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Whitestone Reit (WSR)
:WSR
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Whitestone REIT
(NYSE:WSR)72Outperform
Positive Factors
Debt Management
Management has diligently chipped away at its leverage ratio, measured by debt/EBITDA, as the year ended at the lower end of guidance, while the ratio has declined significantly since management took the helm.
Dividend Increase
Whitestone declared a dividend of $0.135 per share for the first quarter of 2025, representing a 9% increase from the previous dividend.
Negative Factors
Financial Guidance
WSR's guidance falls below estimates and consensus, impacting its financial outlook.
Whitestone REIT (WSR) vs. S&P 500 (SPY)
Market Cap
$711.58M
Dividend Yield3.5%
Average Volume (3M)203.71K
Price to Earnings (P/E)19.5
Beta (1Y)1.12
Revenue Growth4.22%
EPS Growth-44.56%
CountryUS
Employees79
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)0.71
Shares Outstanding50,690,163
10 Day Avg. Volume256,351
30 Day Avg. Volume203,708
Financial Highlights & Ratios
PEG Ratio0.22
Price to Book (P/B)N/A
Price to Sales (P/S)4.69
Price to Cash Flow (P/CF)10.90
P/FCF Ratio18.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.00Price Target Upside13.88% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Whitestone REIT Business Overview & Revenue Model
Company DescriptionWhitestone REIT is a real estate company, which acquires, owns, manages, develops, and redevelops commercial properties in the markets of major metropolitan areas. The company was founded on August 20, 1998 and is headquartered in Houston, TX.
How the Company Makes MoneyWhitestone REIT generates revenue primarily through leasing its properties to a diverse mix of tenants, which include retailers, restaurants, and service providers. The company earns income from rental payments made by its tenants, which are typically structured as long-term leases. Additionally, Whitestone REIT may also benefit from lease escalations, percentage rents based on a tenant's sales, and fees related to property management services. The company's revenue model is supported by its strategic focus on high-growth markets, which helps in maintaining high occupancy rates and attracting a stable tenant base. Furthermore, Whitestone REIT may engage in property development and redevelopment activities to enhance the value of its portfolio, thereby contributing to its earnings.
Whitestone REIT Financial Statement Overview
Summary
Overall, Whitestone REIT demonstrates solid financial health with consistent revenue growth and operational efficiency. The company effectively manages cash flow, although high leverage is a concern. Continued focus on improving net profit margins and managing debt levels will be crucial for sustaining financial stability.Income Statement
Whitestone REIT shows a consistent revenue growth trajectory with a TTM (Trailing-Twelve-Months) revenue increase of 2.76% over the previous year. The gross profit margin stands at 58.80%, indicating effective cost management. However, the net profit margin is relatively low at 13.88%, which could be improved. EBIT and EBITDA margins are strong at 33.93% and 60.72%, respectively, showcasing robust operational performance.75
Positive
Balance Sheet
The company maintains a high debt-to-equity ratio of 1.51, indicating significant leverage, which could pose financial risks. However, the return on equity is healthy at 5.03%, reflecting decent efficiency in using shareholder funds. The equity ratio is moderate at 37.71%, showing a balanced asset structure.70
Positive
Cash Flow
Whitestone REIT displays robust cash flow management with a strong operating cash flow to net income ratio of 2.48, and a free cash flow to net income ratio also at 2.48, indicating efficient conversion of profits into cash. The free cash flow has grown by 9.82% compared to the previous year, highlighting strong cash generation capabilities.80
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 152.00M | 147.92M | 140.58M | 125.36M | 117.92M | 119.25M | Gross Profit |
| 89.39M | 101.96M | 97.28M | 86.04M | 79.34M | 82.35M | EBIT |
| 51.56M | 48.34M | 46.66M | 35.19M | 30.93M | 49.68M | EBITDA |
| 92.31M | 87.18M | 78.36M | 64.14M | 59.23M | 76.42M | Net Income Common Stockholders |
| 21.10M | 19.18M | 35.27M | 12.05M | 6.03M | 23.68M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 4.58M | 4.57M | 6.17M | 15.72M | 25.78M | 15.53M | Total Assets |
| 1.02B | 1.11B | 1.10B | 1.10B | 1.05B | 1.06B | Total Debt |
| 622.92M | 640.89M | 626.16M | 642.84M | 644.18M | 644.70M | Net Debt |
| 618.34M | 636.32M | 620.00M | 627.12M | 618.41M | 629.17M | Total Liabilities |
| 670.60M | 693.62M | 678.31M | 703.05M | 706.68M | 703.16M | Stockholders Equity |
| 339.64M | 413.74M | 418.45M | 392.78M | 332.08M | 345.32M |
| Cash Flow | Free Cash Flow | ||||
| 52.28M | 47.60M | 44.43M | 48.87M | 42.78M | 47.75M | Operating Cash Flow |
| 52.28M | 47.60M | 44.43M | 48.87M | 42.78M | 47.75M | Investing Cash Flow |
| -30.72M | -36.31M | -6.71M | -91.23M | -6.44M | -41.79M | Financing Cash Flow |
| -21.72M | -13.00M | -47.28M | 32.31M | -26.02M | -4.10M |
Whitestone REIT Technical Analysis
Positive
14.05
Price Trends
13.54
Positive
13.88
Negative
13.43
Positive
Market Momentum
0.04
Negative
56.40
Neutral
65.97
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WSR, the sentiment is Positive. The current price of 14.05 is above the 20-day moving average (MA) of 13.49, above the 50-day MA of 13.54, and above the 200-day MA of 13.43, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 56.40 is Neutral, neither overbought nor oversold. The STOCH value of 65.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WSR.
Whitestone REIT Risk Analysis
Whitestone REIT disclosed 47 risk factors in its most recent earnings report. Whitestone REIT 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
Whitestone REIT Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $711.58M | 19.51 | 8.66% | 3.50% | 4.22% | -44.56% | |
72 Outperform | $8.89B | 30.11 | 9.31% | 4.25% | 6.21% | 22.32% | |
71 Outperform | $13.93B | 36.14 | 48.20% | 3.49% | 10.15% | 3.36% | |
65 Neutral | $2.78B | 120.69 | 1.11% | 3.24% | 1.69% | -7.10% | |
63 Neutral | $14.62B | 38.94 | 3.86% | 4.40% | 14.51% | -45.53% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
54 Neutral | $155.29M | ― | -37.19% | 7.34% | -32.95% | -45.50% |
* Real Estate Sector Average
Performance Comparison
WSR
Whitestone REIT
13.75
2.12
18.23%
KIM
Kimco Realty
21.71
3.03
16.22%
REG
Regency Centers
77.09
18.14
30.77%
AKR
Acadia Realty
23.06
7.13
44.76%
FRT
Federal Realty
103.54
5.82
5.96%
RPT
Rithm Property Trust
3.21
-0.40
-11.08%
Whitestone REIT Earnings Call Summary
Earnings Call Date: Mar 3, 2025 | % Change Since: 3.46% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
Whitestone REIT demonstrates strong performance with significant earnings growth and strategic redevelopments. Despite the challenges of interest rate impacts and timing uncertainties in larger redevelopments, the company maintains a positive outlook. The highlights, including strong leasing performance, dividend increases, and reduced leverage, significantly outweigh the lowlights.Highlights
Strong Earnings Growth
Whitestone REIT delivered 11% growth in core FFO per share, rising from $0.91 in 2023 to $1.01 in 2024.
Same-Store NOI Growth
The company achieved a same-store NOI growth of 5.1% for the full year and 5.8% for the fourth quarter.
Successful Leasing Strategies
Whitestone reported 11 consecutive quarters with leasing spreads over 17%, with renewal leasing spreads at 19% and new leasing spreads at 36.1% in Q4 2024.
Dividend Increase
The company raised its dividend by over 9%, with a CAGR of 6.5% since 2021, maintaining a 50% core FFO payout ratio.
Debt Reduction
Improved leverage from 9.2x debt-to-EBITDAre in Q4 2021 to 6.6x in Q4 2024.
Redevelopment and Value Addition
Redevelopment projects like Williams Trace in Houston boosted center traffic by 60% and are expected to enhance same-store NOI growth in 2026.
Lowlights
Interest Rate Impact
Interest rate increases over the last 3 years caused a double-digit drag on earnings.
Termination Fees Impact
Higher than average termination fees contributed to growth in 2024, with an implication of needing to replace tenants.
Development Timing Uncertainty
Larger redevelopment projects have longer time frames, with impacts expected in future years but not yet materialized.
Company Guidance
In the Whitestone REIT Fourth Quarter 2024 Earnings Conference Call, the company outlined its strategic guidance for future growth, emphasizing a targeted 4% to 6% organic core FFO growth over the next five years, driven by 3% to 5% same-store net operating income growth. They highlighted a historical compound annual growth rate for core FFO per share of 5.5% over the past three years, despite facing challenges like a 380 basis point increase in interest rates. The reduction in leverage was noted, with debt-to-EBITDAre improving from 9.2x in Q4 2021 to 6.6x in Q4 2024. Whitestone also aims for a 100 basis point uplift in core FFO growth from acquisitions and plans for continued redevelopment investments to enhance same-store NOI growth. The company's recent dividend increase of over 9% reflects a dividend CAGR of 6.5% since 2021, maintaining a 50% core FFO payout ratio. Whitestone's adaptability to demographic shifts and strategic redevelopment efforts are central to its growth strategy.Whitestone REIT Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Whitestone REIT Strengthens Board with New Appointments
Positive
Nov 5, 2024
Whitestone REIT has appointed Kristian M. Gathright and Donald A. Miller to its Board of Trustees, reflecting shareholder feedback and enhancing the board with their vast real estate expertise. Gathright, with a strong background in operations and strategic decision-making at Apple Hospitality REIT, and Miller, known for his leadership at Piedmont Office Realty Trust, bring valuable insights and experience to Whitestone’s growth strategy. These changes aim to drive shareholder value and support the company’s continued success in the competitive real estate market.
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.