NEXPOINT REAL ESTATE FINANCE (NREF) Stock Fundamental Analysis
NYSE:NREF - New York Stock Exchange, Inc. - US65342V1017 - REIT - Currency: USD
We assign a fundamental rating of 6 out of 10 to NREF. NREF was compared to 65 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. NREF has an excellent profitability rating, but there are concerns on its financial health. NREF has both an excellent growth and valuation score. This means it is growing and it is still cheap. This is a rare combination!
1. Profitability
1.1 Basic Checks
NREF had positive earnings in the past year.
In the past year NREF had a positive cash flow from operations.
Each year in the past 5 years NREF has been profitable.
NREF had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NREF has a better Return On Assets (0.90%) than 72.31% of its industry peers.
With an excellent Return On Equity value of 9.10%, NREF belongs to the best of the industry, outperforming 93.85% of the companies in the same industry.
NREF has a better Return On Invested Capital (1.13%) than 80.00% of its industry peers.
NREF had an Average Return On Invested Capital over the past 3 years of 0.29%. This is in line with the industry average of 1.42%.
The last Return On Invested Capital (1.13%) for NREF is above the 3 year average (0.29%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.9% | ||
| ROE | 9.1% | ||
| ROIC | 1.13% |
ROA(3y)0.17%
ROA(5y)0.23%
ROE(3y)2.48%
ROE(5y)6.54%
ROIC(3y)0.29%
ROIC(5y)0.42%
1.3 Margins
NREF has a Profit Margin of 31.43%. This is amongst the best in the industry. NREF outperforms 92.31% of its industry peers.
In the last couple of years the Profit Margin of NREF has declined.
NREF has a better Operating Margin (49.93%) than 90.77% of its industry peers.
NREF's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 71.04%, NREF belongs to the top of the industry, outperforming 90.77% of the companies in the same industry.
NREF's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 49.93% | ||
| PM (TTM) | 31.43% | ||
| GM | 71.04% |
OM growth 3Y-21.92%
OM growth 5Y-10.46%
PM growth 3Y-21.3%
PM growth 5YN/A
GM growth 3Y-5.8%
GM growth 5Y2.25%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so NREF is destroying value.
NREF has more shares outstanding than it did 1 year ago.
The number of shares outstanding for NREF has been increased compared to 5 years ago.
NREF has a better debt/assets ratio than last year.
2.2 Solvency
NREF has a debt to FCF ratio of 172.90. This is a negative value and a sign of low solvency as NREF would need 172.90 years to pay back of all of its debts.
NREF's Debt to FCF ratio of 172.90 is in line compared to the rest of the industry. NREF outperforms 41.54% of its industry peers.
A Debt/Equity ratio of 8.93 is on the high side and indicates that NREF has dependencies on debt financing.
NREF has a Debt to Equity ratio of 8.93. This is amonst the worse of the industry: NREF underperforms 87.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.93 | ||
| Debt/FCF | 172.9 | ||
| Altman-Z | N/A |
ROIC/WACC0.91
WACC1.24%
2.3 Liquidity
A Current Ratio of 0.07 indicates that NREF may have some problems paying its short term obligations.
With a Current ratio value of 0.07, NREF is not doing good in the industry: 73.85% of the companies in the same industry are doing better.
NREF has a Quick Ratio of 0.07. This is a bad value and indicates that NREF is not financially healthy enough and could expect problems in meeting its short term obligations.
NREF's Quick ratio of 0.07 is on the low side compared to the rest of the industry. NREF is outperformed by 73.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.07 | ||
| Quick Ratio | 0.07 |
3. Growth
3.1 Past
NREF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 206.90%, which is quite impressive.
NREF shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -8.76% yearly.
The Revenue has grown by 97.64% in the past year. This is a very strong growth!
The Revenue has been growing by 17.01% on average over the past years. This is quite good.
EPS 1Y (TTM)206.9%
EPS 3Y-8.76%
EPS 5YN/A
EPS Q2Q%189.13%
Revenue 1Y (TTM)97.64%
Revenue growth 3Y-2.84%
Revenue growth 5Y17.01%
Sales Q2Q%139.47%
3.2 Future
The Earnings Per Share is expected to grow by 6.86% on average over the next years.
NREF is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 21.09% yearly.
EPS Next Y15.03%
EPS Next 2Y6.86%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year41.46%
Revenue Next 2Y21.09%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 5.16, which indicates a rather cheap valuation of NREF.
NREF's Price/Earnings ratio is rather cheap when compared to the industry. NREF is cheaper than 95.38% of the companies in the same industry.
When comparing the Price/Earnings ratio of NREF to the average of the S&P500 Index (27.15), we can say NREF is valued rather cheaply.
With a Price/Forward Earnings ratio of 6.70, the valuation of NREF can be described as very cheap.
Based on the Price/Forward Earnings ratio, NREF is valued cheaper than 86.15% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.60, NREF is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.16 | ||
| Fwd PE | 6.7 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NREF indicates a rather cheap valuation: NREF is cheaper than 84.62% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, NREF is valued a bit cheaper than 72.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.87 | ||
| EV/EBITDA | 58 |
4.3 Compensation for Growth
NREF's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
NREF has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)0.34
PEG (5Y)N/A
EPS Next 2Y6.86%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 14.59%, NREF is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 11.56, NREF pays a bit more dividend than its industry peers.
NREF's Dividend Yield is rather good when compared to the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.59% |
5.2 History
NREF has been paying a dividend for over 5 years, so it has already some track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
NREF pays out 103.52% of its income as dividend. This is not a sustainable payout ratio.
DP103.52%
EPS Next 2Y6.86%
EPS Next 3YN/A
NYSE:NREF (7/1/2025, 9:47:42 AM)
13.78
-0.01 (-0.07%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners68.52%
Inst Owner Change0.52%
Ins Owners7.1%
Ins Owner Change22.57%
Market Cap244.04M
Analysts47.5
Price Target15.56 (12.92%)
Short Float %1.01%
Short Ratio3.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.59% |
Yearly Dividend2.67
Dividend Growth(5Y)N/A
DP103.52%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-5.27%
Min EPS beat(2)-17.97%
Max EPS beat(2)7.42%
EPS beat(4)3
Avg EPS beat(4)22.97%
Min EPS beat(4)-17.97%
Max EPS beat(4)53.19%
EPS beat(8)3
Avg EPS beat(8)8.71%
EPS beat(12)7
Avg EPS beat(12)8.31%
EPS beat(16)9
Avg EPS beat(16)6.88%
Revenue beat(2)2
Avg Revenue beat(2)21.96%
Min Revenue beat(2)1.15%
Max Revenue beat(2)42.76%
Revenue beat(4)3
Avg Revenue beat(4)16.23%
Min Revenue beat(4)-1.6%
Max Revenue beat(4)42.76%
Revenue beat(8)3
Avg Revenue beat(8)-0.6%
Revenue beat(12)5
Avg Revenue beat(12)15.81%
Revenue beat(16)9
Avg Revenue beat(16)75.3%
PT rev (1m)-1.61%
PT rev (3m)-6.15%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-16.14%
EPS NY rev (1m)0%
EPS NY rev (3m)-10.08%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.34%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.16 | ||
| Fwd PE | 6.7 | ||
| P/S | 1.58 | ||
| P/FCF | 8.87 | ||
| P/OCF | 8.84 | ||
| P/B | 0.46 | ||
| P/tB | 0.46 | ||
| EV/EBITDA | 58 |
EPS(TTM)2.67
EY19.38%
EPS(NY)2.06
Fwd EY14.92%
FCF(TTM)1.55
FCFY11.27%
OCF(TTM)1.56
OCFY11.31%
SpS8.71
BVpS30.08
TBVpS30.08
PEG (NY)0.34
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.9% | ||
| ROE | 9.1% | ||
| ROCE | 1.51% | ||
| ROIC | 1.13% | ||
| ROICexc | 1.14% | ||
| ROICexgc | 1.14% | ||
| OM | 49.93% | ||
| PM (TTM) | 31.43% | ||
| GM | 71.04% | ||
| FCFM | 17.83% |
ROA(3y)0.17%
ROA(5y)0.23%
ROE(3y)2.48%
ROE(5y)6.54%
ROIC(3y)0.29%
ROIC(5y)0.42%
ROICexc(3y)0.29%
ROICexc(5y)0.42%
ROICexgc(3y)0.29%
ROICexgc(5y)0.42%
ROCE(3y)0.39%
ROCE(5y)0.55%
ROICexcg growth 3Y-11.77%
ROICexcg growth 5YN/A
ROICexc growth 3Y-11.78%
ROICexc growth 5YN/A
OM growth 3Y-21.92%
OM growth 5Y-10.46%
PM growth 3Y-21.3%
PM growth 5YN/A
GM growth 3Y-5.8%
GM growth 5Y2.25%
F-Score7
Asset Turnover0.03
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.93 | ||
| Debt/FCF | 172.9 | ||
| Debt/EBITDA | 58.41 | ||
| Cap/Depr | 2.33% | ||
| Cap/Sales | 0.07% | ||
| Interest Coverage | 1.78 | ||
| Cash Conversion | 33.91% | ||
| Profit Quality | 56.72% | ||
| Current Ratio | 0.07 | ||
| Quick Ratio | 0.07 | ||
| Altman-Z | N/A |
F-Score7
WACC1.24%
ROIC/WACC0.91
Cap/Depr(3y)2124.95%
Cap/Depr(5y)N/A
Cap/Sales(3y)76.13%
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)206.9%
EPS 3Y-8.76%
EPS 5YN/A
EPS Q2Q%189.13%
EPS Next Y15.03%
EPS Next 2Y6.86%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)97.64%
Revenue growth 3Y-2.84%
Revenue growth 5Y17.01%
Sales Q2Q%139.47%
Revenue Next Year41.46%
Revenue Next 2Y21.09%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y1559.61%
EBIT growth 3Y-24.13%
EBIT growth 5Y4.77%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-36.08%
FCF growth 3Y14.5%
FCF growth 5YN/A
OCF growth 1Y-35.84%
OCF growth 3Y-15.94%
OCF growth 5YN/A