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Orion Office REIT (ONL)
NYSE:ONL
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Orion Office REIT
(NYSE:ONL)
48Neutral
Orion Office REIT (ONL) vs. S&P 500 (SPY)
Market Cap
$103.35M
Dividend Yield17.39%
Average Volume (3M)833.21K
Price to Earnings (P/E)―
Beta (1Y)1.41
Revenue Growth-15.46%
EPS Growth-81.31%
CountryUS
Employees40
SectorReal Estate
Sector Strength74
IndustryREIT - Office
Share Statistics
EPS (TTM)-1.84
Shares Outstanding56,170,807
10 Day Avg. Volume709,548
30 Day Avg. Volume833,206
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.79
Price to Cash Flow (P/CF)2.60
P/FCF Ratio2.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering1
Orion Office REIT Business Overview & Revenue Model
Company DescriptionOrion Office REIT (ONL) is a real estate investment trust focused on owning and operating a diversified portfolio of office properties across the United States. The company specializes in acquiring high-quality, single-tenant office assets, primarily leased to creditworthy tenants on long-term leases. Orion Office REIT aims to provide stable and growing cash flows through strategic acquisitions and proactive asset management.
How the Company Makes MoneyOrion Office REIT makes money primarily through the rental income generated from its portfolio of office properties. The company leases its properties to tenants under long-term agreements, ensuring a steady stream of revenue. These leases often include periodic rent escalations and contractual obligations that enhance income stability. Additionally, Orion may engage in strategic property sales to realize gains, contributing to its overall profitability. The company's focus on single-tenant, net-leased properties ensures that tenants are responsible for most property-related expenses, allowing Orion to maintain a lean operational structure. Partnerships with real estate brokers and financial institutions also play a crucial role in identifying acquisition opportunities and securing financing at favorable terms, further supporting Orion's revenue generation.
Orion Office REIT Financial Statement Overview
Summary
Orion Office REIT faces financial challenges with declining revenues and profitability issues, as seen in its income statement. However, the company's balance sheet shows improved leverage with no debt by the end of 2024, which strengthens its financial position. Cash flow management remains a strength, with positive free cash flow despite earnings challenges. The company needs to focus on revenue growth and operational efficiency to enhance its overall financial health.Income Statement
Orion Office REIT's revenue has been declining over the past years, with a significant decrease from $208.1M in 2022 to $164.9M in 2024. The company's gross profit margin is relatively stable but has been accompanied by negative EBIT and net income margins, indicating operational inefficiencies and challenges in achieving profitability.45
Neutral
Balance Sheet
The company's debt-to-equity ratio improved significantly in 2024 due to the reduction in total debt to zero, enhancing financial stability. However, stockholders' equity has decreased over recent years, reflecting potential challenges in maintaining asset quality and financial health.55
Neutral
Cash Flow
Despite declining operating cash flow, Orion Office REIT has maintained positive free cash flow, indicating good cash management practices. The free cash flow to net income ratio is positive, but the operating cash flow to net income ratio reflects ongoing struggles with achieving profitability.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 164.86M | 195.04M | 208.12M | 79.73M | 53.47M | Gross Profit |
| 99.71M | 133.75M | 146.60M | 66.32M | 47.70M | EBIT |
| -69.29M | 6.43M | -977.00K | 18.51M | 19.70M | EBITDA |
| 30.70M | 115.54M | 130.69M | 62.49M | 44.85M | Net Income Common Stockholders |
| -103.01M | -57.30M | -97.47M | -44.67M | -4.83M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 15.60M | 22.47M | 20.64M | 29.32M | 0.00 | Total Assets |
| 1.34B | 1.42B | 1.57B | 1.76B | 546.43M | Total Debt |
| 510.82M | 476.93M | 540.05M | 637.46M | 37.05M | Net Debt |
| 495.22M | 454.46M | 519.41M | 608.14M | 37.05M | Total Liabilities |
| 571.17M | 536.93M | 595.22M | 671.19M | 49.31M | Stockholders Equity |
| 763.92M | 885.62M | 974.47M | 1.09B | 497.12M |
| Cash Flow | Free Cash Flow | |||
| 54.26M | 70.65M | 102.61M | 46.19M | 41.86M | Operating Cash Flow |
| 54.26M | 89.09M | 114.23M | 56.11M | 42.33M | Investing Cash Flow |
| -51.26M | 5.29M | 22.48M | -12.26M | -464.00K | Financing Cash Flow |
| -3.02M | -92.49M | -110.72M | -18.44M | -41.67M |
Orion Office REIT Technical Analysis
Negative
1.84
Price Trends
3.27
Negative
3.55
Negative
3.60
Negative
Market Momentum
-0.37
Negative
22.36
Positive
13.82
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ONL, the sentiment is Negative. The current price of 1.84 is below the 20-day moving average (MA) of 2.25, below the 50-day MA of 3.27, and below the 200-day MA of 3.60, indicating a bearish trend. The MACD of -0.37 indicates Negative momentum. The RSI at 22.36 is Positive, neither overbought nor oversold. The STOCH value of 13.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ONL.
Orion Office REIT Risk Analysis
Orion Office REIT disclosed 53 risk factors in its most recent earnings report. Orion Office REIT 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
Orion Office REIT Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $4.56B | 90.99 | 0.98% | 4.71% | 6.71% | -45.29% | |
61 Neutral | $4.72B | 17.64 | -3.07% | 10.89% | 5.99% | -21.86% | |
60 Neutral | $10.89B | 692.48 | 0.23% | 6.26% | 4.10% | -92.47% | |
58 Neutral | $12.95B | 805.70 | 1.32% | 2.18% | -1.30% | -80.81% | |
55 Neutral | $3.17B | 31.39 | 4.27% | 6.78% | -0.98% | -32.02% | |
52 Neutral | $3.98B | 670.74 | 0.71% | 5.75% | 5.12% | ― | |
48 Neutral | $103.35M | ― | -12.49% | 17.39% | -15.46% | -81.31% |
* Real Estate Sector Average
Performance Comparison
ONL
Orion Office REIT
1.84
-1.14
-38.26%
BXP
Boston Properties
62.60
4.61
7.95%
CUZ
Cousins Properties
27.16
5.62
26.09%
HIW
Highwoods Properties
27.91
4.94
21.51%
SLG
SL Green Realty
52.72
3.42
6.94%
VNO
Vornado Realty
33.92
7.01
26.05%
Orion Office REIT Earnings Call Summary
Earnings Call Date: Mar 5, 2025 | % Change Since: -51.71% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment with significant leasing performance improvements and strategic shifts towards dedicated use assets. However, these positive developments are tempered by substantial financial challenges, including decreased core FFO, revenue declines, and increased vacancy risks. The strategic reorientation and cost management efforts highlight a proactive approach to overcoming market challenges. However, ongoing financial pressures and market uncertainties suggest cautious optimism.Highlights
Significant Leasing Performance Improvement
Leasing performance improved significantly with 1.1 million square feet leased in 2024, more than four times the leasing achieved in 2023. Notably, 287,000 square feet of new leases were signed, 13 times more than in 2023.
Successful Backfill of Hasbro Property
Successfully backfilled the 136,000 square foot Hasbro property in Providence, Rhode Island, with a long-term lease to Lifespan Corporation, now Brown University Health, shortly after Hasbro's lease expiration.
Strategic Shift to Dedicated Use Assets
Shifted focus towards dedicated use assets (DUA) such as medical, lab, R&D, and flex properties, which are expected to provide stronger rents and higher lease renewal likelihood.
Rebranding to Orion Properties
Rebranded to Orion Properties to reflect the strategic shift towards dedicated use assets and away from traditional office properties.
Cost Management and G&A Alignment
Implemented cost-saving measures, including restructuring team composition and responsibilities, with expected annual savings of $1 million from the retirement of the Chief Investment Officer.
Lowlights
Decrease in Core FFO and Revenue
Core FFO decreased to $10.2 million in Q4 2024 from $18.5 million in Q4 2023. Total revenues also decreased from $43.8 million in Q4 2023 to $38.4 million in Q4 2024.
Negative Rent Spreads
Renewal rent spreads were down 6.6% in 2024 due to competitive pressures, although they were positive by 2% on a GAAP basis due to annual rent increases.
Significant Lease Expirations and Vacancy Risks
Faced significant lease expirations with $40 million in annualized base rents rolling in 2024, leading to increased vacancy risks and pressures on cash flow.
High Tenant Concessions and Rent Pressures
Tenant concessions remained high, and rents were pressured on renewals and new leases, indicating a challenging market environment.
Increase in Net Debt to Adjusted EBITDA Ratio
Net debt to adjusted EBITDA increased to 6.06 times, with expectations to rise further in 2025 due to continued leasing challenges and asset sales.
Company Guidance
During the earnings call, Orion Office REIT Inc. provided guidance for 2025, emphasizing a strategic shift towards dedicated use assets, which currently account for about 32% of their portfolio by annualized base rent. The company anticipates core FFO per share to range from $0.61 to $0.70. They aim to maintain G&A expenses between $19.5 million and $20.5 million, despite inflationary pressures, and project a net debt to adjusted EBITDA ratio of 8.0 to 8.8 times. Orion plans to divest traditional office properties and increase the proportion of dedicated use assets in its portfolio, while maintaining substantial liquidity of $247 million to support leasing and operational flexibility. Additionally, a restructuring charge will be incurred in 2025, but this will be adjusted in core FFO calculations. The company expects leasing momentum to improve, projecting revenue and earnings growth post-2026 as newly leased spaces become operational.Orion Office REIT Corporate Events
Business Operations and StrategyFinancial Disclosures
Orion Office REIT Rebrands to Orion Properties Inc.
Neutral
Mar 5, 2025
On March 5, 2025, Orion Office REIT Inc. announced a corporate name change to Orion Properties Inc. to better reflect its strategic shift towards dedicated use assets with an office component. The company reported its financial results for the fourth quarter and full year 2024, highlighting significant leasing activity and a strategic acquisition of a flex/laboratory/R&D facility. Despite a net loss for the year, Orion is focused on stabilizing its portfolio and achieving future earnings growth through asset sales, cost reductions, and a realigned dividend.
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.