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Centerspace (CSR)
NYSE:CSR
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Centerspace
(NYSE:CSR)
61Neutral
Positive Factors
Financial Performance
Centerspace reported Core FFO/sh of $1.21, which was $0.02 above analyst estimates, highlighting the company's focus on maintaining strong occupancy.
Liquidity
CSR is in a good position from a liquidity standpoint with $235.5 million total liquidity and a manageable debt maturity schedule.
Valuation
CSR is attractively priced compared to comparable peers and broader MF REITs.
Negative Factors
Expense Management
Expenses were favorable, but revenue was unfavorable, leading to a lower Core FFO/share.
Market Performance
CSR's two largest markets, Denver, CO and Minneapolis, MN, exhibited the weakest results for the portfolio.
Revenue
New lease growth was -1.2%, weaker than the estimate, leading to blended growth of 1.5%, approximately 150 bps below the estimate.
Centerspace (CSR) vs. S&P 500 (SPY)
Market Cap
$1.13B
Dividend Yield4.71%
Average Volume (3M)83.71K
Price to Earnings (P/E)―
Beta (1Y)0.85
Revenue Growth-21.69%
EPS Growth-154.55%
CountryUS
Employees374
SectorReal Estate
Sector Strength69
IndustryREIT - Residential
Share Statistics
EPS (TTM)-1.27
Shares Outstanding16,726,595
10 Day Avg. Volume86,231
30 Day Avg. Volume83,708
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.09
Price to Cash Flow (P/CF)14.30
P/FCF Ratio31.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$74.14Price Target Upside16.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Centerspace Business Overview & Revenue Model
Company DescriptionCenterspace is an owner and operator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of June 30, 2021, Centerspace owned 62 apartment communities consisting of 11,579 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for 2021 by the Minneapolis Star Tribune. For more information, please visit www.centerspacehomes.com.
How the Company Makes MoneyCenterspace generates revenue primarily through the rental income it collects from its portfolio of multifamily housing properties. By leasing apartments to individual tenants, the company earns a steady stream of rental payments. Additionally, Centerspace may increase its earnings through property appreciation, which can lead to higher rental rates over time. The company also engages in the strategic acquisition and redevelopment of properties to enhance their value and appeal, potentially leading to increased occupancy rates and rental income. Partnerships with local developers and community organizations may further enhance property value and revenue potential. Centerspace's REIT structure allows it to distribute the majority of its taxable income as dividends to shareholders, providing an attractive income stream to investors.
Centerspace Financial Statement Overview
Summary
Centerspace exhibits moderate financial performance with strengths in cash flow generation and a solid gross profit margin. However, challenges in maintaining consistent profitability and managing high leverage are notable concerns. Continued focus on stabilizing income and managing debt will be crucial for future growth.Income Statement
Centerspace's revenue has shown modest growth over the years, yet there are notable fluctuations in profitability. The gross profit margin is strong, but the net income has been inconsistent, with recent losses impacting overall performance. EBIT and EBITDA margins have also seen volatility, reflecting operating challenges.60
Neutral
Balance Sheet
The balance sheet reveals a high level of debt relative to equity, indicating potential leverage risk. However, Centerspace maintains a decent equity ratio, suggesting a stable asset structure. Return on equity has been inconsistent due to fluctuating net income, impacting the overall financial stability.55
Neutral
Cash Flow
Centerspace demonstrates a positive trend in operating cash flow, which exceeds net income, indicating good cash generation. Free cash flow has also grown steadily, enhancing financial flexibility. Despite fluctuations in other areas, cash flow remains a relative strength for the company.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 260.98M | 261.31M | 256.72M | 201.71M | 177.99M | Gross Profit |
| 148.61M | 146.14M | 138.18M | 111.10M | 99.03M | EBIT |
| 20.48M | 84.45M | 13.86M | 2.72M | 8.34M | EBITDA |
| 130.74M | 188.83M | 121.62M | 122.06M | 85.59M | Net Income Common Stockholders |
| -10.69M | 41.97M | -15.02M | -31.38M | -24.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 12.03M | 8.63M | 10.46M | 31.27M | 392.00K | Total Assets |
| 1.91B | 1.93B | 2.03B | 1.94B | 1.46B | Total Debt |
| 346.88M | 916.02M | 1.01B | 856.05M | 719.19M | Net Debt |
| 334.85M | 907.39M | 997.17M | 824.78M | 718.80M | Total Liabilities |
| 1.01B | 978.78M | 1.07B | 918.45M | 774.80M | Stockholders Equity |
| 653.90M | 726.39M | 746.10M | 797.36M | 634.77M |
| Cash Flow | Free Cash Flow | |||
| 98.25M | 89.52M | 35.30M | 48.15M | 30.91M | Operating Cash Flow |
| 98.25M | 89.52M | 91.99M | 84.03M | 61.23M | Investing Cash Flow |
| -50.72M | 120.21M | -160.09M | -267.23M | -164.97M | Financing Cash Flow |
| -43.67M | -212.35M | 41.37M | 214.51M | 64.93M |
Centerspace Technical Analysis
Positive
63.72
Price Trends
62.42
Positive
64.89
Negative
66.80
Negative
Market Momentum
0.15
Negative
53.13
Neutral
51.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSR, the sentiment is Positive. The current price of 63.72 is above the 20-day moving average (MA) of 63.49, above the 50-day MA of 62.42, and below the 200-day MA of 66.80, indicating a neutral trend. The MACD of 0.15 indicates Negative momentum. The RSI at 53.13 is Neutral, neither overbought nor oversold. The STOCH value of 51.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CSR.
Centerspace Risk Analysis
Centerspace disclosed 51 risk factors in its most recent earnings report. Centerspace reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Centerspace Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $30.38B | 28.12 | 9.10% | 3.18% | 4.85% | 16.04% | |
71 Outperform | $20.38B | 26.51 | 13.53% | 3.20% | 6.29% | 82.88% | |
71 Outperform | $14.75B | 173.51 | 2.41% | 3.82% | 2.72% | -80.72% | |
69 Neutral | $27.93B | 26.27 | 9.36% | 3.78% | 3.80% | 24.08% | |
61 Neutral | $1.13B | ― | -1.53% | 4.71% | -21.69% | -154.55% | |
61 Neutral | $19.90B | 36.99 | 8.73% | 3.57% | 1.98% | -4.78% | |
61 Neutral | $4.71B | 17.93 | -2.95% | 11.44% | 6.38% | -21.59% |
* Real Estate Sector Average
Performance Comparison
CSR
Centerspace
63.72
10.00
18.62%
AVB
AvalonBay
213.58
36.49
20.61%
EQR
Equity Residential
71.38
11.63
19.46%
MAA
Mid-America Apartment
165.90
42.42
34.35%
ESS
Essex Property
306.00
72.48
31.04%
UDR
UDR
44.54
9.40
26.75%
Centerspace Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: 3.59% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Positive
CenterSpace has demonstrated strong financial performance and growth in resident satisfaction, along with strategic portfolio expansion and improvement. However, they face challenges with expense growth, supply pressure in key markets, and increased interest expenses. The highlights outweigh the lowlights, indicating an overall positive sentiment.Highlights
Strong Financial Performance
CenterSpace delivered $4.88 of core FFO per share for 2024, driven by sector-leading same-store NOI growth.
Portfolio Expansion and Improvement
Expansion included the acquisition of the Lydian in Denver and improvement in the leverage profile through the issuance of stock and redemption of Series B preferred shares.
Increased Resident Satisfaction
Resident satisfaction improved by 5.3%, with a 16% increase in five-star online reviews, contributing to a retention rate of 56.6%.
Dividend Increase
The board announced an increase to the quarterly dividend to $0.77 per share, reflecting confidence in the company's performance.
Occupancy and Revenue Growth
Same-store revenues increased by 3.1% in Q4 2024 compared to the same period in 2023, with occupancy increasing to 95.5%.
Cost Management and Efficiency
Favorable insurance renewal saw premiums decrease by 12%, and the company executed centralization initiatives to save costs.
Lowlights
Challenges in New Lease Trade-Outs
Same-store new lease trade-outs were down 3.3% in Q4 2024.
Expense Growth
Same-store expenses rose by 4.6% year-over-year, driven by higher controllable expenses, particularly in repairs and maintenance.
Supply Pressure in Key Markets
Supply pressure in Minneapolis and Denver affected new lease rates, with Denver's blended spreads down by 140 basis points.
Interest Expense Increase
The year-over-year interest expense increased due to debt assumed with the Lydian acquisition.
Company Guidance
During the CenterSpace Q4 2024 earnings call, the company provided guidance for 2025, highlighting several key metrics and strategic directions. CenterSpace anticipates a core Funds From Operations (FFO) of $4.98 per share at the midpoint for 2025, representing a 2% growth over the 2024 results. The guidance assumes same-store net operating income (NOI) growth of 2.25%, revenue growth of 2.5%, and expense growth of 3%. The company expects blended leasing spreads of 2.4%, maintaining 2024 occupancy levels. General and administrative (G&A) and property management expenses are projected to range between $27.9 million and $28.4 million, with interest expenses ranging from $38.8 million to $49 million. Capital expenditures are forecasted as value-add expenditures between $16 and $18 million and recurring CapEx per home averaging $1,150 per unit. CenterSpace plans to focus on enhancing their portfolio in the Mountain West and Midwest regions through potential acquisitions, operating partnership unit transactions, and mezzanine lending, while remaining vigilant about the cost of capital.Centerspace Corporate Events
Executive/Board ChangesShareholder Meetings
Centerspace Board Member Jeffrey Caira Announces Retirement
Neutral
Mar 13, 2025
On March 7, 2025, Jeffrey P. Caira, a member of Centerspace’s Board of Trustees, announced his decision to retire and not seek re-election at the upcoming Annual Meeting of Shareholders on May 14, 2025. Caira’s retirement marks a significant transition for the company, as he has played a crucial role in guiding Centerspace’s strategic focus towards multifamily operations since his appointment in 2015. The company has been actively refreshing its board, adding new members in 2024, which aligns with its ongoing commitment to growth and operational excellence.
Business Operations and StrategyFinancial Disclosures
Centerspace Unveils 2024 Financial Results and 2025 Outlook
Positive
Feb 28, 2025
On February 28, 2025, Centerspace released an investor presentation detailing its financial and operational results for the year ending December 31, 2024. The company reported growth in average rents despite economic volatility and outlined its strategic focus on increasing distributable cash flow and enhancing operational efficiencies. The presentation also highlighted Centerspace’s portfolio improvements since 2017, including strategic acquisitions and dispositions to optimize its market presence. The company’s financial outlook for 2025 includes guidance on revenue, expenses, and net income, with a focus on maintaining a strong balance sheet to support growth.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.