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NexPoint Residential (NXRT)
:NXRT

NexPoint Residential (NXRT) AI Stock Analysis

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NexPoint Residential

(NYSE:NXRT)

58Neutral
NexPoint Residential faces significant financial and operational challenges. While operational margins and strategic initiatives like stock repurchases and lease upgrades are positives, inconsistent profitability and weak cash flow management weigh heavily. The technical analysis suggests caution with potential downward momentum. The high P/E ratio raises valuation concerns, despite an attractive dividend yield. Earnings call insights indicate a mixed outlook, with positive FFO growth overshadowed by net losses and negative guidance.
Positive Factors
Earnings Performance
The company reported a core FFO number that was three cents higher than consensus estimates.
Financial Guidance
The company updated full year 2025 guidance with Core FFO per diluted share now expected between $2.61 and $2.89, up from $2.56-$2.83.
Liquidity Position
NXRT is in a strong liquidity position with approximately $23.7 million of cash and cash equivalents and $350 million free and clear under its credit facility.
Negative Factors
Debt Maturity
The company has no relevant debt maturing until 2031.
Growth Dependency
The company growth is dependent on internal growth, acquisitions and value enhancement to existing apartments.

NexPoint Residential (NXRT) vs. S&P 500 (SPY)

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 makes money through rental income generated from its portfolio of multifamily properties. The company focuses on acquiring undervalued properties where it can implement value-add strategies such as renovations and operational improvements to increase occupancy rates and rental income. By enhancing the properties, NXRT can charge higher rents, thereby boosting its overall revenue. Additionally, the company may engage in strategic property sales when market conditions are favorable, realizing capital gains that contribute to its earnings. NXRT's revenue model is heavily reliant on effective property management and maintaining high occupancy levels to ensure a steady stream of rental income.

NexPoint Residential Financial Statement Overview

Summary
NexPoint Residential's financial performance is mixed. Strong operational margins are offset by inconsistent profitability and weak cash flow management. The absence of debt is a positive but might not be sustainable if cash flow issues persist. Monitoring of revenue and profit volatility is essential.
Income Statement
65
Positive
NexPoint Residential has shown inconsistent revenue growth, with a slight decline in 2024, following growth in previous years. The gross profit margin in 2024 was strong at approximately 84.41%, but the net profit margin was low due to significantly reduced net income. Additionally, the EBIT and EBITDA margins were reasonable, indicating operational efficiency, although net income fluctuations point to volatility in profitability.
Balance Sheet
70
Positive
The company maintains a relatively strong equity position with a debt-to-equity ratio of 0 for 2024, indicating no debt burden, which is positive. However, the equity ratio decreased to about 21.51%, reflecting potential vulnerability to asset value fluctuations. The return on equity is low due to minimal net income, suggesting limited profitability relative to equity.
Cash Flow
50
Neutral
NexPoint Residential's cash flow statement indicates challenges, with zero operating and free cash flow in 2024, a significant drop from previous years. This raises concerns about cash management and operational cash generation. Historical free cash flow to net income ratios were omitted due to zero values, highlighting potential short-term liquidity issues.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
259.70M277.53M263.95M219.24M204.80M
Gross Profit
219.16M167.13M159.07M131.02M119.65M
EBIT
83.56M113.18M32.84M19.83M15.34M
EBITDA
202.99M250.01M130.49M151.30M165.13M
Net Income Common Stockholders
1.11M44.26M-64.80M-23.21M-2.51M
Balance SheetCash, Cash Equivalents and Short-Term Investments
23.15M12.37M16.76M49.45M24.46M
Total Assets
1.91B2.11B2.23B2.06B1.83B
Total Debt
1.46B1.48B1.60B1.55B1.35B
Net Debt
1.44B1.46B1.58B1.51B1.32B
Total Liabilities
1.49B1.61B1.70B1.59B1.42B
Stockholders Equity
410.37M494.62M519.67M469.85M407.93M
Cash FlowFree Cash Flow
73.57M96.58M79.10M73.27M57.23M
Operating Cash Flow
73.57M96.58M79.10M73.27M57.23M
Investing Cash Flow
130.62M51.92M-162.30M-235.91M11.50M
Financing Cash Flow
-195.55M-155.02M46.31M194.32M-82.90M

NexPoint Residential Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price37.28
Price Trends
50DMA
38.11
Negative
100DMA
39.40
Negative
200DMA
41.21
Negative
Market Momentum
MACD
-0.36
Negative
RSI
52.88
Neutral
STOCH
58.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NXRT, the sentiment is Neutral. The current price of 37.28 is above the 20-day moving average (MA) of 36.28, below the 50-day MA of 38.11, and below the 200-day MA of 41.21, indicating a neutral trend. The MACD of -0.36 indicates Negative momentum. The RSI at 52.88 is Neutral, neither overbought nor oversold. The STOCH value of 58.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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

Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
IRIRT
67
Neutral
$4.64B112.281.14%3.27%-3.17%
BRBRT
61
Neutral
$293.60M-4.52%6.41%2.15%-556.06%
61
Neutral
$58.45M46.22%10.13%7.65%42.14%
59
Neutral
$2.74B11.730.14%8782.99%5.34%-16.62%
58
Neutral
$955.76M866.190.25%5.20%-6.42%-98.33%
CSCSR
57
Neutral
$1.07B-1.53%5.07%-21.69%-154.55%
AIAIV
41
Neutral
$1.10B-44.01%11.60%36.23%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NXRT
NexPoint Residential
37.28
4.78
14.71%
AIV
Apartment Investment & Management
7.91
0.53
7.18%
CSR
Centerspace
60.36
-5.41
-8.23%
IRT
Independence Realty
19.43
4.17
27.33%
BRT
BRT Apartments
15.47
-1.85
-10.68%
CLPR
Clipper Realty
3.60
-0.26
-6.74%

NexPoint Residential Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: 1.75%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While there were positive developments in core FFO growth, dividend increases, and strategic stock repurchases, significant challenges were evident with a reported net loss, decreased revenue, and negative earnings guidance.
Q1-2025 Updates
Positive Updates
Core FFO Growth
Core FFO per diluted share increased to $0.75 in Q1 2025 from $0.74 in Q1 2024.
Dividend Increase
Quarterly dividend increased to $0.51 per share, marking a 147.6% increase since inception.
Successful Lease Upgrades
Completed 210 full and partial upgrades, leased 201 upgraded units with a 16.1% ROI.
Stock Repurchase Program
Purchased 223,109 shares at a 33% discount to NAV midpoint, valued at $7.6 million.
Decreased Supply Forecast
RealPage forecasts a 22% decline in deliveries in 2025 within key submarkets.
Negative Updates
Net Loss Reported
Net loss of $6.9 million or $0.27 per diluted share for the first quarter.
Decrease in Revenue and NOI
Total revenue decreased to $63.2 million, with NOI down to $37.8 million from $41.1 million.
Same-store Revenue Decline
Same-store rent and occupancy decreased by 1.3% and 0.3%, leading to a 3.8% decrease in same-store NOI.
Negative Earnings Per Share Guidance
Full-year 2025 guidance for earnings per diluted share revised to a midpoint of negative $1.22.
Company Guidance
During the first quarter of 2025 earnings call, NexPoint Residential Trust, Inc. provided updated guidance for the year. The company reported a net loss of $6.9 million, or $0.27 per diluted share, on revenue of $63.2 million, compared to a net income of $26.4 million or $1.00 earnings per diluted share on $67.6 million in revenue for the same period in 2024. The guidance for 2025 includes an earnings loss per diluted share between $1.08 and negative $1.36, with a midpoint of negative $1.22. The core FFO per diluted share is projected between $2.89 and $2.61, with a midpoint of $2.75. The company completed 210 unit upgrades in Q1, resulting in a $62 monthly rent premium and a 16.1% return on investment. NexPoint reaffirmed its same-store rental income and NOI guidance, while also announcing a quarterly dividend of $0.51 per share. The company engaged in a share buyback program, repurchasing approximately $7.6 million worth of common stock at an average price of $34.29 per share. Additionally, NexPoint entered into a new five-year $100 million SOFR swap with a fixed rate of 3.489%.

NexPoint Residential Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
NexPoint Residential Appoints New CFO Amid Leadership Shift
Neutral
Dec 27, 2024

NexPoint Residential Trust has announced a leadership transition, with Paul Richards appointed as the new Chief Financial Officer and principal financial officer effective January 1, 2025, following the resignation of Brian Mitts. This change is expected to influence the company’s financial management and operations as Richards brings experience from various affiliated real estate and finance positions, potentially impacting stakeholders by aligning the company’s strategic financial direction with its broader real estate and asset management objectives.

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.