COPT Defense Properties (CDP) AI Stock Analysis

• Market Cap: $6.68B
• Dividend Yield: 4.3%
• Average Volume (3M): 929.13K
• Price to Earnings (P/E): 22.4
• Beta (1Y): 0.33
• Revenue Growth: 0.06%
• EPS Growth: 8.88%
• Country: US
• Employees: 427
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Office
• EPS (TTM): 0.37
• Shares Outstanding: 113,210,594
• 10 Day Avg. Volume: 1,164,302
• 30 Day Avg. Volume: 929,129
• PEG Ratio: -0.09
• Price to Book (P/B): 2.33
• Price to Sales (P/S): 4.61
• P/FCF Ratio: 11.60
• Enterprise Value/Market Cap: 0.86
• Enterprise Value/Revenue: 7.65
• Enterprise Value/Gross Profit: 14.68
• Enterprise Value/Ebitda: 14.66
• 1Y Price Target: $33.67
• Price Target Upside: 13.18% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 1.32
• Revenue Forecast (FY): $744.66M

• Rating: 71 Outperform
• Price Target: $33.00 ▲(10.92% Upside)

The score is driven mainly by improving profitability and strong free cash flow, supported by upbeat earnings-call guidance and high leasing levels. Offsetting factors are elevated leverage/refinancing sensitivity and only moderately supportive valuation, while technical signals are positive on trend but mixed on momentum.

Positive Factors

High Leasing Rates

High leasing rates indicate strong demand and tenant retention, ensuring stable revenue and reducing vacancy risks, critical for long-term growth.

Strategic Financial Moves

Issuing senior notes enhances financial flexibility, enabling strategic investments and debt management, supporting sustained operational stability.

Revenue Growth

Robust revenue growth reflects effective market positioning and demand for defense-oriented properties, ensuring long-term financial health.

Negative Factors

High Leverage

High leverage can strain financial resources, increasing vulnerability to interest rate changes and limiting future investment capacity.

Potential Government Shutdown Impact

Government shutdowns pose risks to tenant operations and cash flows, potentially affecting occupancy rates and revenue stability.

Refinancing Headwinds

Refinancing costs can reduce profitability and cash flow, impacting financial flexibility and long-term investment potential.

COPT Defense Properties Business Overview & Revenue Model

Company Description

COPT is a REIT that owns, manages, leases, develops and selectively acquires office and data center properties. The majority of its portfolio is in locations that support the United States Government and its contractors, most of whom are engaged in national security, defense and information technology (IT) related activities servicing what the Company believes are growing, durable, priority missions (Defense/IT Locations). The Company also owns a portfolio of office properties located in select urban submarkets in the Greater Washington, DC/Baltimore region with durable Class-A office fundamentals and characteristics (Regional Office Properties). As of June 30, 2023, the Company derived 90% of its core portfolio annualized rental revenue from Defense/IT Locations and 10% from its Regional Office Properties. As of the same date and including 24 properties owned through unconsolidated joint ventures, COPT's core portfolio of 192 properties encompassed 22.9 million square feet and was 95% leased.

How the Company Makes Money

COPT Defense Properties generates revenue primarily through leasing its properties to government and defense contractors under long-term agreements. The majority of its income comes from rental payments, which are often backed by government contracts, providing a reliable cash flow. Additionally, CDP may engage in property development, enhancing its portfolio value and generating income from increased property rents. The company also benefits from partnerships with federal agencies and contractors, allowing it to align its property offerings with the specific needs of its tenants, which fosters long-term relationships and tenant retention. Furthermore, favorable government spending trends in defense and cybersecurity contribute to the stability and growth of CDP's revenue streams.

COPT Defense Properties Financial Statement Overview

Summary

COPT Defense Properties demonstrates strong revenue growth and improved profitability, with efficient cash flow management. However, high leverage poses a risk, and past income volatility requires attention. The company is on a positive trajectory, but careful monitoring of debt levels and consistent profitability is essential for sustained financial health.

Income Statement

COPT Defense Properties shows strong revenue growth with a 34.4% increase in TTM, indicating robust demand. The gross profit margin improved significantly to 67.19%, reflecting efficient cost management. Net profit margin also increased to 19.23%, demonstrating enhanced profitability. However, the company experienced a negative net income in 2023, which is a concern. Overall, the income statement reflects a positive trajectory with some past volatility.

Balance Sheet

The company maintains a high debt-to-equity ratio of 1.61, indicating significant leverage, which could pose risks if interest rates rise. Return on equity is moderate at 9.59%, suggesting decent profitability relative to shareholder equity. The equity ratio is stable, showing a balanced asset structure. While the balance sheet is stable, the high leverage remains a potential risk.

Cash Flow

Free cash flow grew by 5.59% in the TTM, highlighting improved cash generation. The operating cash flow to net income ratio is strong at 3.76, indicating healthy cash flow relative to earnings. The free cash flow to net income ratio is also robust at 0.93, suggesting efficient cash conversion. Overall, cash flow metrics are solid, but the growth rate could be more aggressive.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	750.00M	753.27M	684.98M	739.03M	664.45M	584.18M
Gross Profit	390.78M	260.36M	231.23M	220.41M	209.47M	325.77M
EBITDA	391.15M	369.74M	339.86M	354.46M	294.41M	303.48M
Net Income	149.94M	138.93M	-73.47M	173.03M	76.54M	97.37M
Balance Sheet
Total Assets	4.35B	4.25B	4.25B	4.26B	4.26B	4.08B
Cash, Cash Equivalents and Short-Term Investments	23.69M	38.28M	167.82M	12.34M	13.26M	18.37M
Total Debt	2.49B	2.44B	2.45B	2.26B	2.30B	2.13B
Total Liabilities	2.77B	2.69B	2.70B	2.51B	2.58B	2.36B
Stockholders Equity	1.51B	1.49B	1.48B	1.68B	1.62B	1.66B
Cash Flow
Free Cash Flow	311.65M	299.61M	255.77M	229.45M	219.12M	205.67M
Operating Cash Flow	351.56M	330.95M	276.27M	265.82M	249.15M	238.42M
Investing Cash Flow	-266.88M	-291.01M	-169.62M	-83.46M	-202.97M	-325.79M
Financing Cash Flow	-95.56M	-169.67M	46.26M	-183.18M	-50.90M	91.27M

COPT Defense Properties Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.75
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CDP, the sentiment is Positive. The current price of 29.75 is above the 20-day moving average (MA) of 28.62, above the 50-day MA of 29.04, and above the 200-day MA of 27.94, indicating a bullish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 62.52 is Neutral, neither overbought nor oversold. The STOCH value of 94.20 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CDP.

COPT Defense Properties Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CDP	71 Outperform	$6.68B	22.41	10.01%	4.30%	0.06%	8.88%
KRC	71 Outperform	$4.76B	14.70	5.94%	5.75%	0.77%	62.58%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
HIW	65 Neutral	$2.99B	23.63	5.37%	7.83%	-2.10%	-13.30%
CUZ	63 Neutral	$4.42B	75.87	1.26%	5.08%	16.38%	3.60%
DEI	52 Neutral	$1.86B	89.52	1.03%	6.45%	-0.12%	―
SLG	49 Neutral	$3.75B	-14,748.48	0.61%	6.95%	8.60%	―