ACRES Commercial (ACR) Announces First Quarter Loss, Delays Revenue Estimates


ACRES Commercial (ACR) posted a quarterly loss of $0.25 per share against the Zacks consensus estimate of $0.26. That compares to a loss of $0.01 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents a profit surprise of -196.15%. A quarter ago, this commercial real estate investment trust was expected to post a loss of $0.07 per share when it actually produced a profit of $0.22, delivering a surprise 414, 29%.

In the past four quarters, the company has only exceeded consensus EPS estimates once.

ACRES Commercial, which is part of the Zacks REIT and Equity Trust segment, posted revenue of $7.77 million for the quarter ended March 2022, missing the Zacks consensus estimate by 28.73%. That compares to revenues of $11.03 million a year ago. The company has exceeded consensus revenue estimates twice in the past four quarters.

The sustainability of the immediate stock price movement based on recently released numbers and future earnings forecasts will primarily depend on management’s comments on the earnings call.

ACRES Commercial shares have lost about 4.6% year-to-date compared to a -9.8% decline for the S&P 500.

What’s next for ACRES Commercial?

As ACRES Commercial has outperformed the market so far this year, the question on investors’ minds is: what’s next for the stock?

There is no easy answer to this key question, but a reliable measure that can help investors answer it is the company’s earnings outlook. This includes not only current consensus earnings expectations for the upcoming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track these revisions on their own or rely on a proven scoring tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Prior to this publication of results, the trend of estimate revisions for ACRES Commercial: favorable. While the magnitude and direction of estimate revisions may change following the release of the company’s earnings report, the current situation results in a Zacks No. 2 (buy) ranking for the stock. Thus, stocks are expected to outperform the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the next few quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.31 on $9.9 million in revenue for the upcoming quarter and $1.19 on $40.7 million in revenue for the current fiscal year.

Investors should be aware that the outlook for the sector can also have a significant impact on stock performance. In terms of Zacks industry rankings, REIT and Equity Trust are currently in the bottom 38% of Zacks more than 250 industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Arbor Realty Trust (ABR), another stock in the same sector, has not yet released its results for the quarter ended March 2022. The results are expected to be released on May 6.

This real estate investment trust is expected to post quarterly earnings of $0.44 per share in its next report, representing a year-over-year change of -15.4%. The consensus EPS estimate for the quarter remained unchanged for the past 30 days.

Arbor Realty Trust revenue is expected to be $165.19 million, up 81.3% from the prior year quarter.

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