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Cubesmart (CUBE)
NYSE:CUBE
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Cubesmart
(NYSE:CUBE)76Outperform
Positive Factors
Financial Performance
CUBE trades at a lower price-to-funds from operations multiple than some peers, despite having a better balance sheet with a 4.1x debt-to-EBITDA ratio.
Growth Opportunities
CUBE bought out two joint ventures worth $610M and continues to have significant balance sheet capacity.
Negative Factors
Revenue Performance
The company's guidance for 2025 funds from operations per share missed the consensus estimate by 4.7%.
Cubesmart (CUBE) vs. S&P 500 (SPY)
Market Cap
$9.84B
Dividend Yield4.77%
Average Volume (3M)1.71M
Price to Earnings (P/E)24.9
Beta (1Y)0.85
Revenue Growth1.51%
EPS Growth-5.16%
CountryUS
Employees3,040
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)1.72
Shares Outstanding227,880,220
10 Day Avg. Volume2,416,176
30 Day Avg. Volume1,711,860
Financial Highlights & Ratios
PEG Ratio4.25
Price to Book (P/B)N/A
Price to Sales (P/S)9.18
Price to Cash Flow (P/CF)14.90
P/FCF Ratio13.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$46.80Price Target Upside9.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Cubesmart Business Overview & Revenue Model
Company DescriptionCubeSmart (CUBE) is a self-administered and self-managed real estate investment trust (REIT) focused on the ownership, operation, acquisition, and development of self-storage facilities in the United States. The company's primary service offering includes renting storage units to residential and commercial customers, providing a range of unit sizes and features to accommodate various storage needs. CubeSmart aims to deliver exceptional customer experiences through its strategically located facilities and high-quality service standards.
How the Company Makes MoneyCubeSmart generates revenue primarily through the rental of storage units to individuals and businesses. The company's key revenue streams include monthly rental fees collected from tenants for the use of storage spaces, which vary in size and amenities. Additional revenue is generated through ancillary services such as the sale of packing and moving supplies, tenant insurance programs, and administrative fees. CubeSmart also benefits from economies of scale and operational efficiencies derived from its large portfolio of properties, which helps optimize occupancy rates and rental income. Strategic partnerships and marketing initiatives further enhance the company's earnings by driving customer acquisition and retention.
Cubesmart Financial Statement Overview
Summary
Cubesmart maintains a strong financial position with consistent revenue growth and robust cash flow management. The absence of debt in 2024 enhances financial stability. However, the negative EBIT in 2024 indicates operational inefficiencies that require attention.Income Statement
Cubesmart has shown consistent revenue growth over the years, with a notable increase of 5.6% from 2022 to 2023. However, the EBIT margin experienced a significant decline due to negative EBIT in 2024, indicating operational challenges. Despite this, the net profit margin remains robust at 36.7% for 2024, driven by strong net income performance.75
Positive
Balance Sheet
The company's balance sheet is strong with a debt-free position in 2024, reflecting excellent financial stability. The equity ratio stands at 44.9%, indicating a solid capital structure primarily funded by equity. Return on equity is healthy at 13.6%, showcasing effective management in generating returns for shareholders.80
Positive
Cash Flow
Cubesmart has demonstrated strong cash flow management, with free cash flow growth of 3.3% from 2022 to 2023, and continued robust free cash flow of $631 million in 2024. The operating cash flow to net income ratio of 1.61 in 2023 highlights efficient cash generation relative to income.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.07B | 1.05B | 1.01B | 822.56M | 679.18M | Gross Profit |
| 748.48M | 755.55M | 716.36M | 570.46M | 455.54M | EBIT |
| -2.16M | 703.12M | 385.76M | 296.89M | 254.81M | EBITDA |
| 203.54M | 703.12M | 696.37M | 547.93M | 414.12M | Net Income Common Stockholders |
| 391.18M | 410.76M | 199.19M | 130.58M | 89.79M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 71.56M | 6.53M | 6.06M | 11.14M | 3.59M | Total Assets |
| 6.39B | 6.23B | 6.33B | 6.55B | 4.78B | Total Debt |
| 3.05B | 2.99B | 3.06B | 3.21B | 2.43B | Net Debt |
| -71.56M | 2.98B | 3.06B | 3.20B | 2.43B | Total Liabilities |
| 3.44B | 3.34B | 3.43B | 3.55B | 2.69B | Stockholders Equity |
| 2.87B | 2.80B | 2.83B | 2.87B | 1.83B |
| Cash Flow | Free Cash Flow | |||
| 631.07M | 611.14M | 550.23M | 414.58M | 301.18M | Operating Cash Flow |
| 631.07M | 611.14M | 591.47M | 449.19M | 351.03M | Investing Cash Flow |
| -173.96M | -93.82M | -48.77M | -1.85B | -511.44M | Financing Cash Flow |
| -387.67M | -518.03M | -547.09M | 1.41B | 108.20M |
Cubesmart Technical Analysis
Positive
42.76
Price Trends
41.83
Positive
44.56
Negative
45.77
Negative
Market Momentum
0.12
Negative
54.29
Neutral
66.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CUBE, the sentiment is Positive. The current price of 42.76 is above the 20-day moving average (MA) of 42.14, above the 50-day MA of 41.83, and below the 200-day MA of 45.77, indicating a neutral trend. The MACD of 0.12 indicates Negative momentum. The RSI at 54.29 is Neutral, neither overbought nor oversold. The STOCH value of 66.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CUBE.
Cubesmart Risk Analysis
Cubesmart disclosed 51 risk factors in its most recent earnings report. Cubesmart 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
Cubesmart Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $55.08B | 29.51 | 21.01% | 3.82% | 3.94% | -3.81% | |
76 Outperform | $9.84B | 24.94 | 13.80% | 4.77% | 1.51% | -5.16% | |
75 Outperform | $57.48M | 18.49 | 6.47% | 5.64% | 0.38% | 36.36% | |
74 Outperform | $34.81B | 39.00 | 6.02% | 4.12% | 27.21% | -18.39% | |
65 Neutral | $5.32B | 33.37 | 8.92% | 5.69% | -10.22% | -27.58% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
54 Neutral | $161.67M | ― | -60.51% | ― | 5.14% | -994.26% |
* Real Estate Sector Average
Performance Comparison
CUBE
Cubesmart
42.76
-0.77
-1.77%
EXR
Extra Space Storage
155.76
11.17
7.73%
PSA
Public Storage
313.60
31.28
11.08%
JYNT
Joint
10.79
-1.48
-12.06%
NSA
National Storage Affiliates
39.59
3.27
9.00%
SELF
Global Self Storage
5.10
1.12
28.14%
Cubesmart Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 0.54% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a cautiously optimistic outlook. While there are positive trends in narrowing occupancy gaps and improvements in rental rates, significant challenges persist, including a decline in NOI and expense pressures. The company has shown strength in strategic acquisitions and maintaining a strong dividend yield, yet remains cautious about the macroeconomic environment and its impact on future growth.Highlights
Narrowing Year-Over-Year Occupancy Gap
The year-over-year same-store occupancy gap has narrowed from 100 basis points negative at year-end 2024 to negative 50 basis points as of the end of February 2025.
Improvement in Rent for New Customer Rentals
Rents for new customer rentals improved from a year-over-year gap of negative 10.3% in Q4 2024 to negative 7.4% recently.
Successful Joint Venture Acquisition
CubeSmart successfully closed a joint venture by acquiring the partner's interest, bringing 28 stores onto their balance sheet, free of property-level debt.
Dividend Increase
Announced a 2% increase in quarterly dividend to an annualized $2.08 per share, translating to a 4.9% dividend yield.
Lowlights
Decline in Same-Store NOI
Same-store NOI declined 3.7% in the fourth quarter, with same-store revenue growth down 1.6% and occupancy levels dropping 120 basis points on average compared to last year.
Increase in Same-Store Expenses
Same-store expenses grew 4.7% during the quarter, driven largely by real estate taxes growing 17.5% over the prior year.
Challenges in Revenue Growth
There is no obvious catalyst for sharp reacceleration in organic growth for 2025, with guidance expecting a potential decline in same-store NOI by 3%.
Company Guidance
During CubeSmart's fourth quarter 2024 earnings call, guidance for 2025 was cautiously optimistic, with several key metrics highlighted. The company observed a narrowing year-over-year same-store occupancy gap from 100 basis points negative at the end of 2024 to 50 basis points negative by February 2025. Rents for new customer rentals improved their year-over-year gap from negative 10.3% in the fourth quarter to averaging negative 7.4% recently. Same-store NOI declined by 3.7% in the fourth quarter, while same-store revenue growth was negative 1.6%. For 2025, the company expects same-store NOI to decline by 3% at the midpoint of its guidance. Additionally, CubeSmart reported FFO per share as adjusted of $0.68 for the quarter and announced a 2% increase in its quarterly dividend to an annualized $2.08 per share. The company also completed notable acquisitions, including an 85% interest in a 14-store portfolio in the Dallas MSA and the remaining 80% interest in a joint venture known as HBP4, with a total consideration of $452.8 million for the latter. The guidance assumes a continued gradual improvement in key metrics, with no significant catalysts expected to sharply reaccelerate organic growth in 2025.Cubesmart Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
CubeSmart Announces New Equity Distribution Agreement
Positive
Mar 3, 2025
On March 3, 2025, CubeSmart entered into an Equity Distribution Agreement with several financial institutions, allowing the company to sell up to 13,510,817 common shares. This agreement replaces a previous program and aims to support CubeSmart’s financial strategies, including debt repayment and business expansion. The proceeds from these sales will be used for general business purposes, enhancing the company’s operational capabilities and market positioning.
M&A TransactionsBusiness Operations and Strategy
CubeSmart Highlights Strategic Achievements in March 2025
Positive
Mar 3, 2025
CubeSmart’s March 2025 investor presentation highlights its strategic achievements and market positioning, emphasizing its robust portfolio and strong industry fundamentals. The company has successfully executed strategic acquisitions and investments, enhancing its market leadership, particularly in New York City. CubeSmart’s focus on quality, cash flow stability, and customer diversification positions it well for sustained growth, with a disciplined investment strategy and a sophisticated operating platform that maximizes property cash flows.
DividendsBusiness Operations and StrategyFinancial Disclosures
CubeSmart Reports Decrease in 2024 Net Income
Negative
Feb 28, 2025
CubeSmart reported its fourth quarter and annual 2024 results, highlighting a decrease in net income and diluted EPS compared to the previous year. Despite a challenging self-storage environment, the company remains optimistic about 2025, citing stable self-storage fundamentals and strategic growth initiatives. Key activities included acquiring a significant interest in joint ventures and expanding its third-party management platform. The company also increased its quarterly dividend and reported a slight decrease in same-store net operating income due to increased expenses and decreased revenues.
Executive/Board Changes
CubeSmart Announces COO Joel Keaton’s Retirement Plans
Neutral
Jan 17, 2025
On January 17, 2025, CubeSmart announced the retirement of its Chief Operating Officer, Joel D. Keaton, effective April 30, 2025. Post-retirement, Keaton will serve as a non-employee consultant for up to a year, providing strategic guidance and transition services. His consultancy will be compensated at $100,000 per month initially, decreasing to $50,000 per month later, under an agreement that includes non-competition and non-solicitation clauses.
Business Operations and Strategy
CubeSmart Showcases Strategic Growth in Self-Storage Sector
Positive
Jan 7, 2025
CubeSmart’s latest investor presentation highlights its robust performance and strategic focus on quality investments to ensure long-term value creation. The company’s national scale and diversified portfolio, particularly its strong market presence in New York City, position it as a leader in the self-storage sector, with an emphasis on capturing demand and optimizing operations to maintain its competitive edge.
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.