Gold prices just lower; monthly gains on track
In a challenging economic climate, Ares Commercial Real Estate Corp (NYSE:ACRE) stock has reached a 52-week low, dipping to $4.82. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 4.21, while offering investors a substantial 12.35% dividend yield, having maintained consistent dividend payments for 14 consecutive years. This latest price level reflects a significant downturn for the company, which has experienced a 1-year change with a decrease of -32.87%. Investors are closely monitoring ACRE as it navigates through the headwinds of a volatile real estate market and broader financial pressures that have impacted its stock performance over the past year. The company’s ability to rebound from this low will be watched with keen interest by market participants looking for signs of recovery or further decline. InvestingPro analysis suggests the stock is currently trading below its Fair Value, with technical indicators showing oversold conditions. Discover 12 more exclusive InvestingPro Tips and comprehensive analysis in the Pro Research Report, available with an InvestingPro subscription.
In other recent news, Ares Commercial Real Estate reported a challenging fourth quarter for 2024, with a net loss of $10.7 million and earnings per share (EPS) of -$0.20, missing analysts’ expectations of $0.06. Despite the earnings miss, the company exceeded revenue forecasts, bringing in $17.51 million compared to the anticipated $16.36 million. The firm also managed to reduce its net debt to equity ratio by 16% year-over-year, reflecting a strategic focus on improving its balance sheet. Analyst Jade Rahmani from Keefe, Bruyette & Woods adjusted the price target for Ares Commercial to $5.50 from $6.00, maintaining a Market Perform rating due to ongoing challenges in the commercial real estate credit sector.
Rahmani highlighted the company’s focus on addressing high-risk loans and enhancing liquidity as immediate priorities. The analyst noted that Ares Commercial’s shares appear attractive, trading at 0.54 times book value, which is below the peer average of 0.76 times. The company’s management emphasized their efforts to reduce risk-rated loans and improve book value, with potential collateralized loan obligation (CLO) issuances between $500 million to $1 billion in 2025. CEO Brian Donahoe pointed out the company’s improved balance sheet and the competitive pricing from warehouse lenders, which could benefit financing costs.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.