DCF Tool

ARI

Apollo Commercial Real Estate Finance Inc – Other Financial Vehicles
Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) is a real estate investment trust that primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings and other commercial real estate-related debt investments. The Company is externally managed and advised by ACREFI Management, LLC, a Delaware limited liability company and an indirect subsidiary of Apollo Global Management, Inc., a leading global alternative investment manager with approximately $433 billion of assets under management at September 30, 2020.
Analysis Results
Intrinsic Value $2,269.85
Latest Price $8.30
Relative Value 100% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 62.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 0.8%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 62.4%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 4.42 4.05
2023 7.17 6.04
2024 11.6 8.99
2025 18.9 13.4
2026 30.7 20.0
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 447 billion. This corresponds to a present value of 267 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 52.4 billion. Adding in the terminal value gives a total present value of 319 billion.

There are presently 141.0 million outstanding shares, so the intrinsic value per share is 2269.85.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 16,826,680,000
Current Cash 0
Current Liabilities 12,244,138,000
Current Debt 0
Non-Cash Working Capital (NCWC) 4,582,542,000
Change in NCWC 2,312,125,000
EBIT 465,374,000
Tax Provision 0
Depreciation and Amortization 5,290,000
Capital Expenditure -266,000
Unlevered Free Cash Flow 2,782,523,000
Current Assets 6,939,908,000
Current Cash 0
Current Liabilities 4,669,491,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,270,417,000
Change in NCWC -359,513,000
EBIT 40,451,000
Tax Provision 0
Depreciation and Amortization 0
Capital Expenditure 0
Unlevered Free Cash Flow -319,062,000
Current Assets 6,888,318,000
Current Cash 0
Current Liabilities 4,258,388,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,629,930,000
Change in NCWC 120,504,000
EBIT 230,174,000
Tax Provision 0
Depreciation and Amortization 0
Capital Expenditure 0
Unlevered Free Cash Flow 350,678,000
Current Assets 5,095,498,000
Current Cash 0
Current Liabilities 2,586,072,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,509,426,000
Change in NCWC 426,602,000
EBIT 219,986,000
Tax Provision 0
Depreciation and Amortization 0
Capital Expenditure 0
Unlevered Free Cash Flow 646,588,000
Current Assets 4,083,286,000
Current Cash 0
Current Liabilities 2,000,462,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,082,824,000
Change in NCWC 174,414,000
EBIT 193,031,000
Tax Provision 0
Depreciation and Amortization 0
Capital Expenditure 0
Unlevered Free Cash Flow 367,445,000
Current Assets 3,459,160,000
Current Cash 0
Current Liabilities 1,550,750,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,908,410,000
Change in NCWC 555,805,000
EBIT 157,876,000
Tax Provision 0
Depreciation and Amortization 0
Capital Expenditure 0
Unlevered Free Cash Flow 713,681,000
Current Assets 2,697,124,000
Current Cash 0
Current Liabilities 1,344,519,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,352,605,000
Change in NCWC 535,752,000
EBIT 103,256,000
Tax Provision 0
Depreciation and Amortization 0
Capital Expenditure 0
Unlevered Free Cash Flow 639,008,000
Current Assets 1,806,931,000
Current Cash 0
Current Liabilities 990,078,000
Current Debt 0
Non-Cash Working Capital (NCWC) 816,853,000
Change in NCWC 134,497,000
EBIT 82,739,000
Tax Provision 0
Depreciation and Amortization 0
Capital Expenditure 0
Unlevered Free Cash Flow 217,236,000
Current Assets 906,904,000
Current Cash 0
Current Liabilities 224,548,000
Current Debt 0
Non-Cash Working Capital (NCWC) 682,356,000
Change in NCWC 135,635,000
EBIT 52,485,000
Tax Provision 0
Depreciation and Amortization 0
Capital Expenditure 0
Unlevered Free Cash Flow 188,120,000
Current Assets 788,227,000
Current Cash 0
Current Liabilities 241,506,000
Current Debt 0
Non-Cash Working Capital (NCWC) 546,721,000
Change in NCWC 209,760,000
EBIT 40,181,000
Tax Provision 0
Depreciation and Amortization 0
Capital Expenditure 0
Unlevered Free Cash Flow 249,941,000

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