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Howard Hughes Holdings (HHH)
NYSE:HHH
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Howard Hughes Holdings
(NYSE:HHH)
70Outperform
Positive Factors
Revenue Growth
Builder participation revenues increased by 76.8% to $16.9M, showing strong growth in this area.
Sales Performance
HHH sold 60 residential acres at $909k/acre, including 3.8 acres in Summerlin for $6.0M/acre, indicating strong sales performance.
Negative Factors
Market Uncertainty
No update was provided on Pershing Square's merger proposal, leaving uncertainty in the market.
Howard Hughes Holdings (HHH) vs. S&P 500 (SPY)
Market Cap
$3.70B
Dividend YieldN/A
Average Volume (3M)559.42K
Price to Earnings (P/E)18.5
Beta (1Y)1.46
Revenue Growth74.92%
EPS GrowthN/A
CountryUS
Employees608
SectorReal Estate
Sector Strength69
IndustryReal Estate
Share Statistics
EPS (TTM)3.95
Shares Outstanding50,405,100
10 Day Avg. Volume602,473
30 Day Avg. Volume559,418
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.22
Price to Cash Flow (P/CF)2.80
P/FCF Ratio3.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$91.33Price Target Upside25.42% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Howard Hughes Holdings Business Overview & Revenue Model
Company DescriptionThe Howard Hughes Corp. engages in the development and management of commercial, residential, and mixed-use real estate. It operates through the following segments: Operating Assets, Master Planned Communities; Seaport District; and Strategic Developments. The Operating Assets segment consists retail, office, hospitality, and multi-family properties along with other real estate investments. The Master Planned Communities segment focuses in the development and sale of land in large-scale, long-term community development projects in and around Las Vegas, Nevada; Houston, Texas; and Columbia, Maryland. The Seaport District operates an approximately 453,000 square feet of restaurant, retail, and entertainment properties situated in three primary locations in New York, New York: Pier 17, Historic Area/Uplands, and Tin Building. The Strategic Developments segment involves in the other real estate assets in the form of entitled and unentitled land and residential condominium developments. The company was founded on November 9, 2010 and is headquartered in Dallas, TX.
How the Company Makes MoneyHoward Hughes Holdings makes money through a multi-faceted revenue model primarily centered around real estate development and management. The company generates revenue from the sale of residential properties, leases of commercial and retail spaces, and management fees from its portfolio of properties. Additionally, HHH earns income through strategic partnerships and joint ventures with other developers and investors, leveraging its expertise in large-scale, master-planned community projects. The company's earnings are significantly influenced by market demand for real estate in its target areas and its ability to effectively manage and enhance property values over time.
Howard Hughes Holdings Financial Statement Overview
Summary
Howard Hughes Holdings has shown strong recovery with significant revenue growth and a return to profitability in 2024. High debt levels pose a risk, but improved cash flow and equity stability are positive indicators.Income Statement
Howard Hughes Holdings has shown a remarkable increase in revenue from $1.02 billion in 2023 to $1.75 billion in 2024, indicating strong growth. Gross profit margins have improved significantly, and the transition from a net loss in 2023 to a net income of $197.7 million in 2024 demonstrates a turnaround. However, EBIT and EBITDA margins are still lower compared to earlier years, reflecting ongoing challenges in operational efficiency.72
Positive
Balance Sheet
The company has a relatively high debt-to-equity ratio due to significant debt levels, which could pose risks in a rising interest rate environment. However, the equity ratio remains stable, indicating a reasonable level of equity funding. Return on equity has improved as the company returned to profitability, enhancing shareholder value.65
Positive
Cash Flow
Howard Hughes Holdings has improved its free cash flow significantly from negative figures in 2023 to a healthy $447.8 million in 2024. The operating cash flow to net income ratio is strong, indicating efficient cash generation relative to profit. This turnaround in cash flow provides a solid foundation for future investments and debt reduction.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.75B | 1.02B | 1.61B | 1.43B | 699.49M | Gross Profit |
| 731.95M | 433.97M | 633.62M | 500.01M | 201.98M | EBIT |
| 559.92M | -528.21M | 369.13M | 241.87M | -119.56M | EBITDA |
| 710.44M | -342.20M | 556.39M | 399.26M | 358.20M | Net Income Common Stockholders |
| 197.70M | -551.77M | 184.53M | 56.10M | -26.15M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 596.08M | 631.55M | 626.65M | 843.21M | 1.01B | Total Assets |
| 9.21B | 9.58B | 9.60B | 9.58B | 9.14B | Total Debt |
| 5.13B | 5.35B | 4.80B | 4.66B | 4.36B | Net Debt |
| 4.54B | 4.72B | 4.17B | 3.82B | 3.34B | Total Liabilities |
| 6.37B | 6.52B | 6.00B | 5.85B | 5.43B | Stockholders Equity |
| 2.78B | 2.99B | 3.54B | 3.71B | 3.71B |
| Cash Flow | Free Cash Flow | |||
| 447.75M | -265.82M | 323.25M | -285.77M | -74.48M | Operating Cash Flow |
| 447.75M | -258.48M | 325.25M | -283.96M | -72.87M | Investing Cash Flow |
| -300.79M | -336.14M | -220.69M | 101.46M | -428.55M | Financing Cash Flow |
| -150.35M | 548.75M | -222.26M | 156.14M | 1.12B |
Howard Hughes Holdings Technical Analysis
Negative
72.82
Price Trends
75.86
Negative
78.18
Negative
73.67
Negative
Market Momentum
-0.47
Positive
41.74
Neutral
13.70
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HHH, the sentiment is Negative. The current price of 72.82 is below the 20-day moving average (MA) of 75.53, below the 50-day MA of 75.86, and below the 200-day MA of 73.67, indicating a bearish trend. The MACD of -0.47 indicates Positive momentum. The RSI at 41.74 is Neutral, neither overbought nor oversold. The STOCH value of 13.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HHH.
Howard Hughes Holdings Risk Analysis
Howard Hughes Holdings disclosed 42 risk factors in its most recent earnings report. Howard Hughes Holdings 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
Howard Hughes Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $62.32B | 22.67 | 80.78% | 4.90% | 5.40% | 8.57% | |
72 Outperform | $8.61B | 29.61 | 9.58% | 4.39% | 6.21% | 22.32% | |
71 Outperform | $13.49B | 35.00 | 5.82% | 3.67% | 10.15% | 3.36% | |
70 Outperform | $8.05B | 23.97 | 11.61% | 4.14% | 3.41% | 10.54% | |
70 Outperform | $3.70B | 18.55 | 7.91% | ― | 74.92% | ― | |
63 Neutral | $14.45B | 38.79 | 4.03% | 4.56% | 14.51% | -45.53% | |
61 Neutral | $4.74B | 19.16 | -3.00% | 7.93% | 6.45% | -20.78% |
* Real Estate Sector Average
Performance Comparison
HHH
Howard Hughes Holdings
72.82
0.94
1.31%
KIM
Kimco Realty
20.62
2.11
11.40%
REG
Regency Centers
73.71
14.77
25.06%
SPG
Simon Property
163.48
20.15
14.06%
FRT
Federal Realty
98.28
0.17
0.17%
BRX
Brixmor Property
25.80
4.02
18.46%
Howard Hughes Holdings Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -1.73% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance across multiple segments, with record results in MPC EBT and operating asset NOI. However, challenges such as a decline in commercial land sales, expected short-term reductions in retail NOI, and tenant vacancies in office spaces were noted. The company's strategic initiatives and financing achievements indicate a positive outlook for 2025.Highlights
Record MPC Earnings Before Taxes
The company achieved a record MPC EBT of $349 million, exceeding guidance by $19 million and surpassing 2023's record results by 2%.
Strong Operating Asset NOI Growth
Operating assets delivered record NOI of $257 million, marking a 6% increase year over year, with multifamily NOI growing by 13% over the prior year.
Successful Condo Sales
Victoria Place in Hawaii was sold out, generating record condo revenue of $779 million with a gross margin of 27%.
Significant Financing Achievements
Over $860 million in financings were executed, including two significant condo construction loans totaling $680 million.
Anticipated Strong Performance in 2025
The company projects another strong year in its MPC segment with expected growth in residential land sales and increased custom lot sales.
Lowlights
Commercial Land Sales Decline
There was a $34 million year-over-year decline in commercial land sales, impacting overall MPC performance.
Potential Short-term NOI Reduction in Retail
Retail NOI is expected to see a modest reduction in 2025 due to nonrecurring collection of tenant reserves and ongoing tenant upgrades.
Office Space Vacancies
There were some tenant vacancies at various properties in The Woodlands and downtown Columbia, impacting office NOI.
Impact of Seaport Entertainment Spin-off
The Seaport Entertainment spin-off and related activities used up approximately $170 million of adjusted operating cash flow in 2024.
Company Guidance
During Howard Hughes Holdings Inc.'s fourth quarter 2024 earnings call, the company provided a comprehensive review of its performance and 2025 guidance. The call highlighted record Master Planned Community (MPC) earnings before taxes (EBT) of $349 million, driven by record residential land sales revenue and an average price per acre. Operating assets delivered a record net operating income (NOI) of $257 million, marking a 6% year-over-year increase. For 2025, the company expects MPC EBT to grow by 5% to 10%, with a projected midpoint of $375 million, while operating asset NOI is anticipated to be flat to up 4%, reaching approximately $262 million. Condo sales revenue is projected to be around $375 million, with no gross profit expected from the sold-out Ulana workforce housing project. The company also introduced a new guidance metric, adjusted operating cash flows, expected to range between $320 million and $375 million, with a midpoint of $350 million for 2025. Howard Hughes Holdings reported a strong liquidity position, with $596 million in cash and over $900 million in available liquidity, reinforcing its ability to fund development projects and strategic initiatives.Howard Hughes Holdings Corporate Events
Business Operations and Strategy
Howard Hughes Rejects Pershing Square’s Proposal
Neutral
Mar 3, 2025
On March 3, 2025, Howard Hughes Holdings Inc. announced that its Special Committee has rejected a proposal from Pershing Square Capital Management L.P. received on February 13, 2025, deeming it unacceptable in its current form. The company has entered into a standstill agreement with Pershing Square to explore potential alternatives, which will last until March 13, 2025, unless extended. The outcome of these discussions is uncertain, and the company has stated it will not provide further comments unless necessary. Morgan Stanley & Co. LLC is advising the Special Committee, with legal counsel from Hogan Lovells US LLP and Richards, Layton & Finger, P.A.
Business Operations and StrategyFinancial Disclosures
Howard Hughes Holdings Reports Record 2024 Financial Results
Positive
Feb 26, 2025
Howard Hughes Holdings Inc. reported record financial results for the fourth quarter and full year of 2024, with significant increases in net income and earnings before taxes across its segments. The company achieved record sales in its Master Planned Community segment and strong leasing performance in its Operating Assets segment, while also completing the spinoff of Seaport Entertainment Group to focus more on real estate operations. Looking ahead, the company anticipates continued growth in 2025, driven by strong homebuilder demand and strategic developments, including potential new residential entitlements in Ward Village, Hawai’i.
M&A Transactions
Howard Hughes Receives Revised Acquisition Proposal
Neutral
Feb 19, 2025
On February 18, 2025, Howard Hughes Holdings Inc. confirmed the receipt of a revised unsolicited acquisition proposal from Pershing Square Capital Management L.P. The proposal, which replaces an initial proposal submitted on January 13, 2025, was discussed in a meeting on February 13, 2025, between Pershing Square and a Special Committee formed by the Howard Hughes Board of Directors. The Special Committee has not yet engaged in negotiations or made any determinations regarding the proposal, and no action is required from stockholders at this time. The proposal is contingent upon a definitive agreement and approvals from the Special Committee and the HHH Board of Directors.
M&A Transactions
Howard Hughes Receives Acquisition Proposal from Pershing Square
Neutral
Jan 13, 2025
Howard Hughes Holdings Inc. has received an unsolicited acquisition proposal from Pershing Square Capital Management to acquire more shares and potentially take majority control. A Special Committee of independent directors will evaluate the proposal, with no immediate action required from shareholders. The transaction’s completion is contingent upon negotiations, a definitive agreement, and approval from shareholders unaffiliated with Pershing Square. The outcome remains uncertain, and Howard Hughes does not plan to make further comments unless necessary.
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.