Arbor Realty Trust (ABR): Reassessing Valuation After Analyst Downgrades and Weaker Quarterly Results
Arbor Realty Trust (ABR) is back in the spotlight after a string of analyst downgrades and weaker quarterly numbers pushed the stock lower, prompting investors to reassess both its risk profile and income appeal.
See our latest analysis for Arbor Realty Trust.
The reaction to those downgrades and weaker numbers has come on top of an already steep slide. A roughly 41 percent year to date share price return and a 33 percent one year total shareholder return are both in negative territory, suggesting momentum has clearly been fading even as management rolls out debt refinancings and a sizable buyback to shore up confidence.
If ABR's volatility has you rethinking where you take risk, this could be a good moment to broaden your search and explore fast growing stocks with high insider ownership.
With revenue shrinking, earnings holding up, and the stock trading below both analyst targets and some intrinsic value estimates, is ABR now a contrarian value play or is the market accurately discounting future growth?
Most Popular Narrative: 32.8% Undervalued
With Arbor Realty Trust last closing at $8.06 against a narrative fair value of $12.00, the spread frames this story as a potential mispricing.
Analysts are assuming Arbor Realty Trust's revenue will decrease by 28.7% annually over the next 3 years.
Analysts assume that profit margins will increase from 35.6% today to 96.5% in 3 years time.
Curious how shrinking top line, surging margins and a richer future earnings multiple can all coexist in one valuation case? The full narrative explains the calculations behind that tension.
Result: Fair Value of $12.00 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, that thesis could be upended if Arbor’s resilient execution and loan book repositioning keep revenue firmer and net margins stronger than analysts currently model.
Find out about the key risks to this Arbor Realty Trust narrative.
Build Your Own Arbor Realty Trust Narrative
If you see the story differently or simply want to dig into the numbers yourself, you can build a custom view in just minutes: Do it your way.
A great starting point for your Arbor Realty Trust research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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