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NexPoint Residential Trust Inc (NXRT)
NYSE:NXRT
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NexPoint Residential
(NYSE:NXRT)
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Rating:47Neutral
Price Target:
$28.00
▲(7.65% Upside)
Action:ReiteratedDate:02/27/26
The score is held down primarily by weakening profitability and high/rising leverage, reinforced by weak price momentum (below major moving averages with negative MACD). A high dividend yield and management’s liquidity position/buybacks provide partial support, but cautious 2026 guidance (negative EPS and lower Core FFO/share) and continued occupancy/NOI pressure limit the upside.
Positive Factors
Liquidity & interest-rate hedging
Material near-term liquidity and a lack of scheduled maturities through 2028 materially reduce refinancing risk and give management time to execute value‑add plans. Hedging ~62% of floating debt lowers interest‑rate sensitivity, preserving cash flow for operations, dividends, or targeted share buybacks.
Proven value-add program
A repeatable renovation program delivering ~20%+ ROI and meaningful monthly rent uplift demonstrates an internal growth engine independent of market rent trends. Scalable value‑adds support NAV per share expansion, improve asset-level economics, and provide durable upside even if broad rental markets stagnate.
Operating cash flow and Core FFO track record
Consistent Core FFO generation and an 8.5% since‑inception CAGR show resilient cash generation versus volatile accounting profits. Positive operating cash flow supports dividend funding, targeted capex, and selective buybacks, providing a durable financial base while management executes portfolio improvements.
Negative Factors
High and rising leverage
A materially higher leverage ratio increases refinancing, interest‑rate and covenant risk and reduces financial flexibility. Elevated debt amplifies downside in slower leasing cycles, constrains capital allocation choices (dividends, buybacks, capex) and leaves the balance sheet exposed until deleveraging occurs.
Profitability deterioration & negative EPS guidance
A shift to net losses and negative EPS guidance reflects sustained margin pressure (notably interest expense) that reduces retained earnings and long‑term reinvestment capacity. Prolonged unprofitability would strain dividend sustainability and limit the ability to self‑fund growth or accelerate deleveraging.
Occupancy/NOI weakness and rising expenses
Declining occupancy and same‑store NOI combined with above‑trend controllable expense growth will compress margins sustainably if trends persist. Higher utility, tax and bulk Wi‑Fi costs reduce operating leverage, making earnings and dividend coverage more sensitive to modest leasing shortfalls.
NexPoint Residential (NXRT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$663.62M
Dividend Yield7.06%
Average Volume (3M)151.16K
Price to Earnings (P/E)―
Beta (1Y)0.74
Revenue Growth-4.46%
EPS Growth-206.19%
CountryUS
Employees2
SectorReal Estate
Sector Strength53
IndustryREIT - Residential
Share Statistics
EPS (TTM)-0.41
Shares Outstanding25,411,251
10 Day Avg. Volume125,398
30 Day Avg. Volume151,158
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)2.59
Price to Sales (P/S)3.04
P/FCF Ratio9.14
Enterprise Value/Market Cap3.32
Enterprise Value/Revenue8.77
Enterprise Value/Gross Profit10.41
Enterprise Value/Ebitda5.81
Forecast
1Y Price Target
$31.00Price Target Upside19.18% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)-1.39
Revenue Forecast (FY)$256.69M
NexPoint Residential Business Overview & Revenue Model
Company DescriptionNexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol NXRT, primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with value-add potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of NexPoint Advisors, L.P., an SEC-registered investment advisor, which has extensive real estate experience.
How the Company Makes MoneyNexPoint Residential generates revenue primarily through rental income derived from leasing its multifamily properties to tenants. The company's revenue model is built on long-term leases, which provide predictable cash flows, while also engaging in short-term leases that can capture market rates. Key revenue streams include base rent, ancillary income from services such as parking fees, pet fees, and laundry facilities, as well as income from property management services. Additionally, NexPoint Residential may engage in property renovations and improvements to increase the value of its properties, thereby enhancing rental rates and occupancy levels. Strategic partnerships with property management firms and local real estate brokers also contribute to optimizing property performance and maximizing rental income.
NexPoint Residential Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 2026
Earnings Call Sentiment Neutral
The call presented a balanced picture: clear operational execution, disciplined capital deployment (buybacks, accretive acquisition), meaningful cost containment and strong liquidity are positives. Offsetting these are continued occupancy and NOI pressure, a full-year net loss, cautious 2026 guidance (negative EPS and lower Core FFO per share midpoint), and expense/tax headwinds. Management expressed cautious optimism about a Sun Belt recovery and execution of value-add plans, but near-term results and guidance remain muted.Q4-2025 Updates
Positive Updates
Improved Quarterly Results vs Prior Year
Q4 net loss narrowed to $10.3M ($0.41 per diluted share) from a $26.9M loss ($1.06 per diluted share) in Q4 2024 on total revenue of $62.1M (vs $63.8M). Q4 Core FFO was $16.5M or $0.65 per diluted share (vs $0.68).
Stable Full-Year Core FFO and Long-Term Growth
Full-year 2025 Core FFO was $71.3M or $2.79 per diluted share, unchanged vs 2024; since inception Core FFO has grown at an 8.54% compounded annual growth rate.
NAV and Capital Return Actions
NAV per share midpoint estimated at $48.57 (range $41.43–$55.72 based on 5.25%–5.75% cap rates). Company repurchased 223,109 shares in 2025 at an average price of $34.29 (~29% discount to NAV midpoint).
Dividend Progress and Coverage
Q4 dividend of $0.53 paid; dividends have increased 157.3% since inception. 2025 dividend was covered 1.35x by Core FFO with a payout ratio of 73.8% of Core FFO (target range 65%–75%).
Operational Efficiency and Expense Management
Same-store operating expenses declined 10 basis points for the year. Payroll decreased 3.7% YoY and office operations expense declined 80 basis points, driven by AI/centralization initiatives; R&M growth contained to 2.5% YoY.
Bad Debt and Leasing Metrics Improvement
Bad debt improved to 80 basis points of GPR (a 42% improvement YoY). Renewal conversions were 57.4% for the quarter and 54.25% for the full year; several markets (Tampa, Las Vegas, South Florida, Charlotte) delivered positive effective rent growth.
Value-Add Execution and Rent Upside
Completed 380 full/partial renovations in the quarter and leased 275 renovated units with an average monthly rent premium of $74 and a 22.2% ROI. Since inception installed 9,866 upgrades producing ~$158 average monthly rent uplift and ~20.9% ROI.
Strong Liquidity and Balanced Debt Profile
As of 12/31/2025 the company had $13.7M cash and $108.0M undrawn capacity ($121.7M available liquidity). No scheduled debt maturities until 2028. Total indebtedness ~$1.6B with an adjusted weighted average interest rate of 3.28% and interest rate swaps effectively fixing ~$900M (62%) of floating mortgage debt.
Accretive Acquisition Opportunity
Acquired Sedona at Lone Mountain in Las Vegas for $73.25M with a plan to improve economic occupancy ~900 bps over four years and target a 7.2% NOI CAGR through 2029, demonstrating disciplined value-add deployment.
Negative Updates
Full-Year Net Loss and YOY NOI Declines
Full-year 2025 net loss of $32.0M ($1.26 per diluted share) versus net income of $1.1M in 2024. Full-year NOI declined 3.4% to $151.7M on 35 properties; Q4 NOI declined 4.7% YoY and same-store NOI was down 4.8% in Q4.
Occupancy Pressure and Lower Same-Store Rents
Same-store occupancy closed at 92.7%, down 195 basis points YoY. Same-store rental income decreased 2.8% in Q4; same-store average effective rent finished at $1,489 per unit (down 10 bps YoY).
Cautious 2026 Guidance with Modest Top-Line Growth
2026 guidance midpoint expects modest rental income growth of 0.9% and total revenue growth of 1.1%, but same-store NOI midpoint is negative 0.5% (range -2.5% to +1.5%) and EPS is guided negative (midpoint -$1.40). Core FFO per share midpoint $2.57 (down from $2.79 in 2025).
Rising Expense Pressures Impacting Margins
Guidance assumes total expense growth of 3.5% at midpoint with controllable expense growth of 6.4% (80% of which driven by bulk Wi‑Fi costs). Real estate tax growth assumed +4.4% and utilities +4.5%, adding pressure to margins.
Concessions and Early-Year Leasing Weakness
Concession utilization increased in several markets (Phoenix, Orlando, South Florida, Atlanta). January blended rents: new leases -7%, blended -2.6%; February improved but still negative blended -1.8% (new leases -5.7%).
Earnings Sensitivity to Interest Expense
Management cited interest expense as the largest driver from 2025 results to 2026 guidance. Although swaps cover ~62% of floating mortgage debt, continued rate risk and higher interest expense contribute to negative EPS guidance.
Dividend and AFFO Coverage Concerns
While dividend is covered by Core FFO (target 65%–75%), an analyst noted dividend may not be covered after subtracting CapEx from AFFO; management reiterated dividend policy but guidance does not incorporate potential buybacks and AFFO-based coverage risk was raised.
Core FFO Growth Stagnation
Core FFO per share was flat YoY at $2.79 for full-year 2025, indicating limited near-term earnings growth and highlighting reliance on expense management and value-add programs to generate future upside.
Company Guidance
NexPoint’s 2026 guidance calls for rental income growth of 0.0%/0.9%/1.9% (low/mid/high), total revenue +0.1%/+1.1%/+2.0%, total expenses +4.2%/ +3.5%/+2.8%, same-store NOI -2.5%/-0.5%/+1.5%, diluted EPS -$1.54/-$1.40/-$1.26, and Core FFO per diluted share $2.42/$2.57/$2.71. Management models financial occupancy of 93.4%–94.1% (peak in Q3) and economic occupancy ~91.8% at the midpoint, stabilizing bad debt at ~80 bps (70–90 bps range) and concession utilization ~71 bps of GPR; midpoint total revenue growth of 1.1% is driven by ~0.9% rental growth, mid-single-digit other income, and ~40 bps of top-line lift from ROI CapEx. Expense assumptions include 6.4% controllable expense growth at the midpoint (80% due to bulk Wi‑Fi with direct revenue offset), -1% R&M/turn cost growth, $375k (8.4%) lower interior R&M turnover, 2% labor growth, 7.4% marketing, a 10 bp G&A increase, +4.5% utilities, -2.1% insurance, and +4.4% real estate taxes (taxes comprise 31% of the 3.5% midpoint expense increase). Value‑add plans assume ~300 full upgrades at $16,500/unit (avg $240/mo premium), ~400 partials at $3,500 (avg $70/mo), 680 W/D installs at $1,200 (avg $54/mo), targeting 15–20% ROI, and imply NAV/share of $41.43–$55.72 ($48.57 midpoint) using 5.25%–5.75% cap rates; management emphasized interest expense as the largest driver from 2025 to the 2026 midpoint.NexPoint Residential Financial Statement Overview
Summary
Mixed fundamentals skew negative: earnings deteriorated into a 2025 net loss (Income Statement score 46) and leverage is elevated and rising with meaningful capital-structure risk (Balance Sheet score 28). Operating cash flow remains positive (Cash Flow score 57), but free cash flow momentum has weakened, limiting flexibility for dividends, reinvestment, or deleveraging.Income Statement
Revenue has been relatively stable but uneven, with growth in 2025 (+8.6%) following a decline in 2024. Profitability has weakened materially: the company moved from solid net profitability in 2023 to near break-even in 2024 and a net loss in 2025, indicating pressure from costs, interest burden, or non-cash items. While gross profit margin improved sharply in 2025, the bottom line deterioration and margin volatility reduce earnings quality and visibility.46
Neutral
Balance Sheet
Leverage is high and rising, with debt-to-equity increasing from ~3.0x (2023) to ~5.3x (2025), leaving the company more exposed to refinancing risk and interest-rate sensitivity. Equity has declined versus prior years, and returns to shareholders turned negative in 2025 after modestly positive results in 2023–2024. Asset levels are relatively steady, but the capital structure is the clear weak point.28
Negative
Cash Flow
Operating cash flow remains positive across all periods and improved in 2025 versus 2024, supporting ongoing operations. However, free cash flow has contracted meaningfully in 2024 and 2025 (negative growth both years), suggesting reduced cushion for dividends, debt paydown, or reinvestment. Cash generation looks more resilient than reported earnings in 2025, but the downward trend in free cash flow is a key watch item.57
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 251.28M | 259.70M | 277.53M | 263.95M | 219.24M |
| Gross Profit | 211.72M | 146.47M | 157.58M | 143.89M | 117.05M |
| EBITDA | 124.46M | 202.99M | 250.01M | 138.94M | 137.39M |
| Net Income | -32.03M | 1.11M | 44.26M | -9.26M | 23.04M |
Balance Sheet | |||||
| Total Assets | 1.89B | 1.91B | 2.11B | 2.23B | 2.06B |
| Cash, Cash Equivalents and Short-Term Investments | 13.70M | 23.15M | 12.37M | 127.84M | 53.24M |
| Total Debt | 1.56B | 1.46B | 1.48B | 1.60B | 1.55B |
| Total Liabilities | 1.59B | 1.49B | 1.61B | 1.70B | 1.59B |
| Stockholders Equity | 295.50M | 410.37M | 494.62M | 519.67M | 469.85M |
Cash Flow | |||||
| Free Cash Flow | 83.59M | 73.57M | 96.58M | 79.10M | 73.27M |
| Operating Cash Flow | 83.59M | 73.57M | 96.58M | 79.10M | 73.27M |
| Investing Cash Flow | -115.75M | 130.62M | 51.92M | -162.30M | -235.91M |
| Financing Cash Flow | 23.42M | -195.55M | -155.02M | 46.31M | 194.32M |
NexPoint Residential Technical Analysis
Negative
26.01
Price Trends
28.84
Negative
29.13
Negative
30.18
Negative
Market Momentum
-0.91
Positive
32.29
Neutral
15.92
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NXRT, the sentiment is Negative. The current price of 26.01 is below the 20-day moving average (MA) of 27.38, below the 50-day MA of 28.84, and below the 200-day MA of 30.18, indicating a bearish trend. The MACD of -0.91 indicates Positive momentum. The RSI at 32.29 is Neutral, neither overbought nor oversold. The STOCH value of 15.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NXRT.
NexPoint Residential Risk Analysis
NexPoint Residential disclosed 80 risk factors in its most recent earnings report. NexPoint Residential 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
NexPoint Residential Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
63 Neutral | $1.26B | 51.05 | 2.88% | 5.66% | 8.91% | -39.58% | |
62 Neutral | $1.76B | 18.46 | 5.33% | 2.17% | 3.37% | ― | |
55 Neutral | $1.06B | 63.46 | -4.93% | 4.58% | 36.82% | ― | |
52 Neutral | $270.51M | -15.32 | -4.96% | 6.98% | 1.62% | 11.38% | |
47 Neutral | $663.62M | -23.86 | -12.63% | 7.06% | -4.46% | -206.19% | |
45 Neutral | $610.01M | 1.50 | 342.51% | 7.42% | -4.63% | 42.39% |
* Real Estate Sector Average
NXRT
NexPoint Residential
26.01
-10.24
-28.25%
AIV
Apartment Investment & Management
4.24
-0.46
-9.75%
VRE
Veris Residential
18.86
2.89
18.10%
UMH
Umh
14.80
-2.45
-14.19%
CSR
Centerspace
60.18
-0.55
-0.90%
BRT
BRT Apartments
14.25
-2.86
-16.74%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.