MeritValue

Ares Commercial Real Estate Corp

ACREdata completeness 88%14 fiscal years on file
The thesis, from the filings

Ares Commercial Real Estate Corp earns about 5% on invested capital, but has diluted owners by 29% over 5 years — worth asking whether the growth reaches owners. The cash-flow models don't apply cleanly here — the ledger says why below.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$102.1M1$106.8M2$92.9M3$69.7M3$54.8M3
Net income$60.5M4$29.8M5−$38.9M6−$35M6−$902,0006
Operating cash flow$48.4M7$57.2M8$46.8M9$35.5M9$21.4M9
Capital expenditure—————
Free cash flow (derived)—————
Total debt$1.04B10$960.2M11$894.8M12$718.5M13$948.2M14
Cash & equivalents$50.6M15$141.3M16$110.5M17$63.8M17$29.3M17
Diluted shares42.7M52.1M54.3M54.4M54.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$92.84
your share of equity
Profit it earned you last year
−$0.16
Free cash flow it threw off
—
Debt you’d be carrying
$172.75

10 shares is a claim on $92.84 of net worth that earned you −$0.16 last year, against $172.75 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
5% avg · 5y
FY21 9%FY22 8%FY23 3%FY24 1%FY25 2%

It earned an average 5% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+29% shares · 5y

Share count is up 29% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001628280-24-006105 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0001628280-25-005002 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001628280-26-006635 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0001628280-24-006105 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001628280-25-005002 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001628280-26-006635 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001628280-24-006105 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001628280-25-005002 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001628280-26-006635 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001628280-22-002648 (LongTermDebt)
  11. 10-K · period ending 2022-12-31 · accession 0001628280-23-003601 (LongTermDebt)
  12. 10-K · period ending 2023-12-31 · accession 0001628280-24-006105 (LongTermDebt)
  13. 10-K · period ending 2024-12-31 · accession 0001628280-25-005002 (LongTermDebt)
  14. 10-K · period ending 2025-12-31 · accession 0001628280-26-006635 (LongTermDebt)
  15. 10-K · period ending 2021-12-31 · accession 0001628280-23-003601 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2022-12-31 · accession 0001628280-25-005002 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2023-12-31 · accession 0001628280-26-006635 (CashAndCashEquivalentsAtCarryingValue)