NexPoint Real Estate Finance (NREF) Stock Analysis & Winston Score

NexPoint Real Estate Finance, Inc. is a real estate finance company that lends money to owners of commercial properties across the United States. It focuses mainly on multifamily apartment buildings, single-family rental homes, and self-storage facilities. The company is managed externally by NexPoint Advisors, which is part of the broader NexPoint group of investment firms.

The company makes money by earning interest and fees on the loans and mortgage-backed securities it holds in its portfolio. It is structured as a real estate investment trust (REIT), which means it must pay out most of its income to shareholders as dividends. NexPoint Real Estate Finance operates entirely in the U.S. and is a relatively small company with a market cap around $300 million. Its main risk is rising interest rates, which can increase its borrowing costs and squeeze the spread between what it earns on loans and what it pays to fund them.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-17.6% YoY

YoY Growth Rate

Revenue declining

EPS Growth

-42.6% YoY

YoY Growth Rate

Earnings declining

Insider Activity

9.1%ownership

Insiders own a meaningful stake in the company

Cash Position

Cash flow positive

$4.4B cash & investments

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

NexPoint Real Estate Finance's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

84.1%

Premium pricing power — 84.1% gross margin

Operating Margin

93.9%

Excellent — 93.9% operating margin

ROCE

0.7%

Weak — 0.7% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+11.0%

Steady sales growth (+11.0% YoY)

EPS YoY

+34.5%

Earnings growing fast (+34.5% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

16%

Weak — only 16% of profit becomes cash

FCF Margin

11.0%

Modest free cash flow (11.0%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

11.20

Heavy debt load (11.20)

Interest Cover

3.55x

Tight — interest eats into profit (3.6x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)

5.4x

no trend

Attractive valuation — P/E 5.4

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

-4.5

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Dividend Yield

11.88%

no trend

Healthy income — 11.88% yield

Yield above 6% — often a flag the market is pricing in a cut.

Dividend Growth

+0.0%

no trend

Dividend flat

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