Investors Heavily Search Arbor Realty Trust (ABR): Here is What You Need to Know

Arbor Realty Trust (ABR) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Over the past month, shares of this real estate investment trust have returned +2.3%, compared to the Zacks S&P 500 composite's -5.7% change. During this period, the Zacks REIT and Equity Trust industry, which Arbor Realty Trust falls in, has lost 1.5%. The key question now is: What could be the stock's future direction?While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.For the current quarter, Arbor Realty Trust is expected to post earnings of $0.34 per share, indicating a change of -27.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -19% over the last 30 days.The consensus earnings estimate of $1.37 for the current fiscal year indicates a year-over-year change of -21.3%. This estimate has changed -21.2% over the last 30 days.For the next fiscal year, the consensus earnings estimate of $1.56 indicates a change of +13.5% from what Arbor Realty Trust is expected to report a year ago. Over the past month, the estimate has changed -10.3%.With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for Arbor Realty Trust.The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:12 Month EPSProjected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.In the case of Arbor Realty Trust, the consensus sales estimate of $243.16 million for the current quarter points to a year-over-year change of -24.3%. The $950.65 million and $985.56 million estimates for the current and next fiscal years indicate changes of -18.6% and +3.7%, respectively.Last Reported Results and Surprise HistoryArbor Realty Trust reported revenues of $262.87 million in the last reported quarter, representing a year-over-year change of -20.6%. EPS of $0.40 for the same period compares with $0.51 a year ago.Compared to the Zacks Consensus Estimate of $259.68 million, the reported revenues represent a surprise of +1.23%. The EPS surprise was -4.76%.Over the last four quarters, Arbor Realty Trust surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.Arbor Realty Trust is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Arbor Realty Trust. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Arbor Realty Trust (ABR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks