<div id="readability-page-1"><div><ul> <li>Wondering if Arbor Realty Trust at around $8.87 is a beaten down opportunity or a value trap? Let us unpack what the numbers are really saying about the stock.</li> <li>Despite a modest 0.2% gain over the last 7 days, the share price is still down 3.8% over 30 days, 35.6% year to date, and 30.6% over the past year, with only a 6.9% gain over five years. This naturally raises questions about whether the market has become too pessimistic.</li> <li>Recently, the stock has been in the spotlight as investors reassess the outlook for commercial real estate financing and higher for longer interest rates, both of which directly affect Arbor Realty Trust's business model and funding costs. At the same time, commentary around credit quality in real estate loans and the resilience of specialized lenders has kept sentiment volatile, helping to explain the choppy price action.</li> <li>Even after that slide, Arbor Realty Trust currently clocks a valuation score of 5/6, suggesting it screens as undervalued on most of the key checks we run. We will walk through those methods next, before finishing with a way to think about valuation that goes beyond the usual metrics.</li> </ul> <p>Find out why Arbor Realty Trust's -30.6% return over the last year is lagging behind its peers.</p> <h3>Approach 1: Arbor Realty Trust Excess Returns Analysis</h3> <p>The Excess Returns model looks at how much profit Arbor Realty Trust generates above the minimum return that equity investors require, and then capitalizes those surplus profits into an implied value per share.</p> <p>For Arbor, the starting point is a Book Value of $12.08 per share and a Stable EPS of $1.34 per share, based on the median return on equity over the past five years. Against a Cost of Equity of $1.09 per share, this leaves an Excess Return of $0.24 per share, supported by an Average Return on Equity of 11.21%. Analysts estimate that the balance sheet will remain robust, with a Stable Book Value estimate of $11.93 per share derived from three analyst forecasts.</p> <p>Using these inputs in the Excess Returns framework produces an intrinsic value estimate of roughly $16.05 per share. This suggests that Arbor Realty Trust may be about 44.7% undervalued relative to the current price near $8.87. In other words, the market is pricing Arbor as if its ability to earn returns above its cost of equity will erode sharply, which is not reflected in this model’s current assumptions.</p> <p><strong>Result: UNDERVALUED</strong></p> <p>Our Excess Returns analysis suggests Arbor Realty Trust is undervalued by 44.7%. Track this in your watchlist or portfolio, or discover 907 more undervalued stocks based on cash flows.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c8a42e29-9946-4e7f-bf30-2df74a0a03ce/chart/dcf?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c8a42e29-9946-4e7f-bf30-2df74a0a03ce/chart/dcf"/><figcaption>ABR Discounted Cash Flow as at Dec 2025</figcaption></figure> <p>Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Arbor Realty Trust.</p> <h3>Approach 2: Arbor Realty Trust Price vs Earnings</h3> <p>For a profitable company like Arbor Realty Trust, the price to earnings ratio is a useful way to gauge how much investors are willing to pay for each dollar of current earnings. In general, businesses with stronger growth prospects and lower perceived risk can justify a higher PE multiple, while slower growth or higher risk usually means the multiple should sit closer to, or below, the market and industry norms.</p> <p>Arbor currently trades on a PE of about 11.37x, which is below both the Mortgage REITs industry average of roughly 13.21x and the broader peer group average of about 13.53x. Simply Wall St also calculates a proprietary Fair Ratio of 14.32x, which is the PE multiple Arbor might reasonably trade at once its earnings growth outlook, risk profile, profit margins, industry characteristics and market cap are all taken into account. This Fair Ratio offers a more tailored benchmark than simple peer or industry comparisons because it explicitly adjusts for company specific fundamentals rather than assuming all REITs deserve similar multiples. Compared with this 14.32x Fair Ratio, Arbor’s 11.37x PE suggests the shares are trading at a discount to what those fundamentals would imply.</p> <p><strong>Result: UNDERVALUED</strong></p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c8a42e29-9946-4e7f-bf30-2df74a0a03ce/chart/pe-multiple-vs-industry?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c8a42e29-9946-4e7f-bf30-2df74a0a03ce/chart/pe-multiple-vs-industry"/><figcaption>NYSE:ABR PE Ratio as at Dec 2025</figcaption></figure> <p>PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1448 companies where insiders are betting big on explosive growth.</p> <h3>Upgrade Your Decision Making: Choose your Arbor Realty Trust Narrative</h3> <p>Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, an easy tool on Simply Wall St’s Community page that lets you connect your story about a company with a concrete forecast and a fair value estimate. You can then compare that fair value to today’s price, see whether it looks like a buy or a sell, and have your view automatically update as new news or earnings arrive. For example, one Arbor Realty Trust Narrative might assume that elevated interest rates and slower agency production keep earnings under pressure and justify a fair value close to the most bearish analyst target of about $10.50. Another, more optimistic Narrative could focus on Arbor’s loan resolutions, diversified revenue streams and historical resilience to support assumptions closer to the most bullish target near $15.00. This illustrates how different investors can look at the same facts, plug in different revenue, margin and PE expectations, and end up with very different, but clearly framed, paths from story to numbers to fair value.</p> <p>Do you think there's more to the story for Arbor Realty Trust? Head over to our Community to see what others are saying!</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c8a42e29-9946-4e7f-bf30-2df74a0a03ce/chart/quote-price?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c8a42e29-9946-4e7f-bf30-2df74a0a03ce/chart/quote-price"/><figcaption>NYSE:ABR 1-Year Stock Price Chart</figcaption></figure> <p><em> This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data     and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your     financial situation. We aim to bring you long-term focused analysis driven by fundamental data.     Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.     Simply Wall St has no position in any stocks mentioned.</em></p><div><p>Mobile Infrastructure for Defense and Disaster</p><p>The next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.</p><p>Get the investor briefing before the next round of contracts</p><p><span>Sponsored On Behalf of CiTech</span></p></div></div></div>

<p>Arbor Realty Trust's stock has seen a significant decline, raising questions about its valuation. Despite recent modest gains, the stock is down 35.6% year to date. Analysts suggest the stock is undervalued by 44.7% based on Excess Returns and Price to Earnings analyses. Arbor's current PE ratio is below industry averages, indicating potential undervaluation. The company's valuation score is 5/6, suggesting it is undervalued on key metrics. Investors are reassessing the outlook for commercial real estate financing and interest rates, impacting Arbor's business model and funding costs.</p>

Assessing Arbor Realty Trust After a Sharp 2024 Slide and Earnings Based Valuation Gap