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Independence Realty (IRT)
NYSE:IRT
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Independence Realty
(NYSE:IRT)
67Neutral
Positive Factors
Financial performance
The ongoing value-add portfolio is expected to generate a 15.6% return on investment on total costs.
Liquidity and financial flexibility
IRT is in a strong liquidity position with approximately $21.2 million of cash and cash equivalents, and substantial availability under its credit facilities.
Market position
IRT offers investors differentiated class & geographic exposure, with upside from external growth and redevelopment.
Negative Factors
Lease growth
New supply has negatively impacted blended lease growth, leading IRT to reduce SS Revenue guidance twice this year.
Leasing recovery
The Core FFO estimate for 2025 is lowered, reflecting a slower pace of leasing recovery.
Return on investment
Rent increases on IRT's value-add program have flatlined, causing ROI on the program to decline.
Independence Realty (IRT) vs. S&P 500 (SPY)
Market Cap
$4.64B
Dividend Yield3.27%
Average Volume (3M)2.08M
Price to Earnings (P/E)111.4
Beta (1Y)0.91
Revenue Growth-3.17%
EPS GrowthN/A
CountryUS
Employees917
SectorReal Estate
Sector Strength77
IndustryREIT - Residential
Share Statistics
EPS (TTM)0.17
Shares Outstanding231,116,970
10 Day Avg. Volume1,707,719
30 Day Avg. Volume2,077,500
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)7.48
Price to Cash Flow (P/CF)18.90
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$22.70Price Target Upside15.93% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
Independence Realty Business Overview & Revenue Model
Company DescriptionIndependence Realty (IRT) is a real estate investment trust (REIT) that specializes in the acquisition, ownership, operation, and management of multifamily apartment communities. The company primarily focuses on offering high-quality residential living spaces in various urban and suburban markets across the United States. IRT aims to provide exceptional living experiences to its residents while generating sustainable long-term returns for its investors.
How the Company Makes MoneyIndependence Realty makes money primarily through rental income generated from its multifamily apartment communities. As a REIT, IRT acquires and manages residential properties, collecting rental payments from tenants as the primary source of revenue. Additionally, the company may earn income from property management fees and service charges associated with maintaining and operating its properties. IRT's earnings are also influenced by strategic acquisitions and renovations that can enhance property value and increase rental rates. The company benefits from economies of scale and a diversified property portfolio, which helps mitigate risks and stabilize cash flow. Partnerships with local developers and real estate professionals can also contribute to the company's growth and profitability.
Independence Realty Financial Statement Overview
Summary
Independence Realty has demonstrated strong operational metrics and a solid balance sheet. The income statement indicates volatility in revenue growth and profit margins, but operational efficiency is improving. The balance sheet is robust with no debt and strong equity, while cash flow is resilient but variable in converting income to cash.Income Statement
Independence Realty has shown a strong gross profit margin due to its effective cost management, maintaining high levels of gross profit relative to total revenue. The net profit margin, while positive in 2024, reflects volatility due to past losses. Revenue growth has been inconsistent, but the company has demonstrated an ability to improve EBIT and EBITDA margins, indicating operational efficiency improvements.75
Positive
Balance Sheet
The balance sheet is strengthened by a healthy equity position, with no current total debt reported in 2024, which significantly improves the debt-to-equity ratio. The return on equity (ROE) shows positive, albeit moderate, returns, indicating the company is generating reasonable income from its equity base. The equity ratio reflects a stable financial structure with a significant portion of assets financed by equity.80
Positive
Cash Flow
Operating cash flow remains robust, supporting the company's ability to generate cash from its core operations. Free cash flow has grown, demonstrating effective capital expenditure management. However, fluctuations in free cash flow to net income ratios indicate variability in translating earnings into cash, which could pose a risk if not stabilized.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 640.03M | 660.98M | 628.52M | 250.25M | 211.91M | Gross Profit |
| 640.03M | 167.37M | 372.22M | 147.46M | 120.43M | EBIT |
| 0.00 | 147.84M | 92.50M | 51.94M | 44.52M | EBITDA |
| 337.03M | 291.08M | 345.35M | 220.88M | 105.21M | Net Income Common Stockholders |
| 39.29M | -17.23M | 33.70M | 8.19M | -21.59M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 21.23M | 22.85M | 16.08M | 35.97M | 8.75M | Total Assets |
| 6.06B | 6.28B | 6.53B | 6.51B | 1.73B | Total Debt |
| 2.33B | 2.43B | 4.60B | 2.71B | 945.69M | Net Debt |
| 2.31B | 2.38B | 4.59B | 2.67B | 936.93M | Total Liabilities |
| 2.48B | 2.71B | 2.79B | 2.86B | 1.02B | Stockholders Equity |
| 3.44B | 3.43B | 3.60B | 3.48B | 708.06M |
| Cash Flow | Free Cash Flow | |||
| 84.69M | 115.54M | 165.56M | 9.28M | 37.56M | Operating Cash Flow |
| 259.75M | 262.17M | 249.54M | 52.26M | 74.96M | Investing Cash Flow |
| -20.61M | -1.71M | -135.77M | -216.12M | -124.54M | Financing Cash Flow |
| -246.43M | -253.74M | -135.43M | 215.92M | 48.76M |
Independence Realty Technical Analysis
Neutral
19.58
Price Trends
20.22
Negative
19.97
Negative
19.77
Negative
Market Momentum
-0.27
Negative
50.10
Neutral
80.44
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IRT, the sentiment is Neutral. The current price of 19.58 is above the 20-day moving average (MA) of 19.41, below the 50-day MA of 20.22, and below the 200-day MA of 19.77, indicating a neutral trend. The MACD of -0.27 indicates Negative momentum. The RSI at 50.10 is Neutral, neither overbought nor oversold. The STOCH value of 80.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IRT.
Independence Realty Risk Analysis
Independence Realty disclosed 75 risk factors in its most recent earnings report. Independence 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
Independence Realty Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $4.64B | 111.42 | 1.14% | 3.27% | -3.17% | ― | |
61 Neutral | $295.11M | ― | -4.52% | 6.41% | 2.15% | -556.06% | |
60 Neutral | $1.44B | 527.88 | 2.67% | 4.94% | 8.88% | ― | |
59 Neutral | $2.72B | 11.59 | 0.11% | 8770.69% | 5.44% | -16.52% | |
57 Neutral | $1.05B | ― | -1.53% | 5.06% | -21.69% | -154.55% | |
50 Neutral | $934.99M | 865.72 | 0.25% | 5.33% | -6.42% | -98.33% | |
41 Neutral | $1.10B | ― | -44.01% | ― | 11.60% | 36.23% |
* Real Estate Sector Average
Performance Comparison
IRT
Independence Realty
19.58
4.13
26.73%
AIV
Apartment Investment & Management
7.72
0.20
2.66%
UMH
Umh
17.48
2.30
15.15%
CSR
Centerspace
59.52
-2.35
-3.80%
BRT
BRT Apartments
15.59
-1.49
-8.72%
NXRT
NexPoint Residential
36.47
4.69
14.76%
Independence Realty Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -1.71% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with significant achievements in FFO growth, occupancy rates, and strategic acquisitions. While there are challenges related to supply pressures in specific markets and declining new lease rates, the overall outlook remains positive with strategic initiatives in place to drive future growth.Highlights
Strong Core FFO Growth
Core FFO per share for 2024 was $1.16, at the high end of guidance, driven by solid same-store NOI growth of 3.2%.
High Occupancy and Rent Growth
Same-store average occupancy increased by 110 basis points to 95.2%, with a 1.3% increase in average effective rental rates.
Successful Value-Add Program
Completed 1,671 renovations, driving a $239 average increase in monthly rent per unit and a 15% return on investment.
Investment-Grade Rating Achievement
Achieved triple B flat rating with a stable outlook from both S&P and Fitch, improving financial flexibility and reducing cost of debt.
Strategic Acquisitions
Invested $240 million at a blended economic cap rate of 5.7% in high-growth markets, expanding presence in Charlotte, Tampa, and Indianapolis.
Improved Debt Metrics
Reduced net debt to adjusted EBITDA nearly a full turn to 5.9 times, with plans to further improve this ratio in 2025.
Lowlights
Decline in New Lease Rates
New lease rates were down 4.6% in Q4 2024, with similar negative trends continuing into early 2025.
Supply Pressures in Specific Markets
Supply pressures continue in markets like Denver and Charlotte, with supply expected to increase by 5.4% combined in 2025.
Impairment Charge
Recognized an impairment of $21 million on a legacy asset, indicating challenges in certain non-core markets.
Company Guidance
During the Independence Realty Trust Q4 earnings call, guidance for 2025 highlighted expectations for core FFO per share to range between $1.16 and $1.19, driven by same-store NOI growth of 2.1% at the midpoint. The company plans to renovate 2,500 to 3,000 units, aiming for a 1.6% blended rental rate growth, with the majority occurring in the second half of the year. Investment plans include acquiring approximately $240 million in properties, supported by nearly three-quarters of a billion dollars in liquidity. The company also aims to further reduce its net debt to adjusted EBITDA ratio to the mid-5s by year-end, enhancing financial flexibility and capitalizing on a forecasted decline in new supply and strong demand fundamentals in their markets.Independence Realty Corporate Events
Private Placements and FinancingBusiness Operations and StrategyFinancial Disclosures
Independence Realty Highlights 2024 Achievements and 2025 Outlook
Positive
Feb 28, 2025
In its recent investor presentation, Independence Realty Trust highlighted its strategic milestones achieved in 2024, including raising $268 million in equity capital and acquiring three communities to expand its market presence. The company reduced leverage and achieved an investment-grade issuer rating. For 2025, IRT provided guidance indicating strong improvement in fundamentals, with expected growth in net operating income and core funds from operations per share. The company plans to continue its Value Add renovation program, which has historically generated significant returns, and aims to leverage its liquidity and flexible balance sheet to drive further growth.
Business Operations and StrategyFinancial Disclosures
Independence Realty Reports Strong Q4 2024 Results
Positive
Feb 12, 2025
Independence Realty Trust reported strong financial results for the fourth quarter and full year of 2024, achieving the high end of its guidance with a core funds from operations (CFFO) per share of $1.16 and net operating income (NOI) growth of 3.2%. The company saw a significant improvement in its financial position with a net debt-to-Adjusted EBITDA ratio decrease to 5.9x and a renewed and expanded unsecured line of credit. These achievements were supported by strategic renovations in their value-add program, leading to a 15.7% return on investment, and an improved S&P credit rating to BBB. As the company looks forward to 2025, it is poised for further growth by capitalizing on positive market trends.
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.