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Postal Realty Trust Inc (PSTL)
NYSE:PSTL
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Postal Realty
(NYSE:PSTL)
78Outperform
Positive Factors
Financial Performance
The company reported FFO number was seven cents higher than consensus estimates and represents an 8.4% increase year-over-year.
Lease Agreements
Positive resolution with the USPS regarding 95% of total 2023 lease expirations and 99% of 2024 expirations at a 3% annual cash escalation.
Negative Factors
USPS Privatization Uncertainty
There have been reports of the possible privatization of the Post Office, which could cause some uncertainty in future cash flows.
Postal Realty (PSTL) vs. S&P 500 (SPY)
Market Cap
$406.73M
Dividend Yield6.83%
Average Volume (3M)198.23K
Price to Earnings (P/E)66.1
Beta (1Y)0.45
Revenue Growth19.87%
EPS Growth81.71%
CountryUS
Employees46
SectorReal Estate
Sector Strength74
IndustryREITs
Share Statistics
EPS (TTM)0.21
Shares Outstanding23,556,545
10 Day Avg. Volume203,760
30 Day Avg. Volume198,227
Financial Highlights & Ratios
PEG Ratio0.81
Price to Book (P/B)N/A
Price to Sales (P/S)4.34
Price to Cash Flow (P/CF)9.00
P/FCF Ratio6.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.44Price Target Upside8.50% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Postal Realty Business Overview & Revenue Model
Company DescriptionPostal Realty Trust, Inc. is an internally managed real estate corporation. It owns and manages properties leased to the United States Postal Service (USPS). The company was founded in November 2018 and is headquartered in Cedarhurst, NY.
How the Company Makes MoneyPostal Realty Trust, Inc. generates revenue primarily through rental income from its portfolio of properties leased to the USPS. As a REIT, the company is required to distribute a majority of its taxable income to shareholders in the form of dividends. PSTL's earnings are influenced by its strategic acquisition of postal properties, lease agreements with USPS, and efficient property management. The company's revenue model benefits from the stability and reliability of USPS as a tenant, given its significant role in national infrastructure. Additionally, PSTL may engage in property management services for third-party owners of postal properties, contributing to its earnings.
Postal Realty Financial Statement Overview
Summary
Postal Realty demonstrates strong revenue growth and a solid balance sheet with no debt. Despite robust cash generation, a decline in EBITDA margins suggests potential operational improvement areas. Overall, the company shows financial stability and profitability.Income Statement
Postal Realty has demonstrated strong revenue growth, with a 19.9% increase from 2023 to 2024. The company maintains a healthy gross profit margin of 87.1% and a net profit margin of 8.6% for 2024. The EBIT margin is also strong at 27.7%, indicating efficient operations. However, the EBITDA margin decreased from 52.9% in 2023 to 21.8% in 2024, which is a point of concern.85
Very Positive
Balance Sheet
Postal Realty exhibits a robust balance sheet with no total debt in 2024, significantly improving the debt-to-equity ratio to 0. The equity ratio is strong at 38.8%, and the return on equity (ROE) is healthy at 2.6% for 2024. The substantial increase in stockholders' equity indicates a solid financial position.90
Very Positive
Cash Flow
The company's free cash flow grew by 31% from 2023 to 2024, showcasing strong cash generation capabilities. The operating cash flow to net income ratio is impressive at 5.1, reflecting efficient cash management. However, the free cash flow to net income ratio of 5.1 suggests there is room for improvement in converting profits into cash.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 76.37M | 63.71M | 53.33M | 39.94M | 24.68M | Gross Profit |
| 57.40M | 48.34M | 40.54M | 30.55M | 19.66M | EBIT |
| 21.18M | 14.00M | 9.70M | 5.92M | 1.79M | EBITDA |
| 42.68M | 33.68M | 27.86M | 19.40M | 10.96M | Net Income Common Stockholders |
| 6.60M | 3.71M | 3.85M | 2.06M | -640.88K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.80M | 2.23M | 1.50M | 5.86M | 2.21M | Total Assets |
| 646.82M | 567.35M | 501.30M | 377.72M | 258.88M | Total Debt |
| 296.71M | 240.62M | 196.66M | 95.35M | 124.63M | Net Debt |
| 294.91M | 238.39M | 195.17M | 89.49M | 122.42M | Total Liabilities |
| 329.32M | 265.72M | 217.59M | 112.24M | 139.25M | Stockholders Equity |
| 251.28M | 243.56M | 229.23M | 220.04M | 91.99M |
| Cash Flow | Free Cash Flow | |||
| 33.50M | 25.56M | 20.90M | 15.20M | 8.43M | Operating Cash Flow |
| 33.50M | 28.43M | 24.59M | 17.09M | 9.40M | Investing Cash Flow |
| -79.15M | -72.61M | -120.15M | -106.72M | -126.15M | Financing Cash Flow |
| 45.32M | 45.01M | 90.57M | 93.39M | 106.84M |
Postal Realty Technical Analysis
Positive
14.23
Price Trends
13.14
Positive
13.40
Positive
13.45
Positive
Market Momentum
0.32
Negative
62.19
Neutral
61.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSTL, the sentiment is Positive. The current price of 14.23 is above the 20-day moving average (MA) of 13.53, above the 50-day MA of 13.14, and above the 200-day MA of 13.45, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 62.19 is Neutral, neither overbought nor oversold. The STOCH value of 61.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PSTL.
Postal Realty Risk Analysis
Postal Realty disclosed 79 risk factors in its most recent earnings report. Postal Realty 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
Postal Realty 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 | $50.54B | 56.91 | 2.40% | 5.61% | 29.49% | -22.38% | |
78 Outperform | $406.73M | 66.13 | 1.94% | 6.83% | 19.87% | 81.71% | |
78 Outperform | $5.80B | 26.86 | 6.21% | 3.77% | 24.84% | -6.90% | |
73 Outperform | $106.32B | 27.55 | 6.97% | 3.48% | 2.22% | 23.71% | |
72 Outperform | $13.71B | 29.50 | 5.38% | 5.66% | -9.09% | -36.58% | |
68 Neutral | $6.88B | 34.89 | 5.53% | 4.23% | 8.41% | -2.96% | |
61 Neutral | $4.76B | 18.33 | -3.11% | 9.66% | 6.25% | -20.78% |
* Real Estate Sector Average
Performance Comparison
PSTL
Postal Realty
14.23
1.21
9.29%
PLD
Prologis
111.89
-13.13
-10.50%
O
Realty Income
56.69
7.32
14.83%
STAG
Stag Industrial
35.45
-0.19
-0.53%
WPC
W. P. Carey Inc.
62.66
10.56
20.27%
EPRT
Essential Properties Realty
31.70
7.28
29.81%
Postal Realty Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: 14.57% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call highlights robust financial and operational performance, with increased AFFO, strong leasing, and strategic acquisitions. While there are concerns regarding potential Postal Service cost-cutting measures and increasing G&A expenses, these are not expected to significantly impact the company's core operations.Highlights
Improved AFFO and Guidance
AFFO per share increased by 8.4% year over year to $1.16, surpassing Street consensus by over 9%. Guidance for 2025 AFFO per share is projected between $1.20 and $1.22.
Strong Leasing Performance
Releasing performance improved due to a streamlined process with the Postal Service, resulting in a 99.8% occupancy rate and an average lease retention rate of 99% over ten years.
Strategic Acquisitions and Dispositions
Acquired 197 properties for $91 million at a 7.6% cap rate, with expectations of $80-$90 million in acquisitions for 2025. Sold two properties for $6.3 million, realizing significant profit.
Stable Financial Position
The company maintained a low leverage with a net debt to annualized adjusted EBITDA ratio of 5.2 times and a weighted average interest rate of 4.35%.
Dividend and Stock Repurchase
The quarterly dividend increased by 1% from Q4 2023, marking the seventh consecutive year of dividend growth. A $25 million stock repurchase program was approved.
Lowlights
Potential Postal Service Facility Reductions
The Postal Service announced plans to save $36 billion over ten years, which includes eliminating unnecessary facilities, though it's believed to not impact the postal facilities in the company's portfolio.
Increased G&A Expenses
Projected cash G&A expenses for 2025 are expected to rise to between $10.5 and $11 million, impacting the growth rate of AFFO.
Company Guidance
During the Postal Realty Trust's fourth-quarter 2024 earnings call, the company provided several key metrics and forward-looking guidance. The full-year adjusted funds from operations (AFFO) per share was reported at $1.16, marking an 8.4% year-over-year increase and exceeding the initial Street consensus by over 9%. The company updated its 2025 AFFO guidance, projecting a range of $1.20 to $1.22 per share. The same-store cash net operating income (NOI) for 2025 is expected to grow between 4% and 6%, an increase from the previous guidance of at least 3%. In 2024, Postal Realty Trust acquired 197 properties valued at $91 million, with a weighted average cap rate of 7.6%, and plans to continue acquisitions in 2025 with a target volume of $80 to $90 million. The company announced a quarterly dividend of $0.2425 per share, a 1% increase from the previous year. As of year-end, the net debt to annualized adjusted EBITDA ratio stood at 5.2 times, with 95% of borrowings on fixed rates and no significant debt maturities until 2027. The company is also implementing a common stock repurchase program for up to $25 million, reflecting its strategic commitment to shareholder value.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.