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Gladstone Commercial Corp (GOOD)
NASDAQ:GOOD
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Gladstone Commercial
(NASDAQ:GOOD)
Rating:65Neutral
Price Target:
$15.50
▲( 11.91% Upside)
Positive Factors
Earnings
Shares of Gladstone Commercial have been assigned a $16.00 Price Target, implying a 12-month price-only return of 13.64%, bringing the total return to 22.16% including the current 8.52% dividend yield.
Property Acquisition
The company completed the acquisition of six properties comprising 355.8K sqft, fully occupied, for a total cost of $73.7 million, at a weighted average cap rate of 8.39%.
Rent Collection
The company successfully collected 100% of cash rents for the first quarter of 2025, with occupancy standing at 98.4%.
Negative Factors
Debt Level
The company does have a slightly higher than average level of debt and preferred totaling ~53% to total capitalization.
Gladstone Commercial (GOOD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$662.10M
Dividend Yield8.71%
Average Volume (3M)351.71K
Price to Earnings (P/E)49.1
Beta (1Y)0.70
Revenue Growth3.01%
EPS GrowthN/A
CountryUS
Employees69
SectorReal Estate
Sector Strength64
IndustryREIT - Diversified
Share Statistics
EPS (TTM)0.04
Shares Outstanding46,282,864
10 Day Avg. Volume442,954
30 Day Avg. Volume351,707
Financial Highlights & Ratios
PEG Ratio2.81
Price to Book (P/B)3.74
Price to Sales (P/S)0.00
P/FCF Ratio11.68
Enterprise Value/Market Cap1.51
Enterprise Value/Revenue1.68
Enterprise Value/Gross Profit8.41
Enterprise Value/Ebitda2.20
Forecast
1Y Price Target
$16.00Price Target Upside15.52% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Gladstone Commercial Business Overview & Revenue Model
Company DescriptionGladstone Commercial Corporation (GOOD) is a real estate investment trust (REIT) that focuses on acquiring, owning, and managing a diverse portfolio of net leased industrial and office properties across the United States. The company primarily invests in properties leased to established businesses in various sectors, aiming to provide stable and consistent returns to its shareholders through rental income and capital appreciation.
How the Company Makes MoneyGladstone Commercial makes money primarily through the acquisition and management of commercial real estate properties that are leased to businesses under long-term, net lease agreements. These agreements typically require tenants to cover most property-related expenses such as maintenance, taxes, and insurance, thus ensuring a steady stream of rental income for Gladstone. Additionally, the company seeks to generate revenue through strategic property acquisitions that offer potential for value appreciation and higher rental yields. Partnerships with established businesses and careful selection of tenants contribute to its earnings by reducing vacancy risks and enhancing property value over time.
Gladstone Commercial Financial Statement Overview
Summary
Gladstone Commercial shows solid financial health with consistent revenue and profit growth. The company maintains strong operational efficiency and cash flow generation. However, its high leverage could pose a risk in volatile markets. Overall, the financials reflect a stable and growing business with good cash flow management.Income Statement
Gladstone Commercial shows a solid upward trajectory in revenue with a TTM increase to $151.17M from $149.39M the previous year. Gross Profit Margin remains robust at 78.4%, while Net Profit Margin improved significantly, reflecting a positive shift to 16.9% from the prior year's 16.1%. The EBIT and EBITDA margins are stable at 34.8% and 78.3% respectively, indicating strong operational efficiency and cash flow generation.78
Positive
Balance Sheet
The balance sheet shows moderate leverage with a Debt-to-Equity ratio of 4.08, reflecting substantial reliance on debt financing. However, Return on Equity increased to 14.0%, suggesting improved profitability. The Equity Ratio stands at 15.8%, indicating a relatively small equity base compared to total assets, which poses a risk if market conditions worsen.60
Neutral
Cash Flow
Operating Cash Flow to Net Income Ratio is favorable at 2.33, indicating strong cash earnings. Free Cash Flow showed a steady increase, with no capital expenditures reported, but Free Cash Flow to Net Income Ratio is high at 2.33, suggesting robust cash flow compared to net income. However, fluctuations in investing cash flows suggest some volatility in capital allocation.72
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 151.17M | 149.39M | 147.58M | 148.98M | 137.69M | 133.15M | Gross Profit |
| 118.59M | 117.86M | 115.35M | 122.15M | 110.59M | 107.15M | EBIT |
| 52.66M | 51.14M | 50.78M | 43.77M | 37.75M | 37.31M | EBITDA |
| 118.40M | 117.23M | 101.30M | 100.86M | 96.97M | 90.51M | Net Income Common Stockholders |
| 25.61M | 24.00M | 4.99M | -23.18M | -19.99M | -12.26M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 10.45M | 10.96M | 11.98M | 11.65M | 7.96M | 11.02M | Total Assets |
| 1.11B | 1.09B | 1.13B | 1.20B | 1.14B | 1.10B | Total Debt |
| 723.60M | 697.45M | 743.95M | 754.51M | 713.03M | 674.38M | Net Debt |
| 713.15M | 686.49M | 731.97M | 742.86M | 705.08M | 663.36M | Total Liabilities |
| 956.91M | 923.05M | 809.16M | 996.94M | 940.79M | 881.87M | Stockholders Equity |
| 147.31M | 171.17M | 170.04M | 202.78M | 201.30M | 213.18M |
| Cash Flow | Free Cash Flow | ||||
| 59.61M | 56.95M | 60.37M | 62.35M | 64.78M | 59.13M | Operating Cash Flow |
| 59.61M | 56.95M | 60.37M | 69.18M | 70.13M | 65.49M | Investing Cash Flow |
| -95.84M | -1.73M | 1.14M | -82.51M | -94.78M | -100.26M | Financing Cash Flow |
| 36.67M | -56.29M | -61.36M | 16.15M | 21.75M | 39.35M |
Gladstone Commercial Technical Analysis
Negative
13.85
Price Trends
14.10
Negative
14.83
Negative
15.07
Negative
Market Momentum
-0.04
Positive
45.03
Neutral
16.65
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GOOD, the sentiment is Negative. The current price of 13.85 is below the 20-day moving average (MA) of 14.00, below the 50-day MA of 14.10, and below the 200-day MA of 15.07, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 45.03 is Neutral, neither overbought nor oversold. The STOCH value of 16.65 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GOOD.
Gladstone Commercial Risk Analysis
Gladstone Commercial disclosed 52 risk factors in its most recent earnings report. Gladstone Commercial 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 2 New Risks
1.
Adverse changes in our credit ratings could negatively affect our financing activity. Q4, 2024
2.
The 2029 Notes and certain of our other secured loans contain, and any other future indebtedness we incur may contain, various covenants, including business activity restrictions, and the failure to comply with those covenants could materially adversely affect us. Q4, 2024
Gladstone Commercial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $705.37M | 122.11 | 3.05% | 11.05% | -12.13% | -14.54% | |
70 Neutral | $526.47M | 18.02 | 9.57% | 7.59% | 1.82% | -1.03% | |
65 Neutral | $662.10M | 49.14 | 7.51% | 8.71% | 3.01% | ― | |
60 Neutral | $2.76B | 10.33 | 0.49% | 8508.28% | 5.95% | -17.56% | |
60 Neutral | $600.40M | 36.87 | -1.05% | 8.56% | 17.48% | -172.41% | |
57 Neutral | $440.54M | ― | -6.09% | 7.52% | -8.41% | 88.62% | |
50 Neutral | $662.75M | ― | -6.29% | 13.38% | -14.92% | -3.27% |
* Real Estate Sector Average
Performance Comparison
GOOD
Gladstone Commercial
13.85
0.75
5.73%
CTO
CTO Realty Growth
17.84
1.75
10.88%
OLP
One Liberty Properties
23.51
1.93
8.94%
AHH
Armada Hoffler Properties
6.96
-3.56
-33.84%
BRSP
BrightSpire Capital
5.08
-0.33
-6.10%
PKST
Peakstone Realty Trust
11.98
0.24
2.04%
Gladstone Commercial Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 0.87%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong performance in industrial property acquisitions and portfolio management. However, challenges such as economic uncertainty and increased operating expenses were noted. The company's strategic focus on industrial properties is a key strength, while the office sector remains a challenge.Q1-2025 Updates
Positive Updates
Strong Portfolio Performance
Gladstone Commercial Corporation maintained a portfolio occupancy rate of 98.4% as of March 31, 2025, with 100% collection of cash-based rents.
Increased Industrial Focus
The company increased its industrial concentration to 65% of annualized straight-line rent with $73.25 million in new industrial property acquisitions.
Positive Financial Metrics
Same-store rents increased by 6.6% year-over-year, with total operating revenues rising from $35.7 million in Q1 2024 to $37.5 million in Q1 2025.
Successful Capital Management
Net assets increased from $1.09 billion to $1.16 billion due to acquisitions, with a manageable debt profile and $99 million in liquidity available.
Negative Updates
Economic Uncertainty and Tariff Impact
The broader economic environment showed growing uncertainty due to recent tariff announcements, affecting companies with exposure to Asia.
Increased Operating Expenses
Operating expenses rose to $23.9 million in Q1 2025 from $23.3 million in Q1 2024 due to inflationary pressures and higher incentive fees.
Challenges in Office Property Sector
The company seeks to reduce its office property holdings, aiming to redeploy capital into industrial assets, highlighting issues in the office sector.
Company Guidance
During the first quarter of 2025 earnings call, Gladstone Commercial Corporation provided guidance emphasizing key metrics and operational strategies. The company reported 100% collection of cash-based rents from their industrial properties, which encompass 355,778 square feet valued at $73.25 million. They increased their industrial concentration to 65% of annualized straight-line rent and maintained a high portfolio occupancy rate at 98.4% as of March 31. They completed acquisitions worth over $73 million and disposed of properties, achieving gains of $377,000 and $3.9 million from sales. Financially, their FFO and Core FFO per share were $0.34, consistent with the previous year, while total operating revenues increased to $37.5 million. The company also highlighted a disciplined approach to acquisitions, with a focus on high-quality, mission-critical industrial assets and maintaining a strong balance sheet with $99 million available in credit and cash. Looking forward, they plan to continue acquiring industrial assets, extending leases, and improving their portfolio while managing leverage and exploring new financing opportunities.Gladstone Commercial Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Gladstone Commercial Announces Leadership Transition Plans
Neutral
Nov 15, 2024
Terry Lee Brubaker, the COO of Gladstone Commercial Corporation, will retire on December 2, 2024, marking a significant leadership change for the company. Michael LiCalsi, the General Counsel, will take on additional operational duties while a national search is conducted for a new Chief Investment Officer. This transition comes as Gladstone Commercial, a REIT known for its diverse portfolio of industrial and office properties, continues to grow its footprint across the U.S.
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.