Elme Communities (ELME) AI Stock Analysis

• Market Cap: $1.47B
• Dividend Yield: 4.31%
• Average Volume (3M): 922.12K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.59
• Revenue Growth: 4.59%
• EPS Growth: 73.22%
• Country: US
• Employees: 255
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Office
• EPS (TTM): -0.04
• Shares Outstanding: 88,161,064
• 10 Day Avg. Volume: 1,034,589
• 30 Day Avg. Volume: 922,120
• PEG Ratio: 1.36
• Price to Book (P/B): 1.24
• Price to Sales (P/S): 5.55
• P/FCF Ratio: 14.10
• Enterprise Value/Market Cap: 1.42
• Enterprise Value/Revenue: 8.51
• Enterprise Value/Gross Profit: 14.93
• Enterprise Value/Ebitda: 29.63
• 1Y Price Target: $12.67
• Price Target Upside: -24.72% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 60 Neutral
• Price Target: $18.00 ▲(6.95% Upside)

Elme Communities' overall score reflects a mixed outlook. The most significant factor is the financial performance, which shows growth but also profitability challenges. Technical analysis indicates bullish momentum, while valuation concerns due to negative earnings weigh on the score. The strategic asset sales and special distributions provide a positive outlook, but market challenges and a lengthy disposal process add uncertainty.

Positive Factors

Revenue Growth

Consistent NOI growth indicates strong demand for Elme's properties, suggesting resilience in its core market and potential for sustained revenue increases.

Strategic Asset Sales

The strategic sale of assets is a significant move to unlock value for shareholders, providing liquidity and potential for reinvestment or distribution.

Market Position

Strong market position in a high-demand area supports long-term rental income stability and potential for property value appreciation.

Negative Factors

Profitability Issues

Ongoing profitability challenges could hinder financial flexibility and limit growth opportunities, impacting long-term sustainability.

Market Challenges

High cost of capital can restrict growth and investment, posing a challenge to scaling operations and improving profitability.

Asset Disposal Delays

Prolonged asset disposal process may delay strategic goals and distributions, affecting shareholder returns and operational focus.

Elme Communities Business Overview & Revenue Model

Company Description

Elme Communities owns and operates uniquely positioned real estate assets in the Washington Metro area. Backed by decades of experience, expertise and ambition, we create value by transforming insights into strategy and strategy into action. As of October 29, 2020, the Company's portfolio of 45 properties includes approximately 3.7 million square feet of commercial space and 6,863 multifamily apartment units. These 45 properties consist of 22 multifamily properties,15 office properties, and 8 retail centers. Our shares trade on the NYSE. With a track record of driving returns and delivering satisfaction, we are a trusted authority in one of the nation's most competitive real estate markets.

How the Company Makes Money

Elme Communities generates revenue primarily through rental income from its multifamily residential properties. The company leases apartment units to tenants, collecting monthly rent, which constitutes a significant portion of its overall earnings. Additional revenue streams include ancillary income from services such as parking, laundry facilities, and other property amenities. The company may also engage in property management services and development projects, further contributing to its financial performance. Strategic partnerships with local businesses and community organizations can enhance tenant retention and increase occupancy rates, thereby positively impacting revenue. Moreover, Elme Communities benefits from favorable market conditions in the regions it operates, which can lead to higher rental rates and property value appreciation.

Elme Communities Financial Statement Overview

Summary

Elme Communities faces challenges with declining revenue and persistent net losses, impacting profitability and return metrics. The balance sheet shows increased leverage, raising financial risk, while cash flows remain robust, indicating effective cash management. The company needs to focus on improving revenue growth and profitability to enhance overall financial health.

Income Statement

Elme Communities has shown a declining revenue trend over the years, with a revenue growth rate of -24.68% from 2020 to 2021, followed by modest growth. The gross profit margin is stable but not improving significantly, and the net profit margin remains negative due to consistent net losses. Despite a positive EBITDA margin, the EBIT margin remains a concern. Overall, the income statement reflects challenges in achieving profitability.

Balance Sheet

The company's debt-to-equity ratio has increased over time, indicating higher leverage, which poses a risk. The equity ratio has decreased slightly, reflecting a higher proportion of liabilities in the capital structure. Return on equity is negative due to net losses, suggesting challenges in generating shareholder value. The balance sheet indicates moderate financial stability but highlights increased leverage risks.

Cash Flow

Elme Communities has shown consistent operating cash flows, with a positive free cash flow trend. The free cash flow to net income ratio is strong, indicating efficient cash generation relative to net income losses. The operating cash flow to net income ratio is positive, showing operational efficiency despite net losses. Overall, the cash flow statement reflects solid cash management but underscores the need for improved profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	245.91M	241.94M	227.91M	209.38M	169.15M	294.12M
Gross Profit	140.15M	144.37M	139.97M	127.94M	102.24M	181.21M
EBITDA	70.61M	120.67M	66.40M	90.00M	76.48M	117.02M
Net Income	-14.23M	-13.10M	-52.98M	-60.73M	-21.79M	-52.98M
Balance Sheet
Total Assets	1.81B	1.85B	1.90B	1.87B	1.88B	2.41B
Cash, Cash Equivalents and Short-Term Investments	4.79M	6.14M	7.22M	8.39M	233.60M	7.70M
Total Debt	698.20M	698.95M	679.35M	552.36M	496.95M	987.37M
Total Liabilities	763.73M	763.68M	745.68M	608.82M	558.93M	1.09B
Stockholders Equity	1.05B	1.08B	1.15B	1.26B	1.32B	1.32B
Cash Flow
Free Cash Flow	91.19M	95.24M	84.67M	34.26M	56.70M	54.67M
Operating Cash Flow	91.19M	95.24M	84.67M	73.21M	89.16M	112.99M
Investing Cash Flow	-40.51M	-43.74M	-146.22M	-241.16M	702.17M	65.76M
Financing Cash Flow	-51.48M	-51.43M	60.24M	-56.42M	-565.40M	-185.20M

Elme Communities Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 16.83
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ELME, the sentiment is Positive. The current price of 16.83 is below the 20-day moving average (MA) of 16.87, above the 50-day MA of 16.46, and above the 200-day MA of 15.80, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 53.57 is Neutral, neither overbought nor oversold. The STOCH value of 17.57 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ELME.

Elme Communities Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DEA	66 Neutral	1.04B	57.94	1.29%	9.72%	8.18%	-15.35%
PGRE	64 Neutral	1.51B	-18.18	-1.47%	―	-1.68%	63.27%
ELME	60 Neutral	$1.47B	―	-1.31%	4.31%	4.59%	73.22%
PDM	57 Neutral	1.09B	-15.92	-4.42%	5.70%	-6.74%	17.44%
JBGS	53 Neutral	1.66B	-11.57	-11.48%	3.20%	-11.33%	-22.04%
BDN	50 Neutral	759.58M	-2.32	-37.10%	13.76%	-3.05%	-94.96%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%

Elme Communities Corporate Events

Elme Communities Announces Major Strategic Shift with Asset Sale

Elme Communities reported its second quarter 2025 financial results, showing a net loss per diluted share of $0.04, consistent with the previous year, and a slight increase in Core FFO per diluted share to $0.24. The company announced a significant strategic move with the sale of 19 multifamily communities for approximately $1.6 billion and a plan for the liquidation and dissolution of the company. This decision marks a major shift in Elme’s operations and could have significant implications for its stakeholders, as it withdraws its prior 2025 guidance and does not plan to issue new guidance for 2025 or 2026.

Elme Communities Sells Portfolio for $1.6 Billion

On August 1, 2025, Elme Communities entered into a Purchase and Sale Agreement with Cortland Partners to sell a 19-asset portfolio for $1.6 billion, marking a significant step in Elme’s strategic plan to liquidate and dissolve the company. The transaction, expected to close in the fourth quarter of 2025, is part of a broader Plan of Sale and Liquidation approved by Elme’s Board, aiming to maximize shareholder value through asset sales and distributions, with estimated returns of $17.58 to $18.50 per share.