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Piedmont Office (PDM)
NYSE:PDM
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Piedmont Office (PDM) AI Stock Analysis

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PDM

Piedmont Office

(NYSE:PDM)

Rating:57Neutral
Price Target:
$8.00
▼(-5.55% Downside)
Piedmont Office's overall stock score reflects significant financial challenges, with declining revenues and profitability issues being the most impactful factors. However, positive technical indicators and optimistic earnings call guidance provide some balance. The high dividend yield is a positive aspect, but the negative P/E ratio indicates valuation concerns.

Piedmont Office (PDM) vs. SPDR S&P 500 ETF (SPY)

Piedmont Office Business Overview & Revenue Model

Company DescriptionPiedmont Office Realty Trust, Inc. (NYSE: PDM) is an owner, manager, developer, redeveloper, and operator of high-quality, Class A office properties located primarily in select sub-markets within seven major Eastern U.S. office markets, with the majority of its revenue being generated from the Sunbelt. Its geographically-diversified, approximately $5 billion portfolio is currently comprised of approximately 17 million square feet. The Company is a fully-integrated, self-managed real estate investment trust (REIT) with local management offices in each of its markets and is investment-grade rated by S&P Global Ratings (BBB) and Moody's (Baa2). At the end of the third quarter, approximately 63% of the company's portfolio was ENERGY STAR certified and approximately 41% was LEED certified.
How the Company Makes MoneyPiedmont Office generates revenue primarily through leasing and renting office spaces to businesses of varying sizes. Their revenue model includes long-term leases for traditional office spaces as well as short-term and flexible lease agreements for coworking spaces. Additionally, the company earns income from ancillary services such as meeting room rentals, office management services, and virtual office solutions. Significant partnerships with technology providers enhance their service offerings and attract a broader customer base, contributing to overall revenue growth. Seasonal promotions and strategic marketing initiatives also play a key role in driving occupancy rates and maximizing earnings.

Piedmont Office Earnings Call Summary

Earnings Call Date:Jul 28, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance in leasing and rental rate growth, alongside strategic debt management. However, slight declines in FFO and challenges in certain markets tempered the overall positive sentiment. The company's proactive leasing and market positioning signal optimism for future growth.
Q2-2025 Updates
Positive Updates
Strong Leasing Success
Piedmont Realty achieved leasing success totaling 712,000 square feet in Q2, bringing total year-to-date leasing to over 1 million square feet. Approximately 2/3 of Q2 activity related to new tenant leases, marking a significant achievement since 2018.
Increased Leasing Guidance
The company increased its annual leasing guidance to a range of 2.2 million to 2.4 million square feet, reflecting an increase of more than 800,000 square feet compared to the original 2025 guidance.
Rental Rate Growth
Rental rates for space vacant less than a year reflected over 7% and almost 14% roll-ups on a cash and accrual basis, respectively. Asking rents for developments have grown by 27% year-over-year.
Successful Debt Management
Piedmont repurchased approximately $68 million of its 9.25% bonds, resulting in total interest savings of $7.5 million over the next 3 years.
Positive Market Trends
JLL Research reported that active space requirements grew 5.8%, reflecting the highest level of demand since 2021, with Piedmont observing positive absorption in four of its operating markets.
Negative Updates
Minimal FFO Growth
Core FFO per diluted share for Q2 2025 was $0.36, a slight decrease compared to $0.37 in Q2 2024, primarily due to higher net interest expenses.
Asset Sale Impact
The sale of three nonstrategic projects and downtime associated with lease expirations contributed to a slight offset in operational growth.
Challenges in Boston and DC Markets
Boston and DC were noted as lagging markets compared to other strong-performing segments in Piedmont's portfolio.
Debt Extinguishment Loss
A $7.5 million loss on early extinguishment of debt was recognized as a result of bond repurchases.
Company Guidance
During the Piedmont Realty Trust's Second Quarter 2025 Earnings Call, the company provided optimistic guidance reflecting strong leasing activity and future growth prospects. The company reported leasing success totaling 712,000 square feet in Q2, bringing the year-to-date total to over 1 million square feet, with new tenant leases accounting for approximately two-thirds of the quarter's activity. The in-service lease percentage increased by 140 basis points year-over-year to 88.7%, with a year-end target of 89% to 90%. Out-of-service projects in Minneapolis and Orlando are performing well, with leasing percentages approaching 60% based on July activity. The company anticipates a significant portion of the $71 million backlog in annual lease revenue to commence by the end of 2026. Piedmont increased its annual leasing guidance to a range of 2.2 million to 2.4 million square feet, up by more than 800,000 square feet from initial projections. The positive leasing momentum is expected to primarily impact earnings in 2026 and beyond, with core FFO guidance for 2025 remaining in the range of $1.38 to $1.44 per diluted share.

Piedmont Office Financial Statement Overview

Summary
Piedmont Office faces significant financial challenges. The income statement shows declining revenues and profitability issues, with a negative revenue growth rate of -52.2% and a net profit margin of -12.1%. The balance sheet indicates low leverage with a debt-to-equity ratio of 0.12, but negative returns on equity. Cash flow metrics reveal a decline in free cash flow growth, posing risks to financial stability.
Income Statement
45
Neutral
Piedmont Office's income statement shows declining revenue with a negative revenue growth rate of -52.2% in the TTM period. The company has struggled with profitability, evidenced by a negative net profit margin of -12.1% and a declining gross profit margin. The EBIT and EBITDA margins have also decreased, indicating operational challenges.
Balance Sheet
60
Neutral
The balance sheet reflects a relatively low debt-to-equity ratio of 0.12 in the TTM period, indicating low leverage compared to previous years. However, the return on equity is negative, suggesting inefficiencies in generating returns from equity. The equity ratio remains stable, showing a solid equity base.
Cash Flow
40
Negative
Cash flow analysis reveals a significant decline in free cash flow growth, with a rate of -125.7% in the TTM period. The operating cash flow to net income ratio is positive, but the free cash flow to net income ratio is low, indicating challenges in converting income into free cash flow.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue565.50M570.32M577.76M563.77M528.71M535.02M
Gross Profit280.43M336.20M342.67M337.71M317.78M320.09M
EBITDA288.74M252.13M231.06M234.41M218.14M292.63M
Net Income-68.41M-79.07M-48.39M146.83M-1.15M232.69M
Balance Sheet
Total Assets3.98B4.11B4.06B4.09B3.93B3.74B
Cash, Cash Equivalents and Short-Term Investments3.31M113.88M4.21M16.54M7.42M7.33M
Total Debt190.64M2.26B2.05B1.98B1.88B1.62B
Total Liabilities2.43B2.53B2.33B2.24B2.14B1.84B
Stockholders Equity1.55B1.59B1.72B1.85B1.79B1.90B
Cash Flow
Free Cash Flow7.00M-14.00M51.94M93.86M119.58M80.70M
Operating Cash Flow161.74M198.11M210.13M215.22M242.20M193.28M
Investing Cash Flow-190.13M-186.62M-196.02M-1.25M-368.93M-197.88M
Financing Cash Flow-107.62M98.18M-29.50M-203.23M126.38M-1.58M

Piedmont Office Technical Analysis

Technical Analysis Sentiment
Positive
Last Price8.47
Price Trends
50DMA
7.62
Positive
100DMA
7.23
Positive
200DMA
7.74
Positive
Market Momentum
MACD
0.21
Negative
RSI
71.52
Negative
STOCH
95.28
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PDM, the sentiment is Positive. The current price of 8.47 is above the 20-day moving average (MA) of 7.89, above the 50-day MA of 7.62, and above the 200-day MA of 7.74, indicating a bullish trend. The MACD of 0.21 indicates Negative momentum. The RSI at 71.52 is Negative, neither overbought nor oversold. The STOCH value of 95.28 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PDM.

Piedmont Office Risk Analysis

Piedmont Office disclosed 57 risk factors in its most recent earnings report. Piedmont Office 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

Piedmont Office Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Neutral
$1.72B-2.52%0.56%-1.68%63.27%
66
Neutral
$1.04B58.091.28%9.72%8.18%-15.35%
63
Neutral
$7.06B13.38-0.50%6.96%4.08%-25.24%
57
Neutral
$1.04B-4.27%5.90%-6.74%17.44%
57
Neutral
$742.15M-29.94%14.08%-3.05%-94.96%
56
Neutral
$1.50B-1.31%4.22%4.59%73.22%
53
Neutral
$1.63B-9.19%3.26%-11.33%-22.04%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PDM
Piedmont Office
8.47
-0.79
-8.53%
ELME
Elme Communities
17.08
0.14
0.83%
BDN
Brandywine Realty
4.26
-0.26
-5.75%
PGRE
Paramount Group
7.20
2.22
44.58%
DEA
Easterly Government Properties
22.89
-7.48
-24.63%
JBGS
JBG Smith Properties
21.44
4.85
29.23%

Piedmont Office Corporate Events

Private Placements and FinancingRegulatory Filings and Compliance
Piedmont Office Files New Shelf Registration Statement
Neutral
Jul 30, 2025

Piedmont Realty Trust, Inc., on July 30, 2025, filed a new shelf registration statement with the SEC to replace its previous one, allowing the issuance of debt and equity securities. The company also amended its Equity Distribution Agreement with several financial institutions to maintain its ability to issue equity through an at-the-market program, enabling potential sales of up to $250 million in common stock. This move provides Piedmont with flexibility in funding options, depending on market conditions and other factors, without obligating the company to sell any shares immediately.

Business Operations and Strategy
Piedmont Office Rebrands to Piedmont Realty Trust
Neutral
Jun 9, 2025

On June 6, 2025, Piedmont Office Realty Trust, Inc. officially changed its name to Piedmont Realty Trust, Inc. as part of a rebranding initiative to better align with its strategic focus on creating premium workspaces known as Piedmont PLACEs. This rebranding reflects the company’s commitment to transforming traditional office environments into spaces that promote collaboration and community, with no changes to its stock trading symbol or CUSIP. The name change aims to enhance the company’s market positioning by emphasizing its dedication to providing elevated service and cohesive client experiences.

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.Date of analysis: Aug 22, 2025