American Realty Investors Inc (NYSE: ARL)

Sector: Real Estate Industry: Real Estate Services CIK: 0001102238
Market Cap 273.60 Mn
P/B 0.45
P/E 47.50
P/S 5.58
ROIC (Qtr) -0.05
Div Yield % 0.00
Rev 1y % (Qtr) 10.58
Total Debt (Qtr) 227.03 Mn
Debt/Equity (Qtr) 0.37

About

Price action

Investment thesis

Bull case

  • Strong tangible asset base of 1.10B provides 4.83x coverage of total debt 227.03M, indicating robust asset backing and low credit risk.
  • Tangible assets of 1.10B provide exceptional 111.94x coverage of deferred revenue 9.79M, showing strong service capability backing.
  • Cash position of 29.70M provides exceptional 25.37x coverage of minority interest expenses 1.17M, indicating strong liquidity.
  • Retained earnings of 544.62M represent substantial 0.90x of equity 607.77M, indicating strong internal capital generation.
  • Cash position of 29.70M provides strong 3.03x coverage of deferred revenue 9.79M, ensuring service delivery capability.

Bear case

  • Operating cash flow of (18.12M) barely covers its investment activities of (63.41M), with a coverage ratio of 0.29, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of (18.12M) provides insufficient coverage of deferred revenue obligations of 9.79M, which is -1.85x, raising concerns about future service delivery capabilities.
  • Free cash flow of (106.07M) provides weak coverage of capital expenditures of 87.95M, with a -1.21 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of (18.12M) provides minimal -15.87x coverage of tax expenses of 1.14M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of 14.07M show weak coverage of depreciation charges of 11.79M, with a 1.19 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Real Estate Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CBRE Cbre Group, Inc. 51.14 Bn 41.65 1.30 9.48 Bn
2 CSGP Costar Group, Inc. 26.47 Bn 1,304.00 8.66 1.18 Bn
3 BEKE KE Holdings Inc. 21.08 Bn 43.29 1.45 2.96 Bn
4 JLL Jones Lang Lasalle Inc 16.90 Bn 26.75 0.67 3.48 Bn
5 FSV FirstService Corp 7.01 Bn 56.92 1.78 1.51 Bn
6 COMP Compass, Inc. 6.69 Bn -118.64 1.01 0.48 Bn
7 CIGI Colliers International Group Inc. 5.39 Bn 69.70 2.00 2.50 Bn
8 OPEN Opendoor Technologies Inc. 4.15 Bn -13.09 0.88 1.79 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.42 1.34
EV to Cash from Ops. EV/CFO -25.13 2.97
EV to Debt EV to Debt 2.01 6.15
EV to EBIT EV/EBIT 32.36 5.23
EV to EBITDA EV/EBITDA 68.89 18.71
EV to Free Cash Flow [EV/FCF] EV/FCF -4.29 -9.39
EV to Market Cap EV to Market Cap 1.66 4.27
EV to Revenue EV/Rev 9.28 3.62
Price to Book Value [P/B] P/B 0.45 2.10
Price to Earnings [P/E] P/E 47.50 45.45
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 0.38
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -6.05
Dividend per Basic Share Div per Share (Qtr) 0.00 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 0.42
Interest Coverage Int. cover (Qtr) 1.96 -2.22
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -122.42 -12,525.88
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -57.02 23.84
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.27
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 212.26 4.69
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -0.94 26.73
EBIT Growth (1y) % EBIT 1y % (Qtr) 205.86 12.80
EBT Growth (1y) % EBT 1y % (Qtr) 132.59 21.27
EPS Growth (1y) % EPS 1y % (Qtr) 134.95 22.42
FCF Growth (1y) % FCF 1y % (Qtr) -72.24 54.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 1.84 39.11
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.04 1.45
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.01
Cash Ratio Cash Ratio 0.00 1.45
Current Ratio Current Ratio 0.00 2.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.37 -0.06
Interest Cover Ratio Int Coverage (Qtr) 1.96 -2.22
Times Interest Earned Times Interest Earned (Qtr) 1.96 -2.22
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 52.70 -121.98
EBIT Margin % EBIT Margin % (Qtr) 28.69 -136.76
EBT Margin % EBT Margin % (Qtr) 14.07 -144.54
Gross Margin % Gross Margin % (Qtr) 45.20 32.87
Net Profit Margin % Net Margin % (Qtr) 11.70 -139.89