Arbor Realty Trust has gotten torched over the last six months - since December 2025, its stock price has dropped 40.5% to $5.31 per share. This may have investors wondering how to approach the situation.

Is now the time to buy Arbor Realty Trust, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free.

Why Do We Think Arbor Realty Trust Will Underperform?

Even though the stock has become cheaper, we’re sitting this one out for now. Here are three reasons you should be careful with ABR, plus one stock we’d rather own.

1. Net Interest Income Points to Soft Demand

While banks generate revenue from multiple sources, investors view net interest income as a cornerstone — its predictable, recurring characteristics stand in sharp contrast to the volatility of one-time fees.

Arbor Realty Trust’s net interest income has grown at a 4.3% annualized rate over the last five years, much worse than the broader banking industry.

2. EPS Trending Down

Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.

Sadly for Arbor Realty Trust, its EPS declined by 15.3% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult 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 2.3% annually over the last five years, the past two years show the tide has turned as TBVPS declined at a -5.6% annual clip (from $12.54 to $11.18 per share).

Final Judgment

Arbor Realty Trust falls short of our quality standards. Following the recent decline, the stock trades at 0.5× forward P/B (or $5.31 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. We’d suggest looking at one of our top digital advertising picks.

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