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Cubesmart (CUBE)
:CUBE
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Cubesmart
(NYSE:CUBE)
Rating:75Outperform
Price Target:
$47.00
▲(13.94%Upside)
Positive Factors
Acquisitions
CUBE can grow externally via accretive acquisitions with a smaller asset base compared to peers and an under-levered balance sheet.
Urban Portfolio
CUBE's high-quality, urban portfolio allows for attractive relative growth with lower risk.
Valuation
CUBE is trading at a modest discount, which is expected to compress given same-store upside and solid expected growth that could be augmented by acquisitions.
Negative Factors
Geographic Exposure
CUBE is less exposed to the Sunbelt, which may have higher growth potential in a recovery, but this may require a stronger housing market.
Supply and Demand
Self-storage has faced a 'double whammy' of higher supply combined with a less mobile population.
Cubesmart (CUBE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.66B
Dividend Yield5.04%
Average Volume (3M)1.59M
Price to Earnings (P/E)24.9
Beta (1Y)0.68
Revenue Growth2.15%
EPS Growth-5.99%
CountryUS
Employees3,104
SectorReal Estate
Sector Strength57
IndustryREIT - Industrial
Share Statistics
EPS (TTM)0.39
Shares Outstanding227,954,010
10 Day Avg. Volume1,479,491
30 Day Avg. Volume1,592,988
Financial Highlights & Ratios
PEG Ratio-14.26
Price to Book (P/B)3.33
Price to Sales (P/S)0.00
P/FCF Ratio15.32
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue2.20
Enterprise Value/Gross Profit13.36
Enterprise Value/Ebitda3.55
Forecast
1Y Price Target
$47.20Price Target Upside14.42% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Cubesmart Business Overview & Revenue Model
Company DescriptionCubeSmart (CUBE) is a self-administered and self-managed real estate investment trust (REIT) focused on the ownership, operation, acquisition, and development of self-storage facilities across the United States. The company offers storage solutions for residential and commercial customers, providing secure and convenient storage options for a variety of needs. CubeSmart's facilities are designed to provide affordable and accessible storage spaces with features such as climate control, drive-up access, and advanced security systems.
How the Company Makes MoneyCubeSmart generates revenue primarily through the rental of storage units at its self-storage facilities. The company's key revenue streams include monthly rental fees from customers who lease storage space for residential, business, or vehicle storage purposes. Additionally, CubeSmart offers a range of ancillary services, such as tenant insurance, packing supplies, and truck rentals, which contribute to its earnings. Significant partnerships with online marketplaces and marketing platforms enhance its visibility and customer acquisition efforts, further supporting revenue growth. The company also benefits from strategic acquisitions and the development of new properties, expanding its footprint and increasing its income potential.
Cubesmart Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: 1.98%|
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 Financial Statement Overview
Summary
Cubesmart demonstrates a solid financial position with consistent revenue growth and strong cash flow management. The absence of debt in 2024 is a significant strength, providing flexibility for future investments. However, the negative EBIT in 2024 suggests potential operational inefficiencies that need addressing to sustain profitability.Income Statement
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.75
Positive
Balance Sheet
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.80
Positive
Cash Flow
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.85
Very Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.07B | 1.05B | 1.01B | 822.56M | 679.18M |
| Gross Profit | 748.48M | 755.55M | 716.36M | 570.46M | 455.54M |
| EBITDA | 688.82M | 703.12M | 696.37M | 547.93M | 414.12M |
| Net Income | 391.18M | 410.76M | 199.19M | 130.58M | 89.79M |
Balance Sheet | |||||
| Total Assets | 6.39B | 6.23B | 6.33B | 6.55B | 4.78B |
| Cash, Cash Equivalents and Short-Term Investments | 71.56M | 6.53M | 6.06M | 11.14M | 3.59M |
| Total Debt | 3.05B | 2.99B | 3.06B | 3.21B | 2.43B |
| Total Liabilities | 3.44B | 3.34B | 3.43B | 3.55B | 2.69B |
| Stockholders Equity | 2.87B | 2.80B | 2.83B | 2.87B | 1.83B |
Cash Flow | |||||
| Free Cash Flow | 631.07M | 611.14M | 550.23M | 414.58M | 301.18M |
| Operating Cash Flow | 631.07M | 611.14M | 591.47M | 449.19M | 351.03M |
| Investing Cash Flow | -173.96M | -93.82M | -48.77M | -1.85B | -511.44M |
| Financing Cash Flow | -387.67M | -518.03M | -547.09M | 1.41B | 108.20M |
Cubesmart Technical Analysis
Negative
41.25
Price Trends
42.20
Negative
41.12
Positive
42.81
Negative
Market Momentum
-0.07
Positive
39.61
Neutral
14.23
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CUBE, the sentiment is Negative. The current price of 41.25 is below the 20-day moving average (MA) of 42.23, below the 50-day MA of 42.20, and below the 200-day MA of 42.81, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 39.61 is Neutral, neither overbought nor oversold. The STOCH value of 14.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $33.34B | 34.97 | 6.46% | 4.38% | 14.72% | -4.21% | |
75 Outperform | $9.66B | 24.90 | 13.72% | 5.04% | 2.15% | -5.99% | |
75 Outperform | $50.63B | 28.66 | 20.20% | 4.23% | 3.08% | -8.54% | |
71 Outperform | $60.66M | 25.21 | 4.98% | 5.42% | 3.58% | 8.22% | |
64 Neutral | $6.92B | 18.30 | -1.93% | 6.80% | 4.67% | -25.44% | |
53 Neutral | $4.40B | 55.14 | 5.66% | 7.14% | -9.89% | -70.29% | |
48 Neutral | $4.66B | ― | -3.56% | 5.68% | -1.18% | 62.96% |
* Real Estate Sector Average
Performance Comparison
CUBE
Cubesmart
41.28
-4.95
-10.71%
EXR
Extra Space Storage
148.95
-11.45
-7.14%
PSA
Public Storage
285.55
-6.82
-2.33%
NSA
National Storage Affiliates
32.02
-10.54
-24.77%
SELF
Global Self Storage
5.36
0.58
12.13%
COLD
Americold Realty
16.23
-11.05
-40.51%
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.
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.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.