Cubesmart (CUBE) AI Stock Analysis

• Market Cap: $8.68B
• Dividend Yield: 5.44%
• Average Volume (3M): 2.03M
• Price to Earnings (P/E): 21.9
• Beta (1Y): 0.67
• Revenue Growth: 1.51%
• EPS Growth: -5.16%
• Country: US
• Employees: 3,104
• Sector: Real Estate
• Sector Strength: 70
• Industry: REIT - Industrial
• EPS (TTM): 1.72
• Shares Outstanding: 228,933,150
• 10 Day Avg. Volume: 2,472,821
• 30 Day Avg. Volume: 2,032,227
• PEG Ratio: 4.25
• Price to Book (P/B): N/A
• Price to Sales (P/S): 8.89
• Price to Cash Flow (P/CF): 14.40
• P/FCF Ratio: 13.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $45.45
• Price Target Upside: 20.56% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

Cubesmart's overall stock score reflects its solid financial foundation and strategic initiatives, which are tempered by operational challenges. The company's debt-free status and strong cash flow are major strengths, supporting future investments. However, negative EBIT and declines in NOI signal areas needing improvement. Technical indicators show moderate momentum, while valuation metrics and recent corporate events underscore potential for growth.

Positive Factors

Acquisition Momentum

CUBE noted momentum in its search for accretive acquisitions, even leading it to raise a modest amount of equity.

Balance Sheet Strength

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.

Guidance and Expectations

4Q24 adjusted FFO guidance was initiated above the Street's expectations.

Negative Factors

Earnings Guidance Miss

The company's guidance for 2025 funds from operations per share missed the consensus estimate by 4.7%.

Market Hesitation

The market may be slightly hesitant to give credit for an implied rebound in 4Q.

Revenue Growth Concerns

The company is assuming same-store net operating income growth of -3% and same-store revenue growth of -1% year-over-year, which is weaker than expected.

Cubesmart Business Overview & Revenue Model

Company Description

CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and secure storage space for residential and commercial customers. According to the 2020 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.

How the Company Makes Money

CubeSmart 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 has a robust financial position with consistent revenue growth, strong cash flow management, and a debt-free status in 2024. However, the negative EBIT indicates operational challenges that need addressing.

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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 37.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CUBE, the sentiment is Negative. The current price of 37.7 is below the 20-day moving average (MA) of 40.30, below the 50-day MA of 41.02, and below the 200-day MA of 45.11, indicating a bearish trend. The MACD of -1.05 indicates Positive momentum. The RSI at 38.72 is Neutral, neither overbought nor oversold. The STOCH value of 39.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CUBE.

Cubesmart Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PSA	77 Outperform	$49.18B	26.35	21.01%	4.28%	3.94%	-3.81%
CUBE	73 Outperform	$8.68B	21.89	13.80%	5.44%	1.51%	-5.16%
EXR	71 Outperform	$29.66B	33.20	6.02%	4.84%	27.21%	-18.39%
SELF	66 Neutral	$55.90M	26.36	4.36%	5.88%	2.79%	-28.56%
NSA	64 Neutral	$4.66B	29.15	8.92%	6.54%	-10.22%	-27.58%
Sector *	61 Neutral	$4.24B	15.87	-3.65%	12.20%	6.29%	-21.37%
COLD	52 Neutral	$5.48B	―	-2.73%	4.63%	-0.25%	72.06%

Cubesmart Corporate Events

CubeSmart Announces New Equity Distribution Agreement

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.

CubeSmart Highlights Strategic Achievements in March 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.

CubeSmart Reports Decrease in 2024 Net Income

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.

CubeSmart Announces COO Joel Keaton’s Retirement Plans

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.