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Fundamental analysis: Apollo Commercial Real Estate Finance, Inc. (ARI)

Awarener score: 8.2

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: 4.5

• Business growth has been almost stagnant. It's been weak when measured against peer companies.
• Apollo Commercial Real Estate Finance, Inc. business shows some variation, there's some risk. It looks well ranked against rivals.

Margins score: 7.8

• ARI profit margins -on goods and services sold- are usually extremely poor. They stand slightly worse than rival companies.
• Business profit on sales tends to be hardly sufficient. It's substantially worse when measured against competitors.
• Profits on sales made -available to repay debt and purchase properties- are usually huge. They remain in a weak position 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 below average when measured against rivals.
• Total net profit tends to be huge when confronted to sales. Company stands below average when measured against comparable firms.

Growth score: 8.8

• Apollo Commercial Real Estate Finance, Inc. has an unknown gross margin growth, as there is not enough data to analyze. It's been impossible to compare to competitors.
• There is not sufficient data to estimate the operating income margin trend, which has been therefore unknown against comparable firms.
• Profits -available to repay debt and purchase properties- have been growing at a good pace, which compares almost average when measured against peer enterprises.
• Earnings -before income taxes and interests on loans taken- have been growing at a good tempo. It turns to be close to average when compared to similar stocks.
• In past years, profits -before income taxes- grew at an extremely fast speed. It was better than most rivals.
• In the previous years, growth trend on total net profit has been extremely high, and great when measured against peer companies.
• Earnings per share have grown at an extremely fast rhythm in past years. It's been in good shape compared to industry peers.

Miscellaneous score: 10.0

• ARI managed to get a credit on income taxes in the past years, even though it earned money. It's been better than most 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: 7.0

• Apollo Commercial Real Estate Finance, Inc. usually gets good returns on the resources it controls. It proves great when measured against peer firms.
• The company normally gets good proceeds -on the resources directly invested in the business-. They remain excellent in relation to similar companies.
• Profitability -in relation to owned resources- is usually quite good. It ranks great when measured against 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 great when measured against comparable enterprises.

Usage of Funds score: 5.0

• ARI usually uses a sparse portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is modest. It stands great when measured against rival firms.
• The company is usually not replacing property, plant, and equipment that gets old, instead using funds in something else. It can't keep forever, which is last-in-rank when measured against industry peers.
• In the past twelve months it paid outstanding dividends, considering the current stock price. It came slightly worse than competitors.
• In recent years, has cut back dividend payments. It could be traversing challenging times. The company has behaved in a weak position compared to similar firms.
• The company pays more dividends than genuine funds is usually able to generate, therefore borrowing more funds. Future payments may be at risk, especially if a downturn in business occurs. Sustainability looks mediocre against comparable companies.
• The company usually enlarges quite a bit the pool of investors, resulting in more mouths feeding on the pie of profits. It remains in good shape 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: 5.5

• Apollo Commercial Real Estate Finance, Inc. 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 lower short-term resources than short-term obligations. Unless it's part of the business model, there might be liquidity concerns. It turns to be a disappointment compared to similar firms.
• A very minor portion of resources controlled were provided for with financial debt. Financial strength is solid. Company could increase debt if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains mediocre against rival firms.
• Controlled resources might be only very slowly turned into cash and equivalents, which is riskier. It looks substantially worse when measured against rivals.
• For every dollar of short-term obligations, the company has few cents of cash and short-term receivables. It's a disappointment compared to peer firms.
• For every dollar of short-term obligations, the company has few cents of cash and equivalents, which is bottom tier against similar enterprises.
• Usually, sales are mostly on cash. It still ranks more than average in relation to peers.
• Days of inventory outstanding are not known. It comes up as a big question mark against competitors.
• We could not gauge the normal operating cycle of the company. It happens to be a mystery against peers.
• Unfortunately, we had not enough data to estimate the days of payables outstanding. It ranks unknown against industry peers.
• Cash conversion cycle remains unknown, due to not having enough inputs. It's incomparable against 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 good when measured against loans taken. Cutting back reinvesting in the business, it could take less than three years to repay the obligations with current profitability. It ranks almost average when measured against comparable enterprises.
• Fixed assets turnover remains undisclosed. It looks we cannot relate it to similar firms.
• Resources exploitation is virtually zero, as the firm hardly reports any sales. It's still slightly better than peer companies.

Valuation score: 8.2

• Apollo Commercial Real Estate Finance, Inc. looks very cheap in relation to profits and financial position. It happens to be encouraging in relation to 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 a slight improvement compared to peers.
• In the past twelve months, the company generated excellent free funds in relation to the stock price, which stands somewhat worse than similar companies.
• The company usually generates much 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 might be very interesting. It's still below average when measured against industry firms.
• In the past twelve months, the company has significantly rewarded investors, considering both dividends and share on the pie of earnings. It came up in good shape compared to peer ventures.
• The company is indebted, it should focus on loan repayment. It looks mediocre against similar enterprises.
• Considering the past twelve months, traditional Price-to-Earnings relation looks very cheap. Possible reasons are that the market might be betting current earnings will be hard to sustain through time, or that the company has very high fund needs, or a weak financial position, among others. If that isn't the case, the current stock price might be very attractive. It ranks great 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 rather normal in relation 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 better than peer firms.
• In the past twelve months, the operating business earned huge 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 rather normal in relation to peer companies.

Total score: 7.1

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Awarener score: 8.2

Conclusion

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