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Essential Properties Realty Trust Inc (EPRT)
NYSE:EPRT
RESEARCH TOOLSreports
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Essential Properties Realty
(NYSE:EPRT)80Outperform
Positive Factors
Financial Performance
EPRT's 4Q24 earnings print contained a number of notable positives, including robust investment volumes at yields well above peers'.
Growth Outlook
EPRT raised its FY25e AFFO/sh guidance, implying +7.5% year-over-year growth.
Negative Factors
Valuation Concerns
The REIT's valuation is considered high, and its operations are trending closer to average, making further outperformance unlikely.
Essential Properties Realty (EPRT) vs. S&P 500 (SPY)
Market Cap
$6.08B
Dividend Yield3.59%
Average Volume (3M)1.26M
Price to Earnings (P/E)28.1
Beta (1Y)0.86
Revenue Growth24.84%
EPS Growth-6.90%
CountryUS
Employees48
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)1.15
Shares Outstanding187,691,450
10 Day Avg. Volume1,688,095
30 Day Avg. Volume1,263,266
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)13.97
Price to Cash Flow (P/CF)17.40
P/FCF Ratio17.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$34.94Price Target Upside8.21% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
Essential Properties Realty Business Overview & Revenue Model
Company DescriptionEssential Properties Realty Trust, Inc. (EPRT) is a real estate investment trust focused on owning, acquiring, and managing single-tenant properties leased to middle-market companies operating in service-oriented and experience-based sectors. EPRT specializes in net lease agreements, where tenants are responsible for the majority of property-level operating expenses, including maintenance, insurance, and taxes. This approach ensures a steady income stream while minimizing operational costs for the company.
How the Company Makes MoneyEssential Properties Realty generates revenue primarily through leasing its portfolio of properties to tenants under long-term net lease agreements. These leases provide stable and predictable rental income, which forms the bulk of the company's earnings. Additionally, EPRT benefits from property acquisitions funded through various means, including equity offerings and debt financing, which further expand its real estate portfolio and enhance income potential. The company's focus on service-oriented and experience-based tenants aims to ensure resilience against economic volatility, as these sectors typically exhibit strong demand irrespective of economic cycles.
Essential Properties Realty Financial Statement Overview
Summary
Essential Properties Realty exhibits strong financial performance with robust income statement metrics, an impressive balance sheet, and positive cash flow indicators. The company has shown consistent revenue growth, maintained high profit margins, and transitioned to a debt-free structure, positioning it for sustainable growth.Income Statement
Essential Properties Realty has shown strong income statement metrics with consistent revenue growth from 2019 to 2024. The gross profit margin remains exceptionally high at approximately 98%, indicating efficient cost management. The company exhibits a robust net profit margin of 45.1% in 2024, a significant improvement from 30.3% in 2020. Revenue growth has been consistent, with a notable increase of 25% from 2023 to 2024. The EBIT and EBITDA margins are strong, reflecting solid operational efficiency. Overall, the company demonstrates excellent profitability and growth trends.85
Very Positive
Balance Sheet
The balance sheet of Essential Properties Realty is impressive, with a debt-free status in 2024, indicating financial prudence and stability. The equity ratio of 61.5% in 2024 suggests a strong equity base, enhancing financial flexibility. Return on Equity (ROE) is healthy, with a notable increase to 5.7% in 2024 from 2.7% in 2020. The company has effectively managed its leverage, transitioning from a debt-dependant structure in earlier years to a robust equity position. This financial structure minimizes risk and supports sustainable growth.90
Very Positive
Cash Flow
Essential Properties Realty shows positive cash flow metrics with consistent operating cash flow growth. The free cash flow has improved significantly over the years, reaching $308 million in 2024. The operating cash flow to net income ratio is strong, indicating effective cash generation relative to net income. The absence of capital expenditures contributes to the strong free cash flow position. Despite large investing cash outflows, the company maintains a solid cash flow profile, supporting its operational and financial activities.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 449.61M | 359.60M | 286.51M | 230.23M | 164.01M | Gross Profit |
| 444.61M | 351.38M | 283.05M | 224.47M | 160.13M | EBIT |
| 278.19M | 242.75M | 175.42M | 134.42M | 72.83M | EBITDA |
| 404.97M | 352.05M | 279.50M | 199.95M | 135.34M | Net Income Common Stockholders |
| 203.00M | 190.71M | 134.13M | 95.72M | 42.27M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 40.71M | 39.81M | 62.34M | 59.76M | 26.60M | Total Assets |
| 5.80B | 4.77B | 4.00B | 3.30B | 2.49B | Total Debt |
| 2.13B | 1.69B | 1.42B | 1.17B | 815.28M | Net Debt |
| 2.09B | 1.65B | 1.36B | 1.11B | 788.68M | Total Liabilities |
| 2.23B | 1.78B | 1.50B | 1.25B | 906.85M | Stockholders Equity |
| 3.56B | 2.98B | 2.49B | 2.04B | 1.57B |
| Cash Flow | Free Cash Flow | |||
| 308.48M | 254.57M | -517.71M | 167.39M | 99.39M | Operating Cash Flow |
| 308.48M | 254.57M | 211.02M | 167.39M | 99.39M | Investing Cash Flow |
| -1.12B | -857.13M | -706.08M | -829.68M | -545.51M | Financing Cash Flow |
| 810.70M | 580.01M | 506.80M | 689.06M | 457.79M |
Essential Properties Realty Technical Analysis
Positive
32.29
Price Trends
31.65
Positive
32.14
Positive
30.78
Positive
Market Momentum
0.17
Negative
54.07
Neutral
35.65
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EPRT, the sentiment is Positive. The current price of 32.29 is above the 20-day moving average (MA) of 31.88, above the 50-day MA of 31.65, and above the 200-day MA of 30.78, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 54.07 is Neutral, neither overbought nor oversold. The STOCH value of 35.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EPRT.
Essential Properties Realty Risk Analysis
Essential Properties Realty disclosed 59 risk factors in its most recent earnings report. Essential Properties Realty 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
Essential Properties Realty Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $6.08B | 28.15 | 6.21% | 3.59% | 24.84% | -6.90% | |
80 Outperform | $52.14B | 59.58 | 2.40% | 5.36% | 29.49% | -22.38% | |
79 Outperform | $8.04B | 19.91 | 9.32% | 5.38% | 4.97% | -0.26% | |
78 Outperform | $4.05B | 33.16 | 6.11% | 6.39% | -1.01% | -18.46% | |
77 Outperform | $2.93B | 27.44 | 7.43% | 4.74% | 6.96% | -0.41% | |
72 Outperform | $14.17B | 30.99 | 5.38% | 5.39% | -9.09% | -36.58% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% |
* Real Estate Sector Average
Performance Comparison
EPRT
Essential Properties Realty
32.29
8.04
33.15%
NNN
National Retail Properties
42.85
2.34
5.78%
O
Realty Income
58.48
8.28
16.49%
WPC
W. P. Carey Inc.
64.77
10.11
18.50%
EPR
EPR Properties
53.20
13.81
35.06%
FCPT
Four Corners Property
29.31
6.20
26.83%
Essential Properties Realty Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: 5.18% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive sentiment with strong investment activity, AFFO growth, high occupancy, and improved financial metrics despite challenges such as the Zips Car Wash bankruptcy and cap rate compression.Highlights
Strong Investment Activity
Invested $333 million through 37 transactions at a weighted average cash yield of 8%. Investment pipeline is supportive of the guidance range of $900 million to $1.1 billion for 2025.
Positive AFFO Growth
AFFO per share increased by 7% to $0.45 compared to Q4 2023. Total AFFO was $81.8 million, up 22% from the same period in 2023.
High Occupancy and Collections
Occupancy rate at 99.7% and 100% rent collections in the fourth quarter. Signed 72 leases with a recapture rate of 101%.
Improved Financial Metrics
G&A expenses as a percentage of total revenue decreased to 4.8% from 5.2% in the previous year. Declared a cash dividend of $0.295 with an AFFO payout ratio of 66%.
Strong Balance Sheet and Liquidity
Pro forma leverage of 3.8 times and liquidity of $1.4 billion. Upsized revolver commitment to $1 billion and an extended maturity date to February 2030.
Lowlights
Zips Car Wash Bankruptcy
One tenant, Zip's Car Wash, filed for Chapter 11 bankruptcy, representing 20 basis points of ABR across three locations.
Cap Rate Compression and Competition
Increased competition in the market leading to modest cap rate compression. Investment cap rates in 2025 expected to be lower than 2024.
Dispositions and Car Wash Exposure
Sold 24 properties for $60.4 million in net proceeds, with 70% of dispositions in the car wash sector to reduce exposure.
Company Guidance
In the Essential Properties Realty Trust fourth quarter 2024 earnings call, the company provided an optimistic outlook for 2025. The updated guidance for 2025 Adjusted Funds from Operations (AFFO) per share was set in the range of $1.85 to $1.89, reflecting a slight increase at the low end. The company reported strong portfolio performance, with a tenant occupancy rate of 99.7% and a same-store rent growth of 1.4%. The investment pipeline remains robust, supporting the company's investment guidance of $900 million to $1.1 billion for 2025. Essential Properties ended the quarter with a weighted average lease term of 14 years, a tenant unit-level rent coverage ratio of 3.5 times, and a pro forma leverage of 3.8 times. Despite competitive pressures resulting in modest cap rate compression, the company remains focused on maintaining tenant relationships and supporting growth across its portfolio.Essential Properties Realty Corporate Events
Business Operations and StrategyFinancial Disclosures
Essential Properties Realty Highlights Strong Financial Position
Positive
Mar 3, 2025
On March 3, 2025, Essential Properties Realty Trust, Inc. released an investor presentation detailing its financial and operational performance as of the end of 2024 and early 2025. The company reported a stable portfolio with a 99.7% lease rate and highlighted its strong balance sheet, including a $1.0 billion revolving credit facility. Essential Properties has maintained low leverage and excellent liquidity, with significant investments and capital recycling activities in early 2025. The company’s strategic focus on disciplined growth and risk management positions it well in the real estate market, with a continued emphasis on e-commerce resilient sectors.
Business Operations and StrategyFinancial Disclosures
Essential Properties Realty Updates 2025 AFFO Guidance
Positive
Feb 12, 2025
Essential Properties Realty Trust reported its fourth quarter and full-year 2024 financial results, revealing a robust investment performance with $333.4 million invested in the quarter and $1.2 billion for the year. Despite a 3% decrease in net income per share in the fourth quarter, the company saw a 7% increase in AFFO per share, highlighting its strong investment strategy and portfolio management. The company also updated its 2025 AFFO guidance to $1.85 to $1.89 per share, reflecting confidence in its continued growth and financial health.
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.