Ladder Capital (LADR)

Commercial real estate lender Ladder Capital (NYSE:LADR) missed Wall Street’s revenue expectations in Q4 CY2025, with sales falling 26.4% year on year to $50.47 million. Its non-GAAP profit of $0.17 per share was 28.3% below analysts’ consensus estimates.

Company Overview

Founded during the 2008 financial crisis when traditional lenders retreated from commercial real estate, Ladder Capital (NYSE:LADR) is a real estate investment trust that originates commercial real estate loans, owns commercial properties, and invests in real estate securities.

Thrifts & Mortgage Finance institutions operate by accepting deposits and extending loans primarily for residential mortgages, earning revenue through interest rate spreads (difference between lending rates and borrowing costs) and origination fees. The industry benefits from demographic tailwinds as millennials enter prime homebuying age, technological advancements streamlining the loan approval process, and potential interest rate stabilization improving affordability. However, significant headwinds include net interest margin compression during rate volatility, increased competition from fintech disruptors offering digital-first experiences, mounting regulatory compliance costs, and potential housing market corrections that could impact loan portfolios and default rates.

Ladder Capital competes with other commercial real estate finance companies and REITs such as Blackstone Mortgage Trust (NYSE:BXMT), Starwood Property Trust (NYSE:STWD), and KKR Real Estate Finance Trust (NYSE:KREF), as well as traditional banks and insurance companies that provide commercial real estate financing.

In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees. Unfortunately, Ladder Capital’s 10% annualized revenue growth over the last five years was mediocre. This was below our standard for the banking sector and is a rough starting point for our analysis.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Ladder Capital’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 9.7% annually. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Ladder Capital missed Wall Street’s estimates and reported a rather uninspiring 26.4% year-on-year revenue decline, generating $50.47 million of revenue.

Net interest income made up 35.2% of the company’s total revenue during the last five years, meaning Ladder Capital is well diversified and has a variety of income streams driving its overall growth. Nevertheless, net interest income is critical to analyze for banks because they’re considered a higher-quality, more recurring revenue source by investors.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Ladder Capital’s EPS grew at an unimpressive 7.6% compounded annual growth rate over the last five years, lower than its 10% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Ladder Capital, its two-year annual EPS declines of 20.4% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q4, Ladder Capital reported adjusted EPS of $0.17, down from $0.27 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Ladder Capital’s full-year EPS of $0.85 to grow 30%.

Return on equity, or ROE, quantifies bank profitability relative to shareholder equity - an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.

Over the last five years, Ladder Capital has averaged an ROE of 6.6%, uninspiring for a company operating in a sector where the average shakes out around 7.5%.

We struggled to find many positives in these results. Its revenue missed and its net interest income fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock remained flat at $10.95 immediately after reporting.

Updated: February 5, 2026 at 8:39 AM EST

Before deciding whether to buy Ladder Capital or pass, we urge investors to consider business quality, valuation, and the latest quarterly results.

Ladder Capital’s business quality ultimately falls short of our standards. First off, its revenue growth was mediocre over the last five years. And while its net interest income growth was exceptional over the last five years, the downside is its relatively low ROE suggests management has struggled to find compelling investment opportunities. On top of that, its unimpressive EPS growth over the last five years shows it’s failed to produce meaningful profits for shareholders.

Ladder Capital’s P/B ratio based on the next 12 months is 1x. While this valuation is fair, the upside isn’t great compared to the potential downside. We're fairly confident there are better investments elsewhere.

Wall Street analysts have a consensus one-year price target of $12.50 on the company (compared to the current share price of $10.95).