Modiv (MDV) AI Stock Analysis

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Modiv

(NYSE:MDV)

Rating:66Neutral

Price Target:

$16.00

▲(11.73%Upside)

Modiv's strong operational efficiency and robust cash flow management are significant strengths, supported by a debt-free position. However, challenges like inconsistent profitability, high leverage, and valuation concerns due to a high P/E ratio offset these strengths. The stock is moderately positioned with a cautiously optimistic outlook.

Positive Factors

Financial Performance

The company reported AFFO numbers of $0.33, four cents higher than consensus numbers and three cents higher than analyst numbers, representing an 18% increase year-over-year.

Geographic Advantage

The company's assets are strategically located in California and the Sunbelt region, areas experiencing net migration.

Strategic Focus

The focus on manufactured industrial and the selling of retail and office properties has mostly occurred, benefiting from well-located unique assets and an attractive valuation.

Negative Factors

Debt Levels

The company has slightly elevated leverage with debt and preferred to total market cap at approximately 66.5%.

Indebtedness

The company has $280 million of indebtedness, which is 100% fixed rate with no outstanding debt maturities until January 2027.

Leverage Concerns

The company has above average leverage with debt and preferred to total market cap at approximately 64%.

Modiv (MDV) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$144.90M

Dividend Yield8.16%

Average Volume (3M)48.66K

Price to Earnings (P/E)75.1

Beta (1Y)0.23

Revenue Growth-4.13%

EPS Growth79.39%

CountryUS

Employees12

SectorReal Estate

Sector Strength69

IndustryREIT - Diversified

Share Statistics

EPS (TTM)-0.01

Shares Outstanding10,119,017

10 Day Avg. Volume43,820

30 Day Avg. Volume48,665

Financial Highlights & Ratios

PEG Ratio0.01

Price to Book (P/B)0.82

Price to Sales (P/S)0.00

P/FCF Ratio8.87

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$17.88

Price Target Upside24.86% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering4

Modiv Business Overview & Revenue Model

Company DescriptionModiv (MDV) is a real estate investment trust (REIT) that focuses on acquiring, managing, and growing a diversified portfolio of commercial properties. The company primarily invests in single-tenant net lease retail, office, and industrial properties, providing investors access to stable, income-generating assets. Modiv aims to deliver consistent returns to its shareholders through strategic property acquisitions and proactive asset management.

How the Company Makes MoneyModiv generates revenue primarily through rental income from its portfolio of commercial properties. The company employs a net lease structure, where tenants are responsible for paying a significant portion of the property's operating expenses, such as maintenance, taxes, and insurance, in addition to the base rent. This model ensures predictable income for Modiv, as it reduces the variable costs associated with property management. Additionally, Modiv may engage in property sales or refinancing to unlock value from its assets, further contributing to its earnings. Key partnerships with real estate brokers, property managers, and institutional investors also support Modiv's growth and revenue generation.

Modiv Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: -1.78%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted positive financial metrics such as increased AFFO and strong debt management, alongside challenges including rental income decline and market volatility. The company's strategic buyback of preferred shares and regular dividends were positive, but market uncertainties and asset disposition difficulties presented concerns.

Q1-2025 Updates

Positive Updates

Adjusted Funds From Operations (AFFO) Increase

AFFO was $3.9 million, an 18% increase compared to $3.3 million in the same quarter of the previous year, driven by a $195,000 increase in cash rental income, $200,000 decrease in cash interest expense, and $140,000 decrease in property expenses.

Strong Portfolio with Long Lease Terms

The company has a weighted average lease term of 14.2 years, with manufacturing leases extending beyond 20 years, ensuring stable long-term income.

Successful Debt Management

100% of indebtedness is at a fixed interest rate of 4.27%, and there are no debt maturities until January 2027, reducing financial risk.

Preferred Shares Buyback

The company repurchased 13.8% of its preferred shares outstanding, which will save over $400,000 annually in preferred dividends.

Regular Dividend Payments

The Board declared a cash dividend for common shares of $0.0975 for each of the months of April, May, and June 2025, representing an annualized dividend rate of $1.17 per share, yielding 8%.

Negative Updates

Rental Income Decline

Rental income decreased by 2% to $11.7 million from $11.9 million due to the disposition of two properties with expiring leases.

Headcount Reduction and Non-recurring Expenses

The company reduced its headcount from 12 to 9 employees and incurred $200,000 in non-recurring separation pay.

Market Volatility Concerns

Significant market volatility and uncertainty were discussed, impacting the company's stock price and market perception.

Challenges in Asset Dispositions

Difficulty in selling or leasing the vacant Minneapolis asset, which is not expected to resolve quickly.

Potential Delays in Asset Sales

The sale of the Costco property is subject to potential delays due to municipal approval processes and market conditions.

Company Guidance

During Modiv Industrial Inc.'s first quarter 2025 earnings call, several key metrics and guidance were shared. The company's rental income for the quarter was $11.7 million, reflecting a 2% decrease from the prior year due to property dispositions. However, the adjusted funds from operations (AFFO) increased by 18% to $3.9 million compared to the previous year. The weighted average lease term across Modiv's portfolio is 14.2 years, with 43 properties and an annualized base rent of $39.4 million. Approximately 30% of tenants have an investment-grade credit rating, and the company's leverage ratio was reported at 47.6% with total debt of $280 million. The board declared a cash dividend of $0.0975 per share for each of the months of April, May, and June 2025, translating to an annualized yield of 8%. The company remains cautious about acquisitions due to the current economic environment but continues to explore opportunities for growth and capital recycling.

Modiv Financial Statement Overview

Summary

Modiv has demonstrated strong revenue growth and operational efficiency but struggles with consistent profitability. The recent elimination of debt enhances financial stability, and cash flow management is robust, though free cash flow growth is inconsistent.

Income Statement

Positive

Modiv has shown growth in revenue over the years, albeit with some volatility. The gross profit margin remains strong, indicating efficient cost management, with a notable improvement in EBIT and EBITDA margins annually. However, net income has been inconsistent, showing significant losses in several years, which affects overall profitability.

Balance Sheet

Positive

The balance sheet indicates a solid equity position with a debt-free status in the latest year, which significantly improves financial stability. The return on equity has been erratic due to fluctuating net income. The equity ratio is healthy, reflecting strong financial footing, although past years show a reliance on debt financing.

Cash Flow

Positive

Cash flow from operations has steadily improved, translating into positive free cash flow, which demonstrates good cash generation capacity. The operating cash flow to net income ratio is favorable, suggesting effective conversion of income into cash flow. However, fluctuations in free cash flow growth indicate potential volatility.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
46.50M	46.94M	46.17M	36.22M	38.90M
	Gross Profit
42.88M	41.78M	37.27M	29.53M	31.90M
	EBIT
21.98M	2.31M	12.53M	2.20M	5.43M
	EBITDA
42.47M	23.43M	27.46M	32.55M	21.65M
	Net Income Common Stockholders
2.33M	-6.61M	-19.93M	-8.58M	-62.32M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
11.53M	3.13M	8.61M	55.97M	8.25M
	Total Assets
507.83M	530.90M	456.03M	428.49M	407.43M
	Total Debt
279.90M	279.73M	195.45M	181.95M	191.51M
	Net Debt
268.38M	276.60M	186.85M	125.98M	183.27M
	Total Liabilities
293.78M	305.77M	214.99M	206.06M	217.18M
	Stockholders Equity
190.15M	144.44M	159.75M	171.83M	139.65M
Cash Flow		Free Cash Flow
18.24M	16.58M	10.15M	9.53M	5.01M
	Operating Cash Flow
18.24M	16.58M	16.65M	9.73M	5.58M
	Investing Cash Flow
8.39M	-93.60M	-61.06M	21.83M	24.78M
	Financing Cash Flow
-18.23M	71.54M	-5.38M	18.47M	-28.91M

Modiv Technical Analysis

Technical Analysis Sentiment

Negative

Last Price14.32

Price Trends

50DMA

15.23

Negative

100DMA

14.96

Negative

200DMA

15.22

Negative

Market Momentum

MACD

-0.30

Positive

RSI

41.14

Neutral

STOCH

13.69

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MDV, the sentiment is Negative. The current price of 14.32 is below the 20-day moving average (MA) of 14.93, below the 50-day MA of 15.23, and below the 200-day MA of 15.22, indicating a bearish trend. The MACD of -0.30 indicates Positive momentum. The RSI at 41.14 is Neutral, neither overbought nor oversold. The STOCH value of 13.69 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MDV.

Modiv Risk Analysis

Modiv disclosed 58 risk factors in its most recent earnings report. Modiv 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 3 New Risks

Our Operating Partnership may issue additional OP Units to third parties without the consent of our stockholders, which would reduce our ownership percentage in our Operating Partnership and could have a dilutive effect on the amount of distributions made to us by our Operating Partnership and, therefore, the amount of distributions we can make to our stockholders. Q4, 2024

Our stockholders may have current tax liability on distributions if they elect to reinvest in shares of our common stock. Q4, 2024

the profitability of our properties. Q4, 2024

Modiv Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MDV	66 Neutral	$144.90M	75.12	1.54%	8.16%	-4.13%	79.39%
Sector *	60 Neutral	$2.76B	10.59	0.51%	8507.90%	5.51%	-19.44%
FVR	52 Neutral	$217.58M	―	-0.37%	1.91%	―	―
MDRR	49 Neutral	$25.85M	471.19	-16.85%	2.04%	-10.27%	-32.99%
SQFT	46 Neutral	$7.21M	―	-49.21%	4.02%	2.72%	-584.61%
GIPR	44 Neutral	$8.93M	―	-110.42%	28.54%	10.31%	39.90%
MKZR	36 Underperform	$13.95M	―	-28.98%	69.94%	43.87%	-4679.89%

* Real Estate Sector Average

Performance Comparison

MDV

Modiv

14.32

0.26

1.85%

MDRR

Medalist Diversified REIT

11.64

0.11

0.95%

GIPR

Generation Income Properties

1.62

-2.71

-62.59%

SQFT

Presidio Property Trust

5.89

-2.11

-26.38%

FVR

FrontView REIT, Inc.

11.40

-7.43

-39.46%

MKZR

MacKenzie Realty Capital, Inc.

0.89

-4.00

-81.80%

Modiv Corporate Events

Stock BuybackBusiness Operations and StrategyFinancial Disclosures

Modiv Reports Q1 2025 Financial Results and Lease Renewal

Positive

May 7, 2025

On May 7, 2025, Modiv Industrial announced its first quarter 2025 financial results, reporting a revenue of $11.8 million and a net income of $2,000 attributable to common stockholders. The company achieved an 18% year-over-year increase in AFFO, beating consensus estimates. Modiv also executed a 10-year lease renewal with FujiFilm and repurchased 275,000 shares of preferred stock. The company highlighted its support for U.S. manufacturing amid tariff impacts, noting that its tenants have not experienced significant negative effects from recent tariffs, and emphasized the potential for increased utilization of existing manufacturing assets.

Dividends

Modiv Announces Quarterly Dividend and Monthly Distributions

Positive

Mar 13, 2025

On March 13, 2025, Modiv Industrial announced the declaration of a quarterly dividend for its Series A Preferred Stock and monthly distributions for its Class C common stock for April, May, and June 2025. The quarterly dividend for the Series A Preferred Stock is set at $0.4609375 per share, payable on April 15, 2025, while the monthly distribution for the common stock is $0.0975 per share, maintaining an annualized rate of $1.17. These announcements reflect Modiv’s ongoing commitment to providing consistent returns to its shareholders, with the common stock yielding a 7.67% dividend based on the closing price as of March 12, 2025.

Business Operations and StrategyFinancial Disclosures

Modiv Reports Strong 2024 Financial Results and Growth Plans

Positive

Mar 4, 2025

On March 4, 2025, Modiv Industrial announced its financial results for the fourth quarter and full year ending December 31, 2024. The company reported a full-year net income of $2.3 million and an AFFO of $14.99 million, surpassing street expectations. Modiv also highlighted its strategic approach to acquisitions and cost savings, securing over $1.4 million in cash expense savings for 2025. The company remains focused on disciplined growth and efficiency, with plans to enhance shareholder value through prudent acquisitions and operational improvements.

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.