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Ares Commercial
(NYSE:ACRE)
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Rating:48Neutral
Price Target:
$3.50
â–¼(-24.41% Downside)
Action:Reiterated
Date:10/10/26
The score is held down primarily by below-average financial performance (ongoing losses, negative ROE, and meaningful leverage despite improving revenue and positive but weakening cash flow) and weak technicals (below key moving averages with negative MACD). These are partially offset by the very high dividend yield and a moderately constructive earnings call emphasizing liquidity, portfolio repositioning, and growth, though unresolved problem loans remain a key risk.
Positive Factors
Portfolio Growth
Rapid portfolio expansion and more than $900 million of recent commitments indicate continued origination capacity and borrower demand. A larger loan base can support recurring interest income and improve operating scale, provided underwriting and credit performance remain disciplined.
Negative Factors
Persistent Losses
Ongoing net losses and negative returns on equity show that stronger revenue has not yet translated into dependable shareholder profitability. Continued earnings volatility limits internal capital generation and makes sustainable performance dependent on improved asset outcomes and portfolio execution.
Read all positive and negative factors
Positive Factors
Negative Factors
Portfolio Growth
Rapid portfolio expansion and more than $900 million of recent commitments indicate continued origination capacity and borrower demand. A larger loan base can support recurring interest income and improve operating scale, provided underwriting and credit performance remain disciplined.
Read all positive factors
Ares Commercial (ACRE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$196.96M
Dividend Yield16.9%
Average Volume (3M)503.14K
Price to Earnings (P/E)―
Beta (1Y)0.89
Revenue Growth28.95%
EPS Growth76.08%
CountryUS
Employees4,250
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)-0.08
Shares Outstanding55,481,113
10 Day Avg. Volume764,230
30 Day Avg. Volume503,136
Financial Highlights & Ratios
PEG Ratio2.99
Price to Book (P/B)0.51
Price to Sales (P/S)3.07
P/FCF Ratio13.30
Enterprise Value/Market Cap7.40
Enterprise Value/Revenue14.82
Enterprise Value/Gross Profit20.69
Enterprise Value/Ebitda28.66
Forecast
1Y Price Target
$5.17Price Target Upside11.59% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)0.22
Revenue Forecast (FY)$49.52M
Ares Commercial Business Overview & Revenue Model
Company Description
Ares Commercial Real Estate Corporation (ACRE) functions as a specialized financial institution, primarily engaged in developing and investing in a diverse portfolio of commercial real estate (CRE) debt and associated investments throughout the Un...
How the Company Makes Money
ACRE primarily makes money by earning net interest income on its commercial real estate debt portfolio. It originates and holds floating-rate and fixed-rate loans (commonly senior mortgages) and earns interest from borrowers; its core earnings are...
Ares Commercial Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call highlighted material progress: meaningful portfolio growth (36% YoY), significant new originations ($900M in the past 12 months), reduced office concentration (from 39% to <25%), stable CECL reserves (~8% of loan principal) and strong liquidity ($106M), along with a maintained dividend and a $50M repurchase authorization. Offsetting these positives are four remaining risk-rated 4/5 loans (including a large Chicago nonaccrual loan), more than $150M of carrying value not accruing interest, and uncertain, asset-specific timelines for resolution. On balance, the company appears to have more substantive actionable positives (growth, diversification, liquidity, and conservative reserves) than unresolved negatives, though successful near-term resolutions will be key to realizing upside.Positive Updates
Strong Portfolio Growth
Loans held for investment reached $1.8 billion as of June 30, 2026, up $129 million quarter-over-quarter and $484 million year-over-year (management reports a 36% YoY increase in outstanding principal).
Negative Updates
Remaining Risk-Rated 4 and 5 Loans
Four loans remain risk rated 4 or 5, including a large Chicago office loan on nonaccrual (but making contractual interest payments) and a Brooklyn residential condo on nonaccrual; these assets constrain capital until resolved.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Portfolio Growth
Loans held for investment reached $1.8 billion as of June 30, 2026, up $129 million quarter-over-quarter and $484 million year-over-year (management reports a 36% YoY increase in outstanding principal).
Read all positive updates
Company Guidance
Management guided that repayments and successful asset resolutions will continue to drive portfolio repositioning and earnings growth, reiterating a Q3 regular cash dividend of $0.15 per share (payable Oct 15, record Sep 30) — an approximate 14% annualized yield at the July 30 stock price — and a longer‑term ROE target of about 9–10%; new originations are delivering gross levered returns in the low double digits. They emphasized balance‑sheet flexibility with available capital of $106M, liquidity over $100M, net debt‑to‑equity (ex‑CECL) of 2.0x, and a reauthorized $50M share repurchase program through July 31, 2027. Portfolio metrics supporting the outlook include $1.8B of loans held for investment (up $129M QoQ and $484M YoY), >$900M of new loan commitments in the past 12 months (loans from the past 12 months now ~42% of the portfolio), office loans down to $442M (<25% of portfolio vs. 39% at Q2 2025), total CECL reserve of $139M (~8% of outstanding principal; ~$130M or 94% against risk‑rated 4/5 loans; reserves on 4/5 loans ≈34% of their principal), more than $150M carrying value of loans net of CECL not accruing interest, a stable book value of $8.82 per share, and an expectation that H2 repayment activity and selective redeployments will fund growth while the four remaining risk‑rated 4/5 loans are resolved.Ares Commercial Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
45
Neutral
Cash Flow
50
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 98.38M | 85.35M | 69.65M | 92.93M | 109.05M | 106.05M |
| Gross Profit | 70.45M | 48.95M | 69.65M | 92.93M | 109.05M | 87.49M |
| EBITDA | 50.86M | 70.26M | 37.13M | 1.02M | 7.10M | 825.00K |
| Net Income | -4.43M | -902.00K | -35.03M | -38.87M | 29.79M | 60.46M |
Balance Sheet | ||||||
| Total Assets | 1.82B | 1.62B | 1.75B | 2.28B | 2.52B | 2.63B |
| Cash, Cash Equivalents and Short-Term Investments | 17.56M | 29.29M | 63.80M | 138.52M | 169.21M | 50.62M |
| Total Debt | 1.26B | 1.05B | 1.17B | 1.62B | 1.74B | 1.90B |
| Total Liabilities | 1.33B | 1.11B | 1.21B | 1.65B | 1.78B | 1.95B |
| Stockholders Equity | 489.23M | 509.57M | 540.13M | 625.85M | 747.54M | 678.63M |
Cash Flow | ||||||
| Free Cash Flow | 13.21M | 19.72M | 35.55M | 46.79M | 57.16M | 48.21M |
| Operating Cash Flow | 15.40M | 21.35M | 35.55M | 46.79M | 57.16M | 48.35M |
| Investing Cash Flow | -388.13M | 148.14M | 427.91M | 127.46M | 193.17M | -699.68M |
| Financing Cash Flow | 337.17M | -168.63M | -507.63M | -205.07M | -159.67M | 627.17M |
Ares Commercial Technical Analysis
Negative
4.63
Price Trends
4.25
Negative
4.33
Negative
4.46
Negative
Market Momentum
-0.18
Positive
22.79
Positive
8.25
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACRE, the sentiment is Negative. The current price of 4.63 is above the 20-day moving average (MA) of 3.97, above the 50-day MA of 4.25, and above the 200-day MA of 4.46, indicating a bearish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 22.79 is Positive, neither overbought nor oversold. The STOCH value of 8.25 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACRE.
Ares Commercial Risk Analysis
Ares Commercial disclosed 103 risk factors in its most recent earnings report. Ares Commercial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ares Commercial Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $241.35M | 6.78 | 9.62% | 19.96% | -2.58% | -25.73% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
62 Neutral | $289.88M | 4.30 | 18.36% | 13.00% | 1.61% | 14.36% | |
61 Neutral | $179.05M | 7.61 | 7.95% | 16.87% | 17.78% | -15.05% | |
55 Neutral | $168.54M | 9.19 | 7.31% | 17.63% | 25.55% | -50.15% | |
48 Neutral | $196.96M | -47.14 | -0.88% | 16.90% | 28.95% | 76.08% | |
44 Neutral | $140.58M | -9.68 | 3.31% | 8.11% | -2.62% | -7470.75% |
* Real Estate Sector Average
ACRE
Ares Commercial
3.55
-0.35
-9.07%
ACR
ACRES Commercial Realty
10.45
-10.08
-49.10%
MITT
AG Mortgage
5.63
-0.58
-9.37%
NREF
NexPoint Real Estate ate Finance
15.38
3.53
29.76%
AOMR
Angel Oak Mortgage
7.26
-0.59
-7.52%
REFI
Chicago Atlantic Real Estate ate Finance Inc
9.42
-0.96
-9.27%
Ares Commercial Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Ares Commercial Adjusts Repurchase Facility Net Worth Covenants
Positive
Oct 9, 2026
On October 5, 2026, Ares Commercial Real Estate Corporation amended its master repurchase facilities with Citibank, Morgan Stanley Bank and Wells Fargo Bank, lowering the minimum tangible net worth requirement from $500 million to $400 million. Th...
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Ares Commercial Sells North Carolina Office Complex Asset
Positive
Sep 22, 2026
Ares Commercial Real Estate Corporation operates in the commercial real estate finance industry, primarily investing in and managing a portfolio of loans and real estate assets tied to office and other income-producing properties. The company focu...
Business Operations and StrategyDividendsFinancial DisclosuresRegulatory Filings and Compliance
Ares Commercial Q2 2026 Results and Dividend Update
Positive
Aug 4, 2026
On August 4, 2026, Ares Commercial Real Estate Corporation reported second quarter 2026 GAAP net income of $4.4 million, or $0.08 per diluted share, and Distributable Earnings of $6.9 million, or $0.12 per diluted share, reflecting ongoing efforts...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.