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American Homes (AMH)
NYSE:AMH
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American Homes
(NYSE:AMH)
76Outperform
Positive Factors
Financial Performance
AMH reported a clean, in-line FFO 4Q24 print, supported by solid, above-trend rent growth.
Investment Opportunity
Analyst's recommendation is to continue investing in AMH, with an expected total return potential of 18.6%.
Operational Strength
American Homes 4 Rent is positioned to benefit from a dropoff in supply from apartment delivery, commercial SFR developments, and lower homebuilding activity due to lack of affordability.
Negative Factors
Earnings Growth Headwinds
Some headwinds to earnings growth exist in 2025, including a modestly slower revenue growth and some dilution from debt refinancing.
Guidance and Estimates
The guidance for FY2025 Core FFO/sh is slightly softer-than-expected, with the midpoint currently below both analyst estimates and consensus.
Lease Rate Concerns
The stock is expected to face modest pressure in light of weak new lease rate concerns and slowing core trends.
American Homes (AMH) vs. S&P 500 (SPY)
Market Cap
$13.91B
Dividend Yield2.77%
Average Volume (3M)2.53M
Price to Earnings (P/E)34.8
Beta (1Y)0.78
Revenue Growth6.28%
EPS Growth7.07%
CountryUS
Employees1,730
SectorReal Estate
Sector Strength73
IndustryREIT - Residential
Share Statistics
EPS (TTM)1.08
Shares Outstanding369,525,120
10 Day Avg. Volume2,233,833
30 Day Avg. Volume2,528,847
Financial Highlights & Ratios
PEG Ratio4.93
Price to Book (P/B)N/A
Price to Sales (P/S)7.79
Price to Cash Flow (P/CF)32.90
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
$38.79Price Target Upside2.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
American Homes Business Overview & Revenue Model
Company DescriptionAmerican Homes 4 Rent (NYSE: AMH) is a leader in the single-family home rental industry and American Homes 4 Rent is fast becoming a nationally recognized brand for rental homes, known for high-quality, good value and tenant satisfaction. We are an internally managed Maryland real estate investment trust, or REIT, focused on acquiring, developing, renovating, leasing, and operating attractive, single-family homes as rental properties. As of September 30, 2020, we owned 53,229 single-family properties in selected submarkets in 22 states.
How the Company Makes MoneyAmerican Homes 4 Rent generates revenue primarily through rental income from its portfolio of single-family homes. The company owns and manages thousands of properties across various states, collecting monthly rent payments from its tenants. AMH's revenue model is largely dependent on occupancy rates, rental pricing, and the efficient management of property expenses. Additionally, the company may benefit from property value appreciation over time, which can enhance asset value and potential rental income. Strategic partnerships with construction companies and local real estate professionals help AMH optimize its property acquisition and development processes, contributing to its overall profitability.
American Homes Financial Statement Overview
Summary
American Homes demonstrates strong financial health with consistent revenue growth and profitability improvements. The balance sheet is stable with manageable leverage, but attention to cash flow due to high-capital expenditures is needed.Income Statement
American Homes shows a positive trend in revenue growth, achieving consistent year-over-year increases. The net profit margin has improved significantly, reflecting better cost management and operational efficiency. However, the absence of total revenue data for the latest year introduces uncertainty in assessing recent performance.78
Positive
Balance Sheet
The balance sheet is solid with a healthy equity ratio, indicating strong financial stability. The debt-to-equity ratio is moderate, suggesting manageable leverage levels. However, there is a slight decline in total assets and stockholders' equity, which needs monitoring.72
Positive
Cash Flow
The company exhibits robust operating cash flow, with positive free cash flow growth over the years. The operating cash flow to net income ratio implies efficient cash generation relative to earnings. Yet, the high investing cash outflows could signal significant capital expenditures or investment activities, which might impact future liquidity.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.73B | 1.62B | 1.49B | 1.30B | 1.18B | Gross Profit |
| 973.49M | 883.87M | 825.75M | 716.81M | 642.68M | EBIT |
| 0.00 | 352.71M | 338.02M | 291.50M | 236.97M | EBITDA |
| 1.11B | 1.03B | 764.55M | 664.35M | 580.12M | Net Income Common Stockholders |
| 398.48M | 380.17M | 175.15M | 70.21M | 37.37M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 199.41M | 59.38M | 69.16M | 48.20M | 137.06M | Total Assets |
| 13.38B | 12.69B | 12.18B | 10.96B | 9.59B | Total Debt |
| 4.09B | 4.48B | 4.52B | 3.88B | 2.82B | Net Debt |
| 3.89B | 4.42B | 4.45B | 3.83B | 2.68B | Total Liabilities |
| 5.53B | 5.04B | 5.00B | 4.22B | 3.12B | Stockholders Equity |
| 7.16B | 6.97B | 6.50B | 6.06B | 5.79B |
| Cash Flow | Free Cash Flow | |||
| 811.53M | 604.51M | 526.74M | 472.65M | 369.28M | Operating Cash Flow |
| 811.53M | 738.69M | 665.52M | 595.20M | 474.10M | Investing Cash Flow |
| -825.88M | -692.58M | -1.43B | -1.73B | -642.92M | Financing Cash Flow |
| 142.70M | -42.21M | 786.18M | 1.06B | 269.78M |
American Homes Technical Analysis
Positive
37.81
Price Trends
35.48
Positive
35.99
Positive
36.52
Positive
Market Momentum
0.57
Negative
66.07
Neutral
86.86
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMH, the sentiment is Positive. The current price of 37.81 is above the 20-day moving average (MA) of 36.26, above the 50-day MA of 35.48, and above the 200-day MA of 36.52, indicating a bullish trend. The MACD of 0.57 indicates Negative momentum. The RSI at 66.07 is Neutral, neither overbought nor oversold. The STOCH value of 86.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AMH.
American Homes Risk Analysis
American Homes disclosed 45 risk factors in its most recent earnings report. American Homes reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
American Homes Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $13.91B | 34.82 | 5.82% | 2.77% | 6.28% | 7.07% | |
75 Outperform | $30.38B | 28.12 | 9.10% | 3.18% | 4.85% | 16.04% | |
72 Outperform | $21.12B | 101.38 | 4.67% | 3.28% | 8.16% | -37.84% | |
71 Outperform | $20.38B | 26.51 | 13.53% | 3.20% | 6.29% | 82.88% | |
69 Neutral | $27.93B | 26.27 | 9.36% | 3.78% | 3.80% | 24.08% | |
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% |
* Real Estate Sector Average
Performance Comparison
AMH
American Homes
37.81
2.52
7.14%
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%
ESS
Essex Property
306.57
75.01
32.39%
INVH
Invitation Homes
34.85
0.93
2.74%
American Homes Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: 6.81% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
American Homes 4 Rent delivered strong performance in 2024 with robust FFO and NOI growth, a successful development program, and strategic acquisitions. The company is well-prepared for 2025, with strong leasing momentum and a solid balance sheet. However, the outlook for revenue growth in 2025 is more modest, and there are concerns about development yields and higher interest expenses.Highlights
Strong Finish to 2024
American Homes 4 Rent reported a 6.6% growth in core FFO per share, with core revenue growth of 5% and same-home core NOI growth of 5.3% for the full year.
Successful Development Program
Since 2017, the company has built over 12,000 homes in 200 communities. In 2024, they delivered a total of 2,356 homes, slightly exceeding expectations.
Robust Acquisitions and Dispositions
In Q4, the company acquired a nearly 1,700-home portfolio for $480 million and sold 587 properties, generating $180 million in net proceeds.
Strong Leasing Momentum into 2025
Leasing momentum continued strong into January and February 2025, with new lease spreads accelerating by 0.7% and renewal growth at 4.5%.
Solid Balance Sheet and Capital Management
The company ended 2024 with a net debt to adjusted EBITDA of 5.4 times, a fully undrawn $1.25 billion revolving credit facility, and $200 million in cash.
Lowlights
Modest 2025 Revenue Growth Outlook
The company expects same-home core revenue growth of 3.5% at the midpoint for 2025, a slowdown compared to 2024.
Pressure on Development Yields
Development yields are expected at approximately 5.5% going in, which may seem low compared to current bond yields and stock trading levels.
Higher Interest Expense Impact
The guidance includes a nine-cent dilution from financing costs due to refinancing and growth financing activities.
Company Guidance
During the earnings call, American Homes 4 Rent provided comprehensive guidance for 2025, highlighting several key metrics. The company expects core FFO per share to range between $1.80 and $1.86, representing a 3.4% year-over-year growth at the midpoint. Occupancy is projected to average in the low 96% area, consistent with last year, while same-home core revenue growth is anticipated to be 3.5% at the midpoint. Rent growth is expected to be in the high 3% area, with new lease spreads at 3% and renewals at 4%. Core operating expense growth is forecasted at 4%, with property tax growth in the mid-4% range. The company also plans to deliver approximately 2,300 homes from its development program, with initial yields averaging in the mid-5% area. Additionally, American Homes 4 Rent aims to deploy between $1 billion and $1.2 billion of total capital, adding 2,200 to 2,400 newly constructed homes. Lastly, bad debt is forecasted to be in the low 1% area, and the company intends to maintain disciplined growth without the need for external equity capital.American Homes Corporate Events
Business Operations and StrategyFinancial Disclosures
American Homes Outlines 2025 Growth and Financial Plans
Positive
Feb 28, 2025
On February 28, 2025, American Homes 4 Rent released its ‘Investor Highlights’ presentation, detailing its strategic plans and financial outlook for the year. The company anticipates continued growth through its acquisition and homebuilding programs, with an expected delivery of 2,200 to 2,400 homes in 2025. AMH’s strong market position is supported by a high-quality investment-grade balance sheet and a diversified portfolio, with a focus on maintaining high occupancy rates and strong renewal rates. The company also plans to refinance its remaining securitizations to fully unencumber its balance sheet, enhancing its financial flexibility.
Executive/Board Changes
American Homes Announces New CEO and Board Expansion
Neutral
Jan 3, 2025
American Homes 4 Rent has announced that Bryan Smith will succeed David P. Singelyn as CEO effective January 1, 2025, following Singelyn’s retirement. Additionally, Smith will join the company’s Board of Trustees, which will expand from 12 to 13 members, as part of a strategic leadership transition with no additional compensation for his trustee role.
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.