📊 ARI Key Takeaways
Is Apollo Commercial Real Estate Finance, Inc. (ARI) a Good Investment?
ARI demonstrates strong profitability with 46.7% net margins and impressive 62.9% revenue growth, generating substantial free cash flow of $142.5M. However, the critical concern is severely inadequate interest coverage of 0.5x, indicating the company cannot cover debt service from operating income, which is unsustainable for a REIT and suggests potential covenant violations or refinancing stress.
Apollo Commercial Real Estate Finance shows a meaningful rebound in top-line growth, strong operating profitability, and solid operating cash generation, which supports a more stable near-term fundamental outlook. However, weak interest coverage, modest returns on assets and equity, and limited cash relative to a large balance sheet keep the overall profile balanced rather than clearly strong.
Why Buy Apollo Commercial Real Estate Finance, Inc. Stock? ARI Key Strengths
- Exceptional net margin of 46.7% indicating highly profitable lending operations
- Strong revenue growth of 62.9% YoY with corresponding operating income growth
- Robust free cash flow generation of $142.5M with 52.5% FCF margin to revenue
- Conservative leverage with 0.42x debt-to-equity ratio relative to peers
- Revenue grew 62.9% year over year while net income increased 10.7%, showing improving earnings momentum
- Operating margin of 46.8% and net margin of 46.7% indicate strong profitability conversion
- Operating cash flow and free cash flow of $142.52M suggest earnings are supported by real cash generation
ARI Stock Risks: Apollo Commercial Real Estate Finance, Inc. Investment Risks
- Dangerously low interest coverage ratio of 0.5x - unable to cover debt service from operating income
- Low absolute ROE of 6.8% and minimal ROA of 1.3% despite high margins suggests capital inefficiency
- Minimal cash position of $139.8M relative to $773.4M long-term debt creates refinancing risk
- Heavy reliance on financial engineering in REIT model; interest coverage deterioration signals fundamental stress
- Interest coverage of 0.5x indicates weak ability to cover interest expense from operating earnings
- ROE of 6.8% and ROA of 1.3% remain modest for the size of the asset base
- Cash of $139.82M is relatively limited compared with $8.04B of liabilities, reducing liquidity flexibility under stress
Key Metrics to Watch
- Interest coverage ratio - must improve above 2.0x to indicate sustainable debt servicing
- Debt-to-assets ratio - currently 0.81x indicates rising leverage concentration
- Operating cash flow sustainability - verify 62.9% revenue growth is repeatable
- Quarterly dividend sustainability relative to free cash flow generation
- Interest coverage trend
- Net income and operating cash flow consistency
Apollo Commercial Real Estate Finance, Inc. (ARI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 52.5% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. The current ratio below 1.0x warrants monitoring of short-term liquidity.
ARI Profit Margin, ROE & Profitability Analysis
ARI vs Real Estate Sector: How Apollo Commercial Real Estate Finance, Inc. Compares
How Apollo Commercial Real Estate Finance, Inc. compares to Real Estate sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Apollo Commercial Real Estate Finance, Inc. Stock Overvalued? ARI Valuation Analysis 2026
Based on fundamental analysis, Apollo Commercial Real Estate Finance, Inc. appears fundamentally strong relative to the Real Estate sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Apollo Commercial Real Estate Finance, Inc. Balance Sheet: ARI Debt, Cash & Liquidity
ARI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Apollo Commercial Real Estate Finance, Inc.'s revenue has shown modest growth of 3% over the 5-year period. The most recent EPS of $0.29 reflects profitable operations.
ARI Revenue Growth, EPS Growth & YoY Performance
ARI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $61.6M | $20.7M | $0.34 |
| Q2 2025 | $70.9M | $20.7M | $0.12 |
| Q1 2025 | $65.8M | $26.0M | $0.16 |
| Q3 2024 | $71.6M | $11.6M | $0.00 |
| Q2 2024 | $81.1M | -$34.5M | $0.23 |
| Q1 2024 | $80.5M | $48.9M | $0.32 |
| Q3 2023 | $76.3M | $11.6M | $0.00 |
| Q2 2023 | $76.0M | $15.2M | $-0.30 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Apollo Commercial Real Estate Finance, Inc. Dividends, Buybacks & Capital Allocation
ARI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Apollo Commercial Real Estate Finance, Inc. (CIK: 0001467760)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ARI
What is the AI rating for ARI?
Apollo Commercial Real Estate Finance, Inc. (ARI) has a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 67% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ARI's key strengths?
Claude: Exceptional net margin of 46.7% indicating highly profitable lending operations. Strong revenue growth of 62.9% YoY with corresponding operating income growth. ChatGPT: Revenue grew 62.9% year over year while net income increased 10.7%, showing improving earnings momentum. Operating margin of 46.8% and net margin of 46.7% indicate strong profitability conversion.
What are the risks of investing in ARI?
Claude: Dangerously low interest coverage ratio of 0.5x - unable to cover debt service from operating income. Low absolute ROE of 6.8% and minimal ROA of 1.3% despite high margins suggests capital inefficiency. ChatGPT: Interest coverage of 0.5x indicates weak ability to cover interest expense from operating earnings. ROE of 6.8% and ROA of 1.3% remain modest for the size of the asset base.
What is ARI's revenue and growth?
Apollo Commercial Real Estate Finance, Inc. reported revenue of $271.6M.
Does ARI pay dividends?
Apollo Commercial Real Estate Finance, Inc. pays dividends, with $141.3M distributed to shareholders in the trailing twelve months.
Where can I find ARI SEC filings?
Official SEC filings for Apollo Commercial Real Estate Finance, Inc. (CIK: 0001467760) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ARI's EPS?
Apollo Commercial Real Estate Finance, Inc. has a diluted EPS of $0.81.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is ARI a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Apollo Commercial Real Estate Finance, Inc. has a HOLD rating with 67% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is ARI stock overvalued or undervalued?
Valuation metrics for ARI: ROE of 6.8% (sector avg: 8%), net margin of 46.7% (sector avg: 20%). Compare these metrics with sector averages to assess valuation.
Should I buy ARI stock in 2026?
Our dual AI analysis gives Apollo Commercial Real Estate Finance, Inc. a combined HOLD rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is ARI's free cash flow?
Apollo Commercial Real Estate Finance, Inc.'s operating cash flow is $142.5M, with capital expenditures of N/A. FCF margin is 52.5%.
How does ARI compare to other Real Estate stocks?
Vs Real Estate sector averages: Net margin 46.7% (avg: 20%), ROE 6.8% (avg: 8%), current ratio N/A (avg: 1.5).