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Agree Realty (ADC)
NYSE:ADC
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Agree Realty
(NYSE:ADC)72Outperform
Positive Factors
Financial Performance
ADC reported Core FFO/sh of $1.04, which beat both the estimate as well as consensus ($1.03).
Growth and Expansion
Increasing acquisitions estimate to $1.2B reflects a positive outlook on growth.
Negative Factors
Financial Projections
Reducing FY25 estimated AFFO per share indicates potential challenges in financial performance.
Agree Realty (ADC) vs. S&P 500 (SPY)
Market Cap
$8.04B
Dividend Yield3.95%
Average Volume (3M)951.15K
Price to Earnings (P/E)42.1
Beta (1Y)0.39
Revenue Growth14.90%
EPS Growth5.28%
CountryUS
Employees75
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)1.78
Shares Outstanding107,248,700
10 Day Avg. Volume1,067,175
30 Day Avg. Volume951,147
Financial Highlights & Ratios
PEG Ratio7.97
Price to Book (P/B)N/A
Price to Sales (P/S)13.38
Price to Cash Flow (P/CF)14.30
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
$80.21Price Target Upside5.51% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
Agree Realty Business Overview & Revenue Model
Company DescriptionAgree Realty Corporation (ADC) is a publicly traded real estate investment trust (REIT) that specializes in the acquisition and development of properties leased to industry-leading retail tenants. The company focuses on owning and operating a portfolio of high-quality retail properties across the United States, with an emphasis on leading retail sectors including grocery, convenience stores, and home improvement, ensuring a diverse and stable tenant base.
How the Company Makes MoneyAgree Realty Corporation generates revenue primarily through rental income received from its portfolio of retail properties. The company's revenue model is based on acquiring and developing properties that are leased to single tenants under long-term, triple-net leases. These leases require tenants to pay all property operating expenses, such as maintenance, insurance, and property taxes, which minimizes Agree Realty's operational costs and risks. Additionally, ADC benefits from lease escalations over time, which provide a predictable and growing income stream. The company also engages in strategic partnerships and joint ventures to enhance its property portfolio and leverage opportunities for growth. By focusing on properties leased to creditworthy tenants, Agree Realty ensures a stable and consistent cash flow, which is a key contributor to its earnings.
Agree Realty Financial Statement Overview
Summary
Agree Realty exhibits strong financial health with substantial revenue growth, efficient operational performance, and effective cash flow management. Despite the increasing leverage, the company maintains a solid balance sheet with significant equity backing. The overall financial outlook is positive, driven by robust cash generation and consistent profit margins.Income Statement
The income statement shows strong revenue growth over the years, with a notable increase from $187M in 2019 to $537M in 2023. The net profit margin has been healthy, with the most recent margin at approximately 35.3% in 2023. The EBIT and EBITDA margins are solid, reflecting consistent operational efficiency. However, the absence of data for 2024 limits the ability to assess the most recent performance.75
Positive
Balance Sheet
The balance sheet indicates strong equity growth, with stockholders' equity increasing from $1.69B in 2019 to $5.19B in 2023. The debt-to-equity ratio is manageable but shows an upward trend, indicating increasing leverage which could pose future risks. The equity ratio has remained stable, emphasizing the company's equity-funded growth strategy.70
Positive
Cash Flow
Cash flow analysis reveals a robust free cash flow growth trajectory, with significant increases from $126M in 2019 to $391M in 2023. The operating cash flow to net income ratio is consistently above 2, highlighting strong cash generation capabilities. The company maintains a high free cash flow to net income ratio, indicating efficient capital utilization.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 617.10M | 537.50M | 463.15M | 363.61M | 248.57M | Gross Profit |
| 542.25M | 470.78M | 377.53M | 298.26M | 216.82M | EBIT |
| 302.24M | 254.39M | 218.09M | 190.27M | 125.13M | EBITDA |
| 543.26M | 463.95M | 386.24M | 295.67M | 192.16M | Net Income Common Stockholders |
| 189.83M | 169.96M | 152.44M | 122.27M | 91.38M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 6.40M | 10.91M | 27.76M | 43.25M | 6.14M | Total Assets |
| 8.49B | 7.77B | 6.71B | 5.23B | 3.89B | Total Debt |
| 2.28B | 2.41B | 1.94B | 1.69B | 1.22B | Net Debt |
| 2.27B | 2.40B | 1.91B | 1.64B | 1.21B | Total Liabilities |
| 2.98B | 2.57B | 2.08B | 1.81B | 1.36B | Stockholders Equity |
| 5.51B | 5.20B | 4.63B | 3.42B | 2.52B |
| Cash Flow | Free Cash Flow | |||
| 431.97M | 391.60M | 362.12M | 246.31M | 142.96M | Operating Cash Flow |
| 431.97M | 391.60M | 362.12M | 246.31M | 142.96M | Investing Cash Flow |
| -885.41M | -1.27B | -1.62B | -1.39B | -1.30B | Financing Cash Flow |
| 445.31M | 869.01M | 1.24B | 1.18B | 1.12B |
Agree Realty Technical Analysis
Positive
76.02
Price Trends
71.67
Positive
72.80
Positive
69.67
Positive
Market Momentum
0.93
Negative
67.34
Neutral
89.04
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADC, the sentiment is Positive. The current price of 76.02 is above the 20-day moving average (MA) of 72.87, above the 50-day MA of 71.67, and above the 200-day MA of 69.67, indicating a bullish trend. The MACD of 0.93 indicates Negative momentum. The RSI at 67.34 is Neutral, neither overbought nor oversold. The STOCH value of 89.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADC.
Agree Realty Risk Analysis
Agree Realty disclosed 40 risk factors in its most recent earnings report. Agree 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
Agree 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 | $51.11B | 58.40 | 2.40% | 5.36% | 29.49% | -22.38% | |
79 Outperform | $8.02B | 19.87 | 9.32% | 5.39% | 4.97% | -0.26% | |
72 Outperform | $8.04B | 42.12 | 3.53% | 3.95% | 14.90% | 5.28% | |
72 Outperform | $8.71B | 29.50 | 9.58% | 4.34% | 6.21% | 22.32% | |
72 Outperform | $14.00B | 30.61 | 5.38% | 5.39% | -9.09% | -36.58% | |
63 Neutral | $14.59B | 38.87 | 4.03% | 4.53% | 14.51% | -45.53% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% |
* Real Estate Sector Average
Performance Comparison
ADC
Agree Realty
76.02
20.36
36.58%
KIM
Kimco Realty
21.43
2.87
15.46%
NNN
National Retail Properties
42.85
2.34
5.78%
O
Realty Income
58.48
8.28
16.49%
WPC
W. P. Carey Inc.
64.77
10.11
18.50%
FRT
Federal Realty
101.31
2.68
2.72%
Agree Realty Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: 5.07% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
Agree Realty's earnings call reflects a strong financial position with significant liquidity and strategic investments. However, market volatility and potential credit risks present challenges. The company's disciplined approach and robust portfolio are positive indicators, but uncertainties in the market temper the overall outlook.Highlights
Strong Liquidity and Balance Sheet
Agree Realty concluded 2024 with over $2 billion of liquidity, including $920 million of outstanding forward equity, and no material debt maturities until 2028. Leverage stood at just 3.3 times pro forma net debt to recurring EBITDA.
Significant Investment Activity
For the fourth quarter, Agree Realty invested approximately $371 million in 127 high-quality retail net lease properties. For the full year 2024, they invested in properties across 45 states, with a total of $867 million originating from the acquisition platform.
Record Year for Development and DFP Platforms
Agree Realty had a record year with 41 projects either completed or under construction, representing approximately $180 million of committed capital.
High Occupancy and Investment-Grade Exposure
At year-end, the portfolio included 2,370 properties with an occupancy rate of 99.6%. The investment-grade exposure was 68.2%.
Lowlights
Market Volatility and Higher Interest Rates
The company is navigating a volatile higher interest rate environment, which underscores the need for a disciplined approach to capital allocation and raising.
Challenges in the Sale-Leaseback Market
The sale-leaseback market's activity is contingent on CFOs' decisions on capitalizing their balance sheets, which could be affected by rising interest rates and market volatility.
Potential Credit Losses and Bankruptcy Concerns
The company has included an allowance for 50 basis points of credit loss in their guidance, accounting for potential issues such as the ongoing Big Lots bankruptcy.
Company Guidance
During the Agree Realty Fourth Quarter 2024 Conference Call, the company provided detailed guidance for 2025, emphasizing its financial strategy and investment plans. Agree Realty reported a robust liquidity position with over $2 billion, supported by $920 million in outstanding forward equity and no significant debt maturities until 2028. The company aims to deploy $1.1 to $1.3 billion in investments across its external growth platforms while maintaining leverage within its target range of four to five times net debt to EBITDA. The guidance projects an AFFO per share between $4.26 and $4.30, reflecting a 3.5% year-over-year growth at the midpoint. The company's disciplined capital allocation strategy, combined with a strong balance sheet, positions it to capitalize on opportunities without needing additional equity capital. The outlook includes assumptions for potential dilution due to treasury stock methods if stock prices remain above $70.Agree Realty Corporate Events
Business Operations and StrategyFinancial Disclosures
Agree Realty Projects Strong Investment Growth for 2025
Positive
Jan 6, 2025
Agree Realty Corporation announced its 2024 investment activity, revealing a total real estate investment volume of approximately $951 million across 282 properties leased to leading tenants in 45 states. The company’s 2025 investment outlook projects a 26% year-over-year increase in investment volume, ranging between $1.1 billion and $1.3 billion, supported by a strong balance sheet and liquidity of over $2 billion. This strategic positioning and robust pipeline are expected to strengthen its market position and enable continued growth despite macroeconomic conditions.
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.