NexPoint Real Estate Finance (NYSE:NREF) Announces Earnings Results, Beats Expectations By $0.12 EPS

NexPoint Real Estate Finance (NYSE:NREF) posted its earnings results on Thursday. The company reported $0.52 EPS for the quarter, topping the consensus estimate of $0.40 by $0.12, FiscalAI reports. NexPoint Real Estate Finance had a net margin of 107.93% and a return on equity of 12.72%. The firm had revenue of $9.91 million for the quarter, compared to the consensus estimate of $15.34 million.

Here are the key takeaways from NexPoint Real Estate Finance’s conference call:

• Third-quarter earnings available for distribution were $0.52 per share and cash available for distribution was $0.60, both above year-earlier levels. The $0.50 dividend was covered 1.2 times by cash available for distribution.
• Fourth-quarter guidance calls for earnings available for distribution of $0.37–$0.47 per share and cash available for distribution of $0.50–$0.60, with respective midpoints of $0.42 and $0.55—below Q3 results.
• Book value per diluted share fell 5.2% sequentially to $17.63, mainly due to unrealized losses on fair-valued positions amid a rapid rise in interest rates. Management said rates have since retraced and expects that to support a Q4 rebound.
• NREF reported $280 million of year-to-date closings from a previously identified $415 million pipeline, with another $160 million committed over the next 12 months. Management said expanded Mizuho financing capacity and expected repayments provide room to pursue new investments.
• Management sees potential to provide supplemental financing to stressed agency multifamily borrowers, saying the strategy could earn high-single-digit returns before leverage and mid-teens returns with back leverage. The program is still being developed, and management acknowledged the opportunity could diminish if capital markets improve quickly.

NexPoint Real Estate Finance Stock Performance

NREF stock traded down $1.01 during mid-day trading on Thursday, reaching $13.63. 157,826 shares of the stock traded hands, compared to its average volume of 58,532. The company has a quick ratio of 163.94, a current ratio of 163.94 and a debt-to-equity ratio of 1.79. NexPoint Real Estate Finance has a 52 week low of $12.60 and a 52 week high of $18.43. The business has a 50-day moving average of $16.04 and a two-hundred day moving average of $15.41. The firm has a market capitalization of $256.98 million, a PE ratio of 5.75 and a beta of 1.11.

NexPoint Real Estate Finance Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, December 31st. Shareholders of record on Tuesday, December 15th will be given a dividend of $0.50 per share. The ex-dividend date of this dividend is Tuesday, December 15th. This represents a $2.00 dividend on an annualized basis and a yield of 14.7%. NexPoint Real Estate Finance’s payout ratio is currently 84.39%.

Analysts Set New Price Targets

A number of analysts have weighed in on the company. Weiss Ratings reaffirmed a “hold (c)” rating on shares of NexPoint Real Estate Finance in a research report on Monday, September 28th. Keefe, Bruyette & Woods lowered their price objective on NexPoint Real Estate Finance from $16.00 to $15.00 and set a “market perform” rating on the stock in a report on Friday, October 9th. Zacks Research raised NexPoint Real Estate Finance from a “strong sell” rating to a “hold” rating in a research note on Thursday, September 24th. Wall Street Zen lowered NexPoint Real Estate Finance from a “hold” rating to a “sell” rating in a report on Saturday, August 15th. Finally, Piper Sandler upped their target price on NexPoint Real Estate Finance from $16.00 to $17.50 and gave the stock a “neutral” rating in a research report on Friday, August 7th. Four investment analysts have rated the stock with a Hold rating. According to MarketBeat, the stock has an average rating of “Hold” and an average price target of $16.25.

About NexPoint Real Estate Finance

NexPoint Real Estate Finance, Inc (NYSE:NREF) is a real estate finance company organized as a mortgage real estate investment trust. The company focuses on generating income through investments in commercial real estate debt and related credit instruments rather than directly operating properties.

Its investment activities have included transitional mortgage loans, senior and subordinate loans, mezzanine loans, preferred equity investments, and commercial mortgage-backed securities. NexPoint Real Estate Finance has emphasized lending and investment opportunities tied primarily to multifamily and other commercial real estate assets in the United States.

The company was formed in 2015 and became a publicly traded company in 2020.