Easterly Government Properties (DEA) AI Stock Analysis

• Market Cap: $1.03B
• Dividend Yield: 9.58%
• Average Volume (3M): 494.38K
• Price to Earnings (P/E): 73.8
• Beta (1Y): 0.30
• Revenue Growth: 11.02%
• EPS Growth: -30.91%
• Country: US
• Employees: 50
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Office
• EPS (TTM): 0.03
• Shares Outstanding: 46,108,380
• 10 Day Avg. Volume: 424,642
• 30 Day Avg. Volume: 494,383
• PEG Ratio: -14.42
• Price to Book (P/B): 0.89
• Price to Sales (P/S): 3.89
• P/FCF Ratio: 7.23
• Enterprise Value/Market Cap: 2.12
• Enterprise Value/Revenue: 6.68
• Enterprise Value/Gross Profit: 10.00
• Enterprise Value/Ebitda: 11.10
• 1Y Price Target: $24.13
• Price Target Upside: 7.77% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: $22.50 ▲(0.49% Upside)

Easterly Government Properties scores moderately due to strong financial performance and positive earnings call highlights, such as core FFO growth and high occupancy rates. However, the technical analysis indicates a bearish trend, and the high P/E ratio suggests overvaluation, which tempers the overall score. The attractive dividend yield provides some support, but concerns about leverage and project delays remain.

Positive Factors

Stable Revenue Model

Easterly's focus on long-term leases with U.S. government agencies provides stable and predictable cash flows, minimizing vacancy risk and ensuring consistent revenue streams.

High Occupancy Rates

High occupancy rates and long lease terms with government tenants enhance revenue stability and reduce turnover costs, supporting long-term financial performance.

Cash Flow Generation

Robust free cash flow growth enhances Easterly's financial flexibility, allowing for reinvestment in growth opportunities and debt reduction, strengthening long-term stability.

Negative Factors

Leverage Challenges

High leverage levels can increase financial risk and limit flexibility. Efforts to reduce leverage are necessary but may constrain capital allocation in the short term.

Net Profitability Concerns

Low net profit margins indicate challenges in cost management and efficiency, which could impact long-term profitability and shareholder returns if not addressed.

Delayed Project Completion

Delays in project completion can defer expected revenue and increase costs, potentially impacting cash flow and financial projections in the medium term.

Easterly Government Properties Business Overview & Revenue Model

Company Description

Easterly Government Properties, Inc. (NYSE:DEA) is based in Washington, D.C., and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S. Government. Easterly's experienced management team brings specialized insight into the strategy and needs of mission-critical U.S. Government agencies for properties leased to such agencies either directly or through the U.S. General Services Administration (GSA).

How the Company Makes Money

Easterly Government Properties generates revenue primarily through long-term leases with U.S. government agencies, which provide a stable and predictable income stream. The company typically enters into lease agreements that are structured to align with the federal government's budget and operational needs, often resulting in leases that span several years. Key revenue streams include rental income from these leases, which are often backed by the full faith and credit of the U.S. government, thus reducing default risk. Additionally, DEA may engage in property development and management services, allowing it to capitalize on value-add opportunities within its portfolio. Significant partnerships with federal agencies and a focus on acquiring properties in strategic locations further enhance its earning potential.

Easterly Government Properties Financial Statement Overview

Summary

Easterly Government Properties demonstrates solid operational performance with strong gross and EBITDA margins, though net profitability remains a concern. The balance sheet reflects a stable financial structure with moderate leverage. Cash flow generation is robust, with significant growth in free cash flow, enhancing the company's financial flexibility. Overall, the company is positioned well in its industry, but improvements in net profitability and return on equity could enhance its financial standing.

Income Statement

Easterly Government Properties shows a stable revenue growth trend with a 3.6% increase in TTM. The gross profit margin remains strong at 66.8%, indicating efficient cost management. However, the net profit margin is relatively low at 4.2%, suggesting potential challenges in controlling non-operating expenses. The EBIT and EBITDA margins are healthy, reflecting operational efficiency.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.88, indicating a balanced approach to leveraging. The return on equity is low at 1.3%, which may point to inefficiencies in generating returns from shareholders' equity. The equity ratio is not explicitly calculated but suggests a stable capital structure given the total assets and equity figures.

Cash Flow

The cash flow statement reveals a significant improvement in free cash flow growth at 67.9% TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 0.17, which is relatively low, suggesting that not all earnings are translating into cash flow. However, the free cash flow to net income ratio of 1.0 indicates that the company is effectively converting its earnings into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	327.31M	302.05M	287.23M	293.61M	274.86M	245.08M
Gross Profit	218.75M	200.98M	184.80M	195.93M	187.74M	167.44M
EBITDA	197.04M	179.34M	161.52M	181.19M	163.85M	140.91M
Net Income	13.86M	19.55M	18.80M	31.47M	30.06M	11.96M
Balance Sheet
Total Assets	3.38B	3.22B	2.88B	2.83B	2.83B	2.46B
Cash, Cash Equivalents and Short-Term Investments	4.36M	19.35M	9.38M	7.58M	11.13M	8.46M
Total Debt	1.17B	1.60B	1.29B	1.25B	1.21B	978.26M
Total Liabilities	2.00B	1.84B	1.47B	1.42B	1.38B	1.16B
Stockholders Equity	1.33B	1.32B	1.32B	1.24B	1.28B	1.15B
Cash Flow
Free Cash Flow	241.82M	162.63M	114.48M	125.94M	481.39M	145.20M
Operating Cash Flow	241.82M	162.63M	114.48M	125.94M	118.34M	145.20M
Investing Cash Flow	-415.96M	-409.64M	-127.01M	-69.10M	-363.04M	-290.18M
Financing Cash Flow	149.14M	252.88M	17.19M	-59.71M	250.17M	144.10M

Easterly Government Properties Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 22.39
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DEA, the sentiment is Positive. The current price of 22.39 is above the 20-day moving average (MA) of 21.74, above the 50-day MA of 21.57, and above the 200-day MA of 21.50, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 62.11 is Neutral, neither overbought nor oversold. The STOCH value of 73.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DEA.

Easterly Government Properties Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
DEA	58 Neutral	$1.03B	73.80	1.00%	9.58%	11.02%	-30.91%
PDM	55 Neutral	$1.05B	-14.98	-4.45%	6.09%	-1.23%	9.10%
BDN	54 Neutral	$512.19M	―	-19.17%	17.55%	-5.52%	40.27%
ELME	52 Neutral	$253.02M	-1.87	-13.43%	4.14%	3.10%	-900.13%
JBGS	46 Neutral	$1.24B	-8.46	-10.10%	4.01%	-11.04%	-58.49%