Acadia Realty (AKR) AI Stock Analysis

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Acadia Realty

(NYSE:AKR)

60Neutral

Acadia Realty's overall score reflects its strong financial foundation and strategic growth initiatives. However, technical analysis indicates potential downside risks, and the high P/E ratio suggests overvaluation. Positive earnings call sentiment and strategic acquisitions provide a counterbalance, but challenges in suburban retail and interest rate pressures are notable concerns. The company's robust equity position and dividend yield offer some stability amid these mixed signals.

Positive Factors

Acquisition Strategy

Management is confident in its ability to acquire $300M to $500M of core assets annually, targeting street retail with attractive yields and risk-adjusted returns.

Retail Expansion

AKR is not seeing a slowdown in retailers' store opening plans, and consumer spending data and traffic levels remain healthy.

Negative Factors

Earnings Guidance

Despite strong growth activities, the 2024 FFO guidance was reiterated, suggesting potential delays in earnings impact.

Market Valuation

AKR trades at a discount compared to its 10-year average, and the expectation is that this gap will narrow as investors seek better, differentiated growth.

Acadia Realty (AKR) vs. S&P 500 (SPY)

Market Cap

$2.26B

Dividend Yield4.09%

Average Volume (3M)1.38M

Price to Earnings (P/E)98.3

Beta (1Y)1.00

Revenue Growth1.69%

EPS Growth-7.10%

CountryUS

Employees129

SectorReal Estate

Sector Strength70

IndustryREIT - Retail

Share Statistics

EPS (TTM)0.18

Shares Outstanding119,772,930

10 Day Avg. Volume1,428,620

30 Day Avg. Volume1,384,380

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)7.02

Price to Cash Flow (P/CF)16.70

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

$26.00

Price Target Upside39.11% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Acadia Realty Business Overview & Revenue Model

Company DescriptionAcadia Realty Trust (AKR) is a fully integrated equity real estate investment trust (REIT) specializing in the ownership, acquisition, redevelopment, and management of retail properties located primarily in high-barrier-to-entry, densely-populated urban and suburban markets across the United States. The company focuses on creating value through its investment management platform and aims to achieve superior risk-adjusted returns for its shareholders.

How the Company Makes MoneyAcadia Realty Trust generates revenue primarily through rental income from its portfolio of retail properties. The company leases space to a diverse range of tenants, including national, regional, and local retailers. In addition to base rent, it often collects additional income through expense recoveries and percentage rent that is tied to the sales performance of its tenants. Another significant revenue stream for Acadia comes from its investment management business, where it earns fees and promotes from managing external capital through various investment funds and joint ventures. These partnerships allow Acadia to leverage its expertise in acquiring and managing retail real estate assets, thus enhancing its earnings potential.

Acadia Realty Financial Statement Overview

Summary

Acadia Realty's financial performance is commendable with consistent revenue growth and strong gross profit margins. The balance sheet is robust with no debt and a strong equity ratio, reducing financial risk. However, challenges such as declining EBITDA margins and free cash flow growth indicate areas for improvement.

Income Statement

Positive

Acadia Realty's income statement shows a consistent revenue growth with a 6.2% increase in 2024 compared to 2023. Gross profit margin and net profit margin for 2024 are healthy at 68.8% and 6.0%, respectively, indicating strong operational efficiency. The EBIT margin improved to 18.3% in 2024 from 13.6% in 2023. However, the EBITDA margin declined significantly from 57.4% in 2023 to 18.8% in 2024, suggesting potential concerns in managing operating expenses.

Balance Sheet

Positive

The balance sheet of Acadia Realty is strong, with no total debt reported in 2024, a significant improvement from previous years. The equity ratio is robust, with 47.3% of total assets funded by stockholders' equity. Return on equity improved to 1.0% in 2024 from 1.2% in 2023, reflecting better profitability. This strong equity position and low leverage mitigate financial risk.

Cash Flow

Positive

The cash flow statement shows a slight decline in operating cash flow in 2024 compared to 2023. Free cash flow growth is negative due to lower operating cash flow, yet the free cash flow to net income ratio remains strong. The operating cash flow to net income ratio indicates efficient cash management despite reduced free cash flow growth.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
359.69M	338.69M	326.29M	292.50M	255.48M
	Gross Profit
247.64M	230.22M	224.36M	193.62M	155.38M
	EBIT
65.66M	46.07M	26.11M	44.45M	-22.72M
	EBITDA
239.82M	194.39M	162.03M	167.89M	115.86M
	Net Income Common Stockholders
21.65M	19.87M	-65.25M	23.55M	-66.04M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
31.58M	50.77M	17.16M	17.75M	19.23M
	Total Assets
4.37B	4.29B	4.30B	4.26B	4.19B
	Total Debt
1.67B	1.93B	1.83B	1.85B	1.76B
	Net Debt
1.66B	1.92B	1.81B	1.83B	1.74B
	Total Liabilities
1.84B	2.16B	2.05B	2.11B	2.14B
	Stockholders Equity
2.07B	1.64B	1.69B	1.52B	1.44B
Cash Flow		Free Cash Flow
140.45M	155.76M	74.17M	59.40M	96.16M
	Operating Cash Flow
140.45M	155.76M	133.21M	104.98M	102.56M
	Investing Cash Flow
-170.66M	-208.54M	-124.17M	-198.54M	-96.21M
	Financing Cash Flow
44.62M	45.85M	-4.38M	91.32M	-1.26M

Acadia Realty Technical Analysis

Technical Analysis Sentiment

Negative

Last Price18.69

Price Trends

50DMA

21.71

Negative

100DMA

22.77

Negative

200DMA

22.20

Negative

Market Momentum

MACD

-0.46

Positive

RSI

36.18

Neutral

STOCH

17.43

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AKR, the sentiment is Negative. The current price of 18.69 is below the 20-day moving average (MA) of 20.19, below the 50-day MA of 21.71, and below the 200-day MA of 22.20, indicating a bearish trend. The MACD of -0.46 indicates Positive momentum. The RSI at 36.18 is Neutral, neither overbought nor oversold. The STOCH value of 17.43 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AKR.

Acadia Realty Risk Analysis

Acadia Realty disclosed 50 risk factors in its most recent earnings report. Acadia 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

Acadia 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
GTY	80 Outperform	$1.52B	22.06	7.41%	6.55%	9.44%	8.76%
FCPT	79 Outperform	$2.67B	24.98	7.43%	5.25%	6.96%	-0.41%
WSR	76 Outperform	$1.30B	17.66	8.66%	3.99%	5.13%	88.91%
IVT	73 Outperform	$2.05B	137.44	0.82%	3.45%	5.61%	135.64%
CURB	61 Neutral	$2.31B	77.38		―	―	―
Sector *	61 Neutral	$4.21B	15.62	-3.65%	12.27%	6.29%	-21.37%
AKR	60 Neutral	$2.26B	98.25	1.11%	4.09%	1.69%	-7.10%

* Real Estate Sector Average

Performance Comparison

AKR

Acadia Realty

18.69

2.07

12.45%

GTY

Getty Realty

28.08

3.08

12.32%

WSR

Whitestone REIT

12.82

2.27

21.52%

FCPT

Four Corners Property

27.11

5.02

22.73%

IVT

InvenTrust Properties

26.59

3.32

14.27%

CURB

Curbline Properties Corp.

22.61

3.01

15.36%

Acadia Realty Earnings Call Summary

Earnings Call Date: Feb 11, 2025 | % Change Since: -20.54% | Next Earnings Date: Apr 29, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong performance in Acadia's street retail portfolio, strategic acquisitions, and successful leasing activity, despite some challenges with suburban retail and retailer bankruptcies. The company remains confident in its growth trajectory.

Highlights

Strong Portfolio Performance

Acadia achieved over 5% same-store NOI growth for each of the last three years, driven significantly by street retail performance. The company projects 5% to 6% same-store growth in 2025.

Record Leasing Activity

Acadia signed over 50 new leases totaling $13.5 million in annual rent, equivalent to nearly 10% of total ABR. Overall spreads for the year were approximately 35%.

Successful Acquisitions

Completed over $600 million of acquisitions, with $300 million for the Core Portfolio. Acquisitions included strategic additions in key markets like SoHo and Georgetown, with a going-in GAAP yield in the mid-6s and a five-year CAGR in excess of 7%.

Investment Management Growth

Two joint ventures executed in Q4, including a $275 million acquisition in Las Vegas, highlighting strong institutional capital relationships.

Increase in Occupancy and Leasing Pipeline

Sequential increase in Core physical occupancy by 140 basis points and a signed not yet open pipeline representing over 5% of Core ABR.

Lowlights

Retailer Weakness and Bankruptcies

Reemergence of retailer weakness and bankruptcies, particularly with junior anchor retailers in the suburban shopping center portion of the portfolio.

Potential Interest Rate Challenges

Acknowledgement of challenges due to a higher-yielding bond market and the likelihood of a prolonged high-interest rate environment.

Suburban Retail Challenges

Choppiness observed from some suburban tenants, although mitigated by strong street retail performance.

Company Guidance

During the Acadia Realty Trust Fourth Quarter 2024 Earnings Conference Call, the company provided detailed guidance for 2025. They forecast a 5% to 6% same-store NOI growth, driven by a strong performance in their street retail portfolio, which has consistently delivered over 5% same-store NOI growth for each of the last three years. The company's acquisition activity in 2024 included over $600 million in transactions, split evenly between Core and Investment Management businesses, with a focus on strategic markets such as Georgetown, SoHo, and Williamsburg. The new acquisitions are projected to contribute a 7% CAGR, enhancing cash yields into the 7% range. Acadia has set 2025 FFO guidance at a midpoint of $1.35 per share, reflecting an anticipated growth of 5.5% from 2024, with internal growth and signed not yet open leases playing a significant role in boosting earnings. The company also emphasized its strong balance sheet, having raised approximately $740 million in common equity and completed over $1 billion in debt transactions during 2024, positioning them well for continued growth.

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.