market volatility. However, the broader economic environment and interest rate fluctuations remain challenges for the company. Additionally, Acres Commercial Realty is optimistic about the future, with plans to ramp up securitization in the second half of the year.
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