Ares Commercial Q4 net income misses analyst expectations

Overview

• Specialty finance firm's Q4 net income missed analyst expectations

• Pretax profit for Q4 beat analyst estimates

• Company closed $150 mln in new loan commitments post-year end

Outlook

• Company aims to reposition portfolio for earnings growth in 2026

• Company continues to optimize financing structure for future growth

Result Drivers

• STRATEGIC GOALS - Co focused on addressing risk-rated loans and reducing office and REO properties, which allowed a return to investing, per CEO Bryan Donohoe

• LOAN REPAYMENTS - Co collected $572 mln in loan repayments, enhancing balance sheet flexibility for asset resolutions and new investments, per CFO Jeff Gonzales

• FINANCING STRUCTURE - Co optimized financing by increasing availability and reducing borrowing costs to support growth objectives

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 5 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the specialized reits peer group is "buy."

• Wall Street's median 12-month price target for Ares Commercial Real Estate Corp is $4.75, about 7% below its February 9 closing price of $5.11

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 20 three months ago

Press Release: ID:nBw1m6zzba

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