Cubesmart (CUBE) AI Stock Analysis

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Cubesmart

(NYSE:CUBE)

74Outperform

CubeSmart's overall stock score of 74 reflects its robust financial position with strong cash flow and no debt, providing strategic flexibility. While the technical analysis indicates potential upward movement, valuation is fair, supported by a healthy dividend yield. The mixed results from the earnings call highlight both achievements and operational challenges, warranting a cautiously optimistic outlook.

Positive Factors

Balance Sheet Strength

CUBE trades at a lower price-to-funds from operations multiple than some peers, despite having a better balance sheet with a 4.1x debt-to-EBITDA ratio.

Earnings Performance

1Q25 earnings beat Street/CUBE guidance with same-store performance ahead of expectations and in-place rate deceleration improving.

Operational Improvement

CUBE overall operations pace improved at a notable clip; SSREV growth year-over-year improved 120 basis points sequentially versus 70 basis points for peers.

Negative Factors

Guidance Miss

The company's guidance for 2025 funds from operations per share missed the consensus estimate by 4.7%.

Market Challenges

Top NYC market is decelerating with no clear-cut sign on when move-in rates can get back to breakeven.

Revenue Growth Concerns

The company is assuming same-store net operating income growth of -3% and same-store revenue growth of -1% year-over-year, which is weaker than expected.

Cubesmart (CUBE) vs. S&P 500 (SPY)

Market Cap

$9.78B

Dividend Yield4.83%

Average Volume (3M)2.05M

Price to Earnings (P/E)25.2

Beta (1Y)0.66

Revenue Growth2.15%

EPS Growth-5.99%

CountryUS

Employees3,104

SectorReal Estate

Sector Strength83

IndustryREIT - Industrial

Share Statistics

EPS (TTM)0.39

Shares Outstanding227,954,010

10 Day Avg. Volume2,290,369

30 Day Avg. Volume2,051,109

Financial Highlights & Ratios

PEG Ratio-14.67

Price to Book (P/B)3.43

Price to Sales (P/S)0.00

P/FCF Ratio15.76

Enterprise Value/Market Cap0.99

Enterprise Value/Revenue2.28

Enterprise Value/Gross Profit13.82

Enterprise Value/Ebitda3.68

Forecast

1Y Price Target

$45.25

Price Target Upside6.05% Upside

Rating ConsensusHold

Number of Analyst Covering12

Cubesmart Business Overview & Revenue Model

Company DescriptionCubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and secure storage space for residential and commercial customers. According to the 2020 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.

How the Company Makes MoneyCubeSmart generates revenue primarily through the rental of storage units to individuals and businesses. The company's key revenue streams include monthly rental fees collected from tenants for the use of storage spaces, which vary in size and amenities. Additional revenue is generated through ancillary services such as the sale of packing and moving supplies, tenant insurance programs, and administrative fees. CubeSmart also benefits from economies of scale and operational efficiencies derived from its large portfolio of properties, which helps optimize occupancy rates and rental income. Strategic partnerships and marketing initiatives further enhance the company's earnings by driving customer acquisition and retention.

Cubesmart Financial Statement Overview

Summary

Cubesmart's financial performance is strong due to consistent revenue growth and solid cash flow management, highlighted by robust net profit margins and a debt-free balance sheet. However, the negative EBIT in 2024 indicates potential operational inefficiencies that need addressing.

Income Statement

Positive

Cubesmart has shown consistent revenue growth over the years, with a notable increase of 5.6% from 2022 to 2023. However, the EBIT margin experienced a significant decline due to negative EBIT in 2024, indicating operational challenges. Despite this, the net profit margin remains robust at 36.7% for 2024, driven by strong net income performance.

Balance Sheet

Positive

The company's balance sheet is strong with a debt-free position in 2024, reflecting excellent financial stability. The equity ratio stands at 44.9%, indicating a solid capital structure primarily funded by equity. Return on equity is healthy at 13.6%, showcasing effective management in generating returns for shareholders.

Cash Flow

Very Positive

Cubesmart has demonstrated strong cash flow management, with free cash flow growth of 3.3% from 2022 to 2023, and continued robust free cash flow of $631 million in 2024. The operating cash flow to net income ratio of 1.61 in 2023 highlights efficient cash generation relative to income.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.08B	1.07B	1.05B	1.01B	822.56M	679.18M
	Gross Profit
703.18M	748.48M	755.55M	716.36M	570.46M	455.54M
	EBIT
531.59M	483.12M	703.12M	385.76M	296.89M	254.81M
	EBITDA
695.30M	688.82M	703.12M	696.37M	547.93M	414.12M
	Net Income Common Stockholders
385.85M	391.18M	410.76M	199.19M	130.58M	89.79M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
10.75M	71.56M	6.53M	6.06M	11.14M	3.59M
	Total Assets
6.74B	6.39B	6.23B	6.33B	6.55B	4.78B
	Total Debt
0.00	3.05B	2.99B	3.06B	3.21B	2.43B
	Net Debt
3.42B	2.98B	2.98B	3.06B	3.20B	2.43B
	Total Liabilities
3.82B	3.44B	3.34B	3.43B	3.55B	2.69B
	Stockholders Equity
2.84B	2.87B	2.80B	2.83B	2.87B	1.83B
Cash Flow		Free Cash Flow
617.33M	631.07M	611.14M	550.23M	414.58M	301.18M
	Operating Cash Flow
628.75M	631.07M	611.14M	591.47M	449.19M	351.03M
	Investing Cash Flow
-608.57M	-173.96M	-93.82M	-48.77M	-1.85B	-511.44M
	Financing Cash Flow
-12.03M	-387.67M	-518.03M	-547.09M	1.41B	108.20M

Cubesmart Technical Analysis

Technical Analysis Sentiment

Positive

Last Price42.67

Price Trends

50DMA

40.59

Positive

100DMA

41.05

Positive

200DMA

44.72

Negative

Market Momentum

MACD

0.69

Negative

RSI

62.33

Neutral

STOCH

83.99

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CUBE, the sentiment is Positive. The current price of 42.67 is above the 20-day moving average (MA) of 40.26, above the 50-day MA of 40.59, and below the 200-day MA of 44.72, indicating a neutral trend. The MACD of 0.69 indicates Negative momentum. The RSI at 62.33 is Neutral, neither overbought nor oversold. The STOCH value of 83.99 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CUBE.

Cubesmart Risk Analysis

Cubesmart disclosed 51 risk factors in its most recent earnings report. Cubesmart 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

Cubesmart Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EXR	78 Outperform	$32.89B	34.50	6.46%	4.37%	14.72%	-4.21%
PSA	76 Outperform	$53.34B	30.20	20.20%	3.95%	3.08%	-8.54%
CUBE	74 Outperform	$9.78B	25.19	13.72%	4.83%	2.15%	-5.99%
SELF	71 Outperform	$58.62M	24.36	4.98%	5.61%	3.58%	8.22%
Sector *	60 Neutral	$2.81B	11.05	0.20%	8508.34%	6.12%	-16.02%
NSA	60 Neutral	$4.92B	61.75	5.66%	6.17%	-9.89%	-70.29%
COLD	47 Neutral	$4.87B	―	-3.56%	5.20%	-1.18%	62.96%

* Real Estate Sector Average

Performance Comparison

CUBE

Cubesmart

42.93

2.44

6.03%

EXR

Extra Space Storage

148.89

6.94

4.89%

PSA

Public Storage

305.18

38.78

14.56%

NSA

National Storage Affiliates

36.64

1.79

5.14%

SELF

Global Self Storage

5.30

0.47

9.73%

COLD

Americold Realty

17.12

-5.71

-25.01%

Cubesmart Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: 4.20%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with significant achievements in FFO per share beat, strategic acquisitions, and expense control. However, these positives were balanced by declines in same-store revenue, negative NOI growth, and macroeconomic concerns, leading to a cautious outlook.

Q1-2025 Updates

Positive Updates

FFO Per Share Beat

Achieved $0.64 of FFO per share, a $0.01 beat to the high end of guidance.

Acquisition of Joint Venture Interest

Closed on the acquisition of the remaining 80% interest in the HBP4 joint venture, adding 28 early-stage lease-up stores for $452.8 million.

Third-Party Management Expansion

Added 33 stores to the third-party management platform, ending the quarter with 869 third-party stores under management.

Operating Expense Control

Same-store operating expenses grew only 0.6%, better than expected, improving the outlook for full-year expense growth.

Positive Market Performance

Strong performance in key markets like New York City Boroughs, Chicago, and Washington, D.C. suburbs, with signs of stabilization in Northern New Jersey, Phoenix, and Atlanta.

Negative Updates

Decline in Same-Store Revenue

Same-store revenue growth was down 0.4% year-over-year, although an improvement from down 1.6% in the previous quarter.

Negative Same-Store NOI Growth

Same-store NOI growth was negative 0.8% for the quarter.

Occupancy Decline

Average occupancy for the same-store portfolio was down 50 basis points to 89.5% during the first quarter.

Macro-Economic Uncertainty

Concerns over economic volatility and a frozen housing market could impact storage demand, leading to a conservative outlook.

Company Guidance

During CubeSmart's first quarter 2025 earnings call, the company reported strong operational performance, achieving $0.64 of FFO per share, which exceeded the high end of their guidance by $0.01. The company experienced solid top-of-funnel demand, with rental rates for new customers improving and existing customer health remaining strong. Operating expenses grew by only 0.6% year-over-year, contributing to a negative 0.8% same-store NOI growth for the quarter. Tim Martin, CFO, highlighted that the company's same-store revenue growth was down 0.4% compared to last year, an improvement from the previous quarter's 1.6% decline. Average occupancy for their same-store portfolio decreased by 50 basis points to 89.5%, narrowing from a 120-basis-point decline in the fourth quarter. The company also closed on the acquisition of the remaining 80% interest in one of its joint ventures, involving a $452.8 million investment. Looking forward, CubeSmart maintained its prior range of expectations for top-line growth, while slightly improving the midpoint of its FFO per share range due to better-than-expected expense performance.

Cubesmart Corporate Events

Business Operations and Strategy

CubeSmart Highlights Strategic Growth in Self-Storage Sector

Positive

May 5, 2025

CubeSmart’s recent investor presentation highlights its strategic positioning and growth trajectory within the self-storage sector. The company emphasizes its robust portfolio, national scale, and focus on quality investments to drive long-term shareholder value. With a strong presence in key markets, particularly New York City, CubeSmart leverages its industry-leading demographics and operational platform to maintain cash flow stability and capitalize on demand trends. The company’s disciplined investment strategy and commitment to corporate responsibility underpin its sustainable growth outlook.

Spark’s Take on CUBE Stock

According to Spark, TipRanks’ AI Analyst, CUBE is a Outperform.

CubeSmart’s overall stock score of 76 reflects a robust financial position with consistent revenue growth and strategic flexibility due to no debt. While technical indicators show potential upward momentum, some caution is warranted due to high stochastic values. Valuation is fair with a strong dividend yield, balancing the mixed earnings call results that highlighted both strategic achievements and operational challenges.

To see Spark’s full report on CUBE stock, click here.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures

CubeSmart Expands Portfolio with New Acquisitions

Positive

May 2, 2025

CubeSmart reported its first quarter 2025 results, highlighting a positive start to the year with improving occupancy and rate trends. The company reported diluted earnings per share of $0.39 and funds from operations per diluted share of $0.64. Despite a slight decrease in same-store net operating income, CubeSmart expanded its portfolio by acquiring the remaining interest in the HVP IV portfolio and adding 33 stores to its third-party management platform. The company continues to focus on high-barrier-to-entry locations with ongoing development projects in New York, aiming to strengthen its market position amid economic uncertainties.

Spark’s Take on CUBE Stock

According to Spark, TipRanks’ AI Analyst, CUBE is a Outperform.

CubeSmart’s overall stock score of 75 reflects a strong financial foundation with robust cash flow and no debt, combined with a fair valuation and strategic initiatives. Technical analysis shows moderate stability but lacks strong momentum. The earnings call and corporate events support a cautiously optimistic outlook, despite some operational challenges.

To see Spark’s full report on CUBE stock, click here.

Private Placements and FinancingBusiness Operations and Strategy

CubeSmart Announces New Equity Distribution Agreement

Positive

Mar 3, 2025

On March 3, 2025, CubeSmart entered into an Equity Distribution Agreement with several financial institutions, allowing the company to sell up to 13,510,817 common shares. This agreement replaces a previous program and aims to support CubeSmart’s financial strategies, including debt repayment and business expansion. The proceeds from these sales will be used for general business purposes, enhancing the company’s operational capabilities and market positioning.

M&A TransactionsBusiness Operations and Strategy

CubeSmart Highlights Strategic Achievements in March 2025

Positive

Mar 3, 2025

CubeSmart’s March 2025 investor presentation highlights its strategic achievements and market positioning, emphasizing its robust portfolio and strong industry fundamentals. The company has successfully executed strategic acquisitions and investments, enhancing its market leadership, particularly in New York City. CubeSmart’s focus on quality, cash flow stability, and customer diversification positions it well for sustained growth, with a disciplined investment strategy and a sophisticated operating platform that maximizes property cash flows.

DividendsBusiness Operations and StrategyFinancial Disclosures

CubeSmart Reports Decrease in 2024 Net Income

Negative

Feb 28, 2025

CubeSmart reported its fourth quarter and annual 2024 results, highlighting a decrease in net income and diluted EPS compared to the previous year. Despite a challenging self-storage environment, the company remains optimistic about 2025, citing stable self-storage fundamentals and strategic growth initiatives. Key activities included acquiring a significant interest in joint ventures and expanding its third-party management platform. The company also increased its quarterly dividend and reported a slight decrease in same-store net operating income due to increased expenses and decreased revenues.

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.