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NexPoint Residential Trust Inc (NXRT)
NYSE:NXRT
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NexPoint Residential
(NYSE:NXRT)
60Neutral
Positive Factors
Financial Performance
The company reported a core FFO number that was three cents higher than consensus estimates.
Liquidity
NXRT is in a strong liquidity position with approximately $23.1 million of cash and cash equivalents and $350 million free and clear under its credit facility.
Shareholder Returns
The Board approved an increase in the quarterly dividend of 10.3% from the previous dividend.
Negative Factors
Debt Management
The refinancing reduced the company's weighted average interest rate and extended the weighted average debt maturity, reducing near-term refinancing pressure.
NexPoint Residential (NXRT) vs. S&P 500 (SPY)
Market Cap
$1.01B
Dividend Yield4.85%
Average Volume (3M)150.81K
Price to Earnings (P/E)923.9
Beta (1Y)1.23
Revenue Growth-6.42%
EPS Growth-98.33%
CountryUS
Employees2
SectorReal Estate
Sector Strength73
IndustryREIT - Residential
Share Statistics
EPS (TTM)>-0.01
Shares Outstanding25,774,730
10 Day Avg. Volume186,805
30 Day Avg. Volume150,805
Financial Highlights & Ratios
PEG Ratio0.40
Price to Book (P/B)N/A
Price to Sales (P/S)3.71
Price to Cash Flow (P/CF)37.50
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$43.00Price Target Upside8.78% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
NexPoint Residential Business Overview & Revenue Model
Company DescriptionNexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol NXRT, primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with value-add potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of NexPoint Advisors, L.P., an SEC-registered investment advisor, which has extensive real estate experience.
How the Company Makes MoneyNexPoint Residential makes money through rental income generated from its portfolio of multifamily properties. The company focuses on acquiring undervalued properties where it can implement value-add strategies such as renovations and operational improvements to increase occupancy rates and rental income. By enhancing the properties, NXRT can charge higher rents, thereby boosting its overall revenue. Additionally, the company may engage in strategic property sales when market conditions are favorable, realizing capital gains that contribute to its earnings. NXRT's revenue model is heavily reliant on effective property management and maintaining high occupancy levels to ensure a steady stream of rental income.
NexPoint Residential Financial Statement Overview
Summary
NexPoint Residential shows inconsistent profitability with strong operational margins but weak cash flow management. The equity position is strong, but the lack of debt sustainability without cash flow improvements is concerning.Income Statement
NexPoint Residential has shown inconsistent revenue growth, with a slight decline in 2024, following growth in previous years. The gross profit margin in 2024 was strong at approximately 84.41%, but the net profit margin was low due to significantly reduced net income. Additionally, the EBIT and EBITDA margins were reasonable, indicating operational efficiency, although net income fluctuations point to volatility in profitability.65
Positive
Balance Sheet
The company maintains a relatively strong equity position with a debt-to-equity ratio of 0 for 2024, indicating no debt burden, which is positive. However, the equity ratio decreased to about 21.51%, reflecting potential vulnerability to asset value fluctuations. The return on equity is low due to minimal net income, suggesting limited profitability relative to equity.70
Positive
Cash Flow
NexPoint Residential's cash flow statement indicates challenges, with zero operating and free cash flow in 2024, a significant drop from previous years. This raises concerns about cash management and operational cash generation. Historical free cash flow to net income ratios were omitted due to zero values, highlighting potential short-term liquidity issues.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 259.70M | 277.53M | 263.95M | 219.24M | 204.80M |
| Gross Profit | ||||
| 219.16M | 167.13M | 159.07M | 131.02M | 119.65M |
| EBIT | ||||
| 83.56M | 113.18M | 32.84M | 19.83M | 15.34M |
| EBITDA | ||||
| 202.99M | 250.01M | 130.49M | 151.30M | 165.13M |
| Net Income Common Stockholders | ||||
| 1.11M | 44.26M | -64.80M | -23.21M | -2.51M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 23.15M | 12.37M | 16.76M | 49.45M | 24.46M |
| Total Assets | ||||
| 1.91B | 2.11B | 2.23B | 2.06B | 1.83B |
| Total Debt | ||||
| 1.46B | 1.48B | 1.60B | 1.55B | 1.35B |
| Net Debt | ||||
| 1.44B | 1.46B | 1.58B | 1.51B | 1.32B |
| Total Liabilities | ||||
| 1.49B | 1.61B | 1.70B | 1.59B | 1.42B |
| Stockholders Equity | ||||
| 410.37M | 494.62M | 519.67M | 469.85M | 407.93M |
| Cash Flow | Free Cash Flow | |||
| 73.57M | 96.58M | 79.10M | 73.27M | 57.23M |
| Operating Cash Flow | ||||
| 73.57M | 96.58M | 79.10M | 73.27M | 57.23M |
| Investing Cash Flow | ||||
| 130.62M | 51.92M | -162.30M | -235.91M | 11.50M |
| Financing Cash Flow | ||||
| -195.55M | -155.02M | 46.31M | 194.32M | -82.90M |
NexPoint Residential Technical Analysis
Positive
39.53
Price Trends
39.18
Positive
41.05
Negative
41.27
Negative
Market Momentum
-0.20
Negative
53.40
Neutral
77.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NXRT, the sentiment is Positive. The current price of 39.53 is above the 20-day moving average (MA) of 39.12, above the 50-day MA of 39.18, and below the 200-day MA of 41.27, indicating a neutral trend. The MACD of -0.20 indicates Negative momentum. The RSI at 53.40 is Neutral, neither overbought nor oversold. The STOCH value of 77.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NXRT.
NexPoint Residential Risk Analysis
NexPoint Residential disclosed 80 risk factors in its most recent earnings report. NexPoint Residential 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
NexPoint Residential 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 | $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% | |
69 Neutral | $13.06B | 81.44 | 3.38% | 3.37% | 0.55% | -59.48% | |
61 Neutral | $19.90B | 36.99 | 8.73% | 3.57% | 1.98% | -4.78% | |
61 Neutral | $4.70B | 17.65 | -3.00% | 11.43% | 5.99% | -19.07% | |
60 Neutral | $1.01B | 923.88 | 0.25% | 4.85% | -6.42% | -98.33% |
* Real Estate Sector Average
Performance Comparison
NXRT
NexPoint Residential
39.53
9.41
31.24%
AVB
AvalonBay
214.62
38.98
22.19%
EQR
Equity Residential
71.58
12.41
20.97%
MAA
Mid-America Apartment
167.58
44.10
35.71%
UDR
UDR
45.17
10.03
28.54%
CPT
Camden Property
122.30
29.21
31.38%
NexPoint Residential Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 2.81% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strategic refinancing and value-add program success, but was overshadowed by a significant net loss, decreased NOI, and occupancy challenges in key markets. The sentiment reflects mixed financial performance with some operational strengths.Highlights
Successful Refinancing Activity
NexPoint Residential Trust, Inc. completed refinancing activities that extended the company's weighted average debt maturity schedule to seven years and reduced the adjusted weighted average interest rate from 3.64% to 2.96%.
Strong Value-Add Program Returns
The company completed 58 full and partial renovations in Q4 2024, achieving an average monthly rent premium of $150 and a 19.2% return on investment. Inception to date, various upgrades have resulted in return on investments ranging from 20.8% to 64.8%.
Dividend and Core FFO Coverage
The dividend was 1.47x covered by core FFO for 2024 with a payout ratio of 68% of core FFO. Since inception, the dividend has increased by 147.6%.
Lowlights
Decreased Net Operating Income (NOI)
Net operating income for Q4 2024 was $38.9 million, a decrease of 7.6% compared to $42.2 million in Q4 2023. For the full year, NOI decreased by 6.2% compared to 2023.
Net Loss in Q4 2024
The company reported a net loss of $26.9 million or $1.06 per diluted share for Q4 2024, compared to a net income of $18.4 million or $0.70 per diluted share in Q4 2023.
Challenging Same-Store NOI Growth
For Q4 2024, same-store NOI decreased by 40 basis points. The full year 2024 same-store revenue increased by 2%, but same-store NOI only improved by 90 basis points.
Occupancy Challenges in Raleigh-Durham
The Raleigh-Durham market experienced a 290 basis point decrease in occupancy due to pressures in the Morrisville submarket and personnel changes.
Company Guidance
In the earnings call for NexPoint Residential Trust, Inc., the company provided detailed guidance for 2025. For core FFO per diluted share, they projected a range from $2.56 to $2.83, with a midpoint of $2.70. They forecasted same-store revenue to increase by 1.3% on the high end and decrease by 20 basis points on the low end, resulting in a midpoint increase of 50 basis points. Same-store expenses are anticipated to rise by 2.4% to 4.9%, with a midpoint increase of 3.7%. Consequently, same-store NOI is expected to range from a 50 basis point increase to a 3.5% decrease, with a midpoint decrease of 1.5%. The company also plans to complete 425 full interior upgrades, generating a $269 average monthly rent premium, among other strategic enhancements to drive growth. They highlighted that their current liquidity stands at $373 million, and they have no meaningful debt maturities until 2027.NexPoint Residential Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
NexPoint Residential Appoints New CFO Amid Leadership Shift
Neutral
Dec 27, 2024
NexPoint Residential Trust has announced a leadership transition, with Paul Richards appointed as the new Chief Financial Officer and principal financial officer effective January 1, 2025, following the resignation of Brian Mitts. This change is expected to influence the company’s financial management and operations as Richards brings experience from various affiliated real estate and finance positions, potentially impacting stakeholders by aligning the company’s strategic financial direction with its broader real estate and asset management objectives.
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.