Arbor Realty Trust has gotten torched over the last six months - since August 2025, its stock price has dropped 33.3% to $7.88 per share. This may have investors wondering how to approach the situation.
Is there a buying opportunity in Arbor Realty Trust, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.
Why Do We Think Arbor Realty Trust Will Underperform?
Even with the cheaper entry price, we're cautious about Arbor Realty Trust. Here are three reasons we avoid ABR and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions.
Unfortunately, Arbor Realty Trust’s 7.6% annualized revenue growth over the last five years was tepid. This was below our standard for the banking sector.
2. EPS Took a Dip Over the Last Two Years
Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.
Sadly for Arbor Realty Trust, its EPS declined by more than its revenue over the last two years, dropping 26%. This tells us the company struggled to adjust to shrinking demand.
3. Declining TBVPS Reflects Erosion of Asset Value
Tangible book value per share (TBVPS) serves as a key indicator of a bank’s financial strength, representing the hard assets available to shareholders after removing intangible assets that could evaporate during financial distress.
Although Arbor Realty Trust’s TBVPS increased by 6.2% annually over the last five years, the past two years show the tide has turned as TBVPS declined at a -4% annual clip (from $12.62 to $11.63 per share).
Final Judgment
We cheer for all companies supporting the economy, but in the case of Arbor Realty Trust, we’ll be cheering from the sidelines. Following the recent decline, the stock trades at 0.7× forward P/B (or $7.88 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are superior stocks to buy right now. Let us point you toward a fast-growing restaurant franchise with an A+ ranch dressing sauce.
Stocks We Would Buy Instead of Arbor Realty Trust
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