Company Overview
Apollo Commercial Real Estate Finance, Inc. operates as a real estate investment trust that originates, acquires, invests in, and manages commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments. The company functions within the Real Estate sector, specifically categorized under the REIT - Mortgage industry, which implies a business model focused on providing financing solutions for commercial property owners rather than holding physical assets directly. Apollo Commercial Real Estate Finance, Inc. currently holds a market capitalization of $1.46B and reports trailing twelve-month revenue of $268.36M, while the employee count is listed as N/A. These valuation and revenue figures indicate a significant market presence within the specialized mortgage finance niche, suggesting the entity possesses substantial capital deployment capabilities and a diversified portfolio of debt investments that support its operational scale.
Financial Health
The company reported trailing twelve-month revenue of $268.36M and net income of $111.91M, while specific EBITDA figures are not disclosed in the available data. The substantial gap between revenue and net income reveals a highly leveraged cost structure where interest expenses and other operational costs consume the majority of gross revenue before reaching the bottom line. Free cash flow metrics are not available for this reporting period, which limits the ability to assess immediate financial flexibility based on cash generation from operations. However, the balance sheet shows a cash balance of $139.82M against total debt of $7.94B, highlighting a heavily leveraged position typical of mortgage REITs but requiring careful management of liquidity. The debt-to-equity ratio stands at 428.04, indicating that the company relies extensively on debt financing relative to shareholder equity, a structural characteristic of its business model. The current ratio is an exceptionally high 10.97, which suggests strong short-term liquidity relative to current liabilities, though this metric can be distorted by the nature of long-term debt obligations common in this sector. Return on Equity is 6.8% and Return on Assets is 1.4%, metrics that reveal management's effectiveness in generating returns on the capital invested, with the low ROA reflecting the high asset base required to service the substantial debt load.
Valuation Assessment
The trailing twelve-month P/E ratio is 12.88, while the forward P/E is 9.93, implying that the market expects earnings growth in the future to lower the multiple or that current earnings are suppressed by temporary factors. The price-to-book ratio is 0.78, which indicates that the market values the company at a discount to its book value, suggesting a lack of significant market premium over the net asset value of its underlying investments. The price-to-sales ratio is 5.43, and EV/EBITDA is not available, meaning alternative valuation metrics rely heavily on revenue multiples and earnings per share rather than enterprise value efficiency ratios. The 52-week high is $11.21 and the 52-week low is $7.70, providing a trading range that defines recent market sentiment and volatility levels for the stock. Without the specific current share price in the provided facts, the exact percentage deviation from the 52-week high cannot be calculated, but the range itself illustrates the stock's recent price discovery within a $3.51 spread. The beta value is 1.56, which means the stock is expected to be 56% more volatile than the broader market, reflecting the inherent sensitivity of real estate finance stocks to interest rate fluctuations and commercial property market conditions.
Growth & Income
Revenue growth year-over-year is -1.3% and earnings growth year-over-year is -31.0%, indicating that earnings are contracting at a significantly faster rate than revenue, which implies margin compression or increased cost pressures impacting profitability more severely than top-line sales. The dividend yield is 9.6% with a payout ratio of 123.5%, a situation where the company distributes more in dividends than its current net income, suggesting the payout may be unsustainable without reliance on non-recurring income or capital distributions. Given the payout ratio exceeding 100%, the company is currently unable to fund these dividends solely from operating earnings, which contrasts with growth-oriented firms that reinvest earnings. The overall growth and income profile presents a high-yield opportunity tempered by negative earnings momentum and a payout ratio that exceeds current net income generation.