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Fundamental analysis: Ares Commercial Real Estate Corporation (ACRE)

Awarener score: 7.2

Conclusion

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.0

• Business has been growing at a very good pace. It's been more than average in relation to peer companies.
• Ares Commercial Real Estate Corporation business shows some variation, there's some risk. It looks well ranked against rivals.

Margins score: 9.7

• ACRE profit margins -on goods and services sold- are usually excellent. They stand better than most rival companies.
• Business profit on sales tends to be excellent. It's below average when measured against competitors.
• Profits on sales made -available to repay debt and purchase properties- are usually huge. They remain close to average when compared to peers.
• Earnings -before income taxes and interests on loans taken- tend to be huge in relation to total revenues. They're still somewhat worse than similar companies.
• Profits -before income taxes- are usually huge considering total sales, and remain substantially worse when measured against rivals.
• Total net profit tends to be huge when confronted to sales. Company stands substantially worse when measured against comparable firms.

Growth score: 5.0

• Ares Commercial Real Estate Corporation profit -on goods and services sold- has been shrinking. It's been in a very weak position compared to competitors.
• In recent years, earnings -on operations- have been shrinking, which has been worse than most comparable firms.
• Profits -available to repay debt and purchase properties- tended to shrink, which compares substantially worse when measured against peer enterprises.
• Earnings -before income taxes and interests on loans taken- tended to shrink. It turns to be in a very weak position compared to similar stocks.
• In past years, profits -before income taxes- grew at an excellent speed. It was slightly better than rivals.
• In the previous years, growth trend on total net profit has been excellent, and similar to peer companies.
• Earnings per share have grown at an excellent rhythm in past years. It's been a slight improvement compared to industry peers.

Miscellaneous score: 9.0

• ACRE managed to pay no income taxes on profits made in the past years, sometimes even got a credit. It's been slightly better than peers.
• The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
• We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 6.5

• Ares Commercial Real Estate Corporation usually gets good returns on the resources it controls. It proves encouraging in relation to peer firms.
• The company normally gets sufficient proceeds -on the resources directly invested in the business-. They remain close to average when compared to similar companies.
• There's usually some profitability -in relation to owned resources-. It ranks encouraging in relation to competitors.
• In the past, got good returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's similar to comparable enterprises.

Usage of Funds score: 5.1

• ACRE usually uses almost no genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is non-significant. It stands similar to rival firms.
• The company is usually replacing part of the property, plant, and equipment that gets old, keeping some funds for something else. It can't keep forever, which is more than average in relation to industry peers.
• In the past twelve months it paid outstanding dividends, considering the current stock price. It came somewhat worse than competitors.
• In recent years, has greatly cut back dividend payments. It could be enduring difficult times. The company has behaved in a weak position compared to similar firms.
• The company usually uses a portion of genuine funds generated to pay dividends. Dividend payments should be safe, unless business prospects are challenged. Sustainability looks somewhat worse than comparable companies.
• The company has greatly enlarged the pool of investors in previous years, resulting in more mouths feeding on the pie of profits. It remains a disappointment compared to peer enterprises.
• Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands rather normal in relation to rivals.
• We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against competitors.

Balance Sheet score: 5.2

• Ares Commercial Real Estate Corporation has no intangible assets (like brands and goodwill) according to accounting books, which is safest. It happens to be top tier when measured against peer companies.
• The company has more than enough short-term resources to face short-term obligations. Liquidity concerns are non-significant. It turns to be close to average when compared to similar firms.
• Very few resources controlled were provided for with financial debt. Financial strength is very solid. Company could increase debt if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains somewhat worse than rival firms.
• Controlled resources might be only very slowly turned into cash and equivalents, which is riskier. It looks almost average when measured against rivals.
• For every dollar of short-term obligations, the company has abundant dollars in cash and short-term receivables. It's close to average when compared to peer firms.
• For every dollar of short-term obligations, the company has enough dollars in cash and equivalents, which is somewhat worse than similar enterprises.
• Usually, sales are on many months credit. It still ranks substantially worse when measured against peers.
• Normally has no inventories. It comes up as impressive in relation to competitors.
• On average, it takes plenty of months from the purchase to charging customers. It happens to be worse than most peers.
• Pays suppliers mostly in cash. It ranks last-in-rank when measured against industry peers.
• The company pays its suppliers plenty of months before charging its customers, so there's a lot of money invested in working capital. It's a disappointment compared to similar companies.
• Company earns net interest income on its investments and therefore is in a quite comfortable financial position. It stands top-notch against rival firms.
• Business earnings have usually been excellent when measured against loans taken. It could take less than two years to repay the obligations with current profitability. It ranks more than average in relation to comparable enterprises.
• Fixed assets turnover remains undisclosed. It looks we cannot relate it to similar firms.
• Resource exploitation is very low when yearly sales are considered, business volume must be greatly increased. This metric is normally tied to the industry where the firm belongs. It's still well ranked against peer companies.

Valuation score: 6.7

• Ares Commercial Real Estate Corporation looks heavily expensive in relation to profits and financial position. It happens to be below average when measured against competitors.
• Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains close to average when compared to peers.
• In the past twelve months, the company generated extraordinary free funds in relation to the stock price, which stands better than most similar companies.
• The company usually generates plenty more genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share looks to be very attractive. It's still almost average when measured against industry firms.
• In the past twelve months, the company has greatly enlarged the pool of investors by issuing new shares. Future profits need to be high enough to justify the measure, as the pie of earnings will now be split among plenty more stockholders. It came up a disappointment compared to peer ventures.
• The company has substantial more cash than debt. It might be poised to increase stockholder payments, or to fund new business projects. It looks slightly worse than similar enterprises.
• Considering the past twelve months, traditional Price-to-Earnings relation is huge, as profits were extremely low in relative terms. It ranks substantially worse when measured against peer companies.
• Comparing the current stock price with the past twelve-months revenues gives a very high relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks lacking compared to rival firms.
• The stock price is at or below the accounting book value. Unless profitability is really low, the stock may be selling a t a discount. Pay attention to the other key indicators for hints. The company remains somewhat worse than peer firms.
• In the past twelve months, the operating business earned great money when compared to the current stock price and financial position. It happens to be more than average in relation to industry peers.
• In an alternate metric of bang for the buck, the company has usually shown an extreme earnings power ability when measured against the current stock price and financial position. Further analysis is recommended, as the stock might currently be significantly undervalued. It's still a slight improvement compared to peer companies.

Total score: 6.7

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Awarener score: 7.2

Conclusion

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