Value
9.9/10data confidence 40%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| p ocf | 9.9 |
- ▸P/OCF: 3.4x (FFO proxy — REITs gated off P/E)
- ▸Attractively valued
ARI · Why this verdict
Why Apollo Commercial Real Estate F (ARI) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Apollo Commercial Real Estate Finance looks very cheap at 3.5x price to operating cash flow with strong margins and a wide moat, but a $299M market cap below the investable minimum, three earnings misses in four quarters and an unreliable analyst target make it a watch-only name.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The REIT trades at 3.5x price to operating cash flow, attractively valued with a value score near 9.9, and is the best in class among peers. Valuation breakdown | Price rerates toward book-like cash flow multiples as earnings stabilize. | ↑Improving |
| CounterA very low multiple on a mortgage REIT can reflect expected credit losses, and the August quarter showed a large loss versus estimate. | ||
ARI missed estimates in 3 of the last 4 quarters, including EPS of -2.62 against an estimate of -0.58 in August, with earnings due in 2 days. Earnings | The November 3 report breaks the miss streak with a result at or above estimates. | ↑Improving |
| CounterOne large loss may reflect a reserve charge that clears legacy problem loans, clearing the way for better future quarters. | ||
The company depends on its external manager, Apollo, and its $299M market cap falls below the $400M minimum for the investable universe. Bear case | Market cap rises above $400M through price recovery. | ↑Improving |
| CounterExternal-manager alignment can be a strength, since Apollo's origination platform sources the loans. | ||
The raw analyst target of $8.00 is 3.4x the $2.33 price and was rejected as implausible, so the 243% analyst upside is not credited and light coverage dampens the signal. Warnings | Analyst targets converge to a credible range within 100% of price after the November 3 report. | ↑Improving |
| CounterStale targets from before the August loss may simply not have been revised yet, in which case the rejection is correct. | ||
Margins of 21%, a wide economic moat and a Piotroski F-Score of 7/9 coexist with falling OBV volume distribution and price below the 200-day average. Quality breakdown | Volume turns to accumulation and price reclaims the 200-day average. | →Stable |
| CounterThe 200-day average is still rising, so the pullback may be part of an uptrend rather than a breakdown. | ||
The REIT trades at 3.5x price to operating cash flow, attractively valued with a value score near 9.9, and is the best in class among peers.
↑ImprovingValuation breakdown
- Expectation
- Price rerates toward book-like cash flow multiples as earnings stabilize.
CounterA very low multiple on a mortgage REIT can reflect expected credit losses, and the August quarter showed a large loss versus estimate.
ARI missed estimates in 3 of the last 4 quarters, including EPS of -2.62 against an estimate of -0.58 in August, with earnings due in 2 days.
↑ImprovingEarnings
- Expectation
- The November 3 report breaks the miss streak with a result at or above estimates.
CounterOne large loss may reflect a reserve charge that clears legacy problem loans, clearing the way for better future quarters.
The company depends on its external manager, Apollo, and its $299M market cap falls below the $400M minimum for the investable universe.
↑ImprovingBear case
- Expectation
- Market cap rises above $400M through price recovery.
CounterExternal-manager alignment can be a strength, since Apollo's origination platform sources the loans.
The raw analyst target of $8.00 is 3.4x the $2.33 price and was rejected as implausible, so the 243% analyst upside is not credited and light coverage dampens the signal.
↑ImprovingWarnings
- Expectation
- Analyst targets converge to a credible range within 100% of price after the November 3 report.
CounterStale targets from before the August loss may simply not have been revised yet, in which case the rejection is correct.
Margins of 21%, a wide economic moat and a Piotroski F-Score of 7/9 coexist with falling OBV volume distribution and price below the 200-day average.
→StableQuality breakdown
- Expectation
- Volume turns to accumulation and price reclaims the 200-day average.
CounterThe 200-day average is still rising, so the pullback may be part of an uptrend rather than a breakdown.
Per-dimension breakdown
Quality
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.8 |
| ROA | 1.5 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 8.3 |
| Moat | 7.9 |
| Piotroski F | 7.8 |
- ▸Strong margins: 21%
- ▸Wide economic moat
- ▸Strong Piotroski F-Score: 7/9
Growth
0.0/10data confidence 33%| Component | Sub-score |
|---|---|
| EPS growth | 0.0 |
Momentum
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.7 |
| MACD | 6.7 |
| OBV | 1.0 |
| MA position | 7.2 |
| Volume | 3.9 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+0.2%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| news sentiment | 10.0 |
| Analyst rating | 5.0 |
| Price target | 10.0 |
- ▸Positive news sentiment (+1.00)
- ▸Analyst upside: 232%
Insider
6.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 3.0 |
- ▸Negligible insider selling — $6,586 (0.002% of mkt cap)
- ▸Institutions accumulating
Peer rank
8.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.3 |
| quality rank | 6.5 |
| growth rank | 10.0 |
- ▸Best in class
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.4 |
| support resistance | 2.3 |
| 52w position | 8.1 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.3 |
| days to cover | 8.7 |
| volatility | 5.8 |
| beta | 4.7 |
| debt equity | 8.8 |
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.5 |
| news activity | 8.0 |
- ▸Earnings concerns: 1B/3M
- ▸Earnings today
- ▸Dividend: 43.3%
How the verdict was assembled
Engine trigger
Market cap $296M below $400M minimum. Not in investable universe.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:MARKET_CAPPassed (5)
- MOMENTUM:4.5>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- EARNINGS_PROXIMITY:0d<=7d
Warning (3)
- MOMENTUM:4.5<5.5 (soft — BUY_NOW allowed but watch)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.00
Upside
+14.9%
Downside
7.1%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeSector Rotation — Real Estate sector out of favor, value=9.9
SuitabilityAggressive — Beta 1.59>1.3, MCap $0.3B<$5B
Investment implication
The HOLD_IF_HOLDING verdict reflects the EARNINGS_PROXIMITY gate's 0d<=7d outcome against Value at 9.9 and asymmetric R:R of 0.00.
The strongest dimensions are Value at 9.9, Peer rank at 8.8, and Sentiment at 8.0; the weakest are Growth at 0.0, Technical at 3.6, and Catalyst at 3.9. The V9 engine flagged 1 failed gate with 3 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Cash Flow Discount
Trip ifPrice to operating cash flow rises above 8x from current 3.5x.
- P2Repeated Earnings Misses
Trip ifEPS surprise stays below 0% in the November 3 report and the following quarter.
- P3Manager And Size Constraints
Trip ifMarket cap falls below $200M from current $299M.
- P4Unreliable Analyst Target
Trip ifConsensus analyst target remains more than 3x the current price after the November 3 report.
- P5High Quality Operations Fading Volume
Trip ifPiotroski F-Score falls below 5 from current 7/9.