Piedmont Office (PDM) AI Stock Analysis

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Piedmont Office

(NYSE:PDM)

48Neutral

Piedmont Office faces financial and operational challenges, reflected in its negative profitability metrics and bearish technical indicators. While recent leasing successes and board expansion may offer long-term potential, the dividend suspension and macroeconomic uncertainties weigh on the stock's attractiveness. The valuation is mixed, with an attractive dividend yield offset by a negative P/E ratio.

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

Market Cap

$735.25M

Dividend Yield8.46%

Average Volume (3M)1.14M

Price to Earnings (P/E)―

Beta (1Y)1.07

Revenue Growth-6.23%

EPS Growth18.07%

CountryUS

Employees150

SectorReal Estate

Sector Strength83

IndustryREIT - Office

Share Statistics

EPS (TTM)-0.49

Shares Outstanding124,408,010

10 Day Avg. Volume1,611,637

30 Day Avg. Volume1,144,211

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap4.25

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit9.30

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$9.00

Price Target Upside52.28% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

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 makes money primarily through leasing office space to various tenants, which generates consistent rental income. The company also earns revenue from property management services, including maintenance and tenant services, which are often billed separately or included in lease agreements. Additionally, PDM may engage in strategic property sales to capitalize on asset appreciation and reinvest in higher-yield opportunities. Significant partnerships with corporate clients and real estate brokers can enhance occupancy rates and drive revenue growth. The company's earnings are influenced by market demand for office space, occupancy rates, lease terms, and property values.

Piedmont Office Financial Statement Overview

Summary

Piedmont Office's financial performance is challenged by negative net income and declining margins, indicating operational difficulties. While the balance sheet shows moderate stability, negative returns on equity and subdued cash flow generation highlight potential risks.

Income Statement

Neutral

Piedmont Office's income statement reveals challenges in achieving profitability, with a negative net income in the TTM period and declining EBIT and EBITDA margins. The gross profit margin has turned negative, indicating pressure on cost management or revenue generation. Revenue growth is inconsistent, with a significant drop recently, reflecting operational difficulties.

Balance Sheet

Neutral

The balance sheet shows moderate stability with a reasonable debt-to-equity ratio and a positive equity ratio, implying the company is not overly leveraged. However, the return on equity is negative due to persistent net losses, raising concerns about shareholder value creation.

Cash Flow

Neutral

Cash flow analysis indicates pressure on free cash flow, with a notable decline in the TTM period. The operating cash flow remains positive, but the free cash flow to net income ratio is unfavorable due to negative net income. This suggests challenges in converting earnings into cash.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
570.32M	577.76M	563.77M	528.71M	535.02M
	Gross Profit
336.20M	340.72M	337.71M	317.78M	320.09M
	EBIT
74.24M	77.26M	86.74M	91.13M	91.34M
	EBITDA
270.46M	231.06M	234.41M	218.14M	491.54M
	Net Income Common Stockholders
-79.07M	-48.39M	272.58M	-62.65M	175.11M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
109.64M	825.00K	16.54M	7.42M	7.33M
	Total Assets
3.46B	4.06B	4.09B	3.93B	3.74B
	Total Debt
192.42M	2.05B	1.98B	1.88B	1.62B
	Net Debt
82.79M	2.05B	1.97B	1.87B	1.61B
	Total Liabilities
2.53B	2.33B	2.24B	2.14B	1.84B
	Stockholders Equity
1.59B	1.72B	1.85B	1.79B	1.90B
Cash Flow		Free Cash Flow
198.11M	51.94M	93.86M	119.58M	80.70M
	Operating Cash Flow
198.11M	210.13M	215.22M	242.20M	193.28M
	Investing Cash Flow
-186.62M	-196.02M	-1.25M	-368.93M	-197.88M
	Financing Cash Flow
98.18M	-29.50M	-203.23M	126.38M	-1.58M

Piedmont Office Technical Analysis

Technical Analysis Sentiment

Negative

Last Price5.91

Price Trends

50DMA

6.95

Negative

100DMA

7.75

Negative

200DMA

8.49

Negative

Market Momentum

MACD

-0.22

Positive

RSI

42.79

Neutral

STOCH

32.51

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PDM, the sentiment is Negative. The current price of 5.91 is below the 20-day moving average (MA) of 6.46, below the 50-day MA of 6.95, and below the 200-day MA of 8.49, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 42.79 is Neutral, neither overbought nor oversold. The STOCH value of 32.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PGRE	68 Neutral	$1.02B	―	-1.46%	3.26%	1.97%	82.20%
DEA	63 Neutral	$926.39M	49.17	1.33%	13.14%	6.06%	-14.12%
Sector *	60 Neutral	$2.74B	11.40	0.08%	8531.66%	5.98%	-15.71%
ELME	52 Neutral	$1.37B	―	-1.17%	4.62%	6.15%	74.89%
BDN	50 Neutral	$687.28M	―	-18.11%	15.15%	-2.22%	1.51%
JBGS	50 Neutral	$1.19B	―	-7.24%	5.01%	-14.84%	-36.05%
PDM	48 Neutral	$735.25M	―	-3.79%	8.46%	-6.23%	18.07%

* Real Estate Sector Average

Performance Comparison

PDM

Piedmont Office

6.28

-0.14

-2.18%

ELME

Elme Communities

15.91

1.26

8.60%

BDN

Brandywine Realty

4.06

-0.10

-2.40%

PGRE

Paramount Group

4.60

-0.16

-3.36%

DEA

Easterly Government Properties

20.63

-6.76

-24.68%

JBGS

JBG Smith Properties

14.51

0.20

1.40%

Piedmont Office Earnings Call Summary

Earnings Call Date:Apr 28, 2025

(Q1-2025)

% Change Since: -13.09%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong leasing activity, positive rental rate increases, and no near-term debt maturities, showcasing operational strength. However, this was tempered by the suspension of the dividend, macroeconomic uncertainties, and a decline in Core FFO, which raises concerns about short-term challenges.

Q1-2025 Updates

Positive Updates

Strong Leasing Activity

Completed approximately 363,000 square feet of total leasing during the quarter, with roughly half related to new tenant leases. Leasing momentum remains strong, including over 275,000 square feet of leases signed during April.

Positive Rental Rate Increases

Leases executed during the quarter reflected double-digit rental rate roll-ups on both a cash and GAAP basis, with lease economics showing approximately 10% and 19% roll-ups.

No Near-term Debt Maturities

Successfully refinanced debt with no final maturities until 2028 and approximately $500 million availability under the revolving line of credit.

Recognition for Design Excellence

Galleria 600 lobby rejuvenation awarded the Best of Special Projects award from the International Interior Design Association’s Georgia Chapter.

Robust Leasing Pipeline

The company has 1.9 million square feet of executed leases yet to commence or under abatement, suggesting strong future earnings growth.

Negative Updates

Dividend Suspension

Management and the Board made the decision to suspend the dividend to fund accretive long-term growth and reduce leverage, which could be seen negatively by income-focused investors.

Macroeconomic Uncertainty

Macroeconomic uncertainty emerged during Q1, causing national gross leasing volume to slow moderately and net absorption to turn negative again.

Historical Gap in Lease and Economic Lease Percentage

The gap between the lease percentage and economic lease percentage is at its widest in over a decade at 10.6%, indicating a delay in revenue realization.

Core FFO Decline

Core FFO per diluted share for the first quarter of 2025 was $0.36, down from $0.39 per diluted share for the first quarter of 2024, attributed to increased net interest expense and lower reported rental income.

Company Guidance

During the Piedmont Office Realty Trust's first quarter 2025 earnings call, several key metrics and guidance points were highlighted. The company completed approximately 363,000 square feet of total leasing in the quarter, with half being new tenant leases, and achieved double-digit rental rate roll-ups on both a cash and GAAP basis. Despite macroeconomic uncertainties, leasing momentum remains strong, with 275,000 square feet signed in April and a year-end lease percentage guidance of 89% to 90%. Piedmont's 2025 core FFO guidance was affirmed at $1.38 to $1.44 per diluted share. The decision to suspend dividends aims to fund long-term growth, retaining approximately $60 million annually, and reduce leverage, projecting $0.01 accretion in 2025. The leasing success has led to a backlog increase from $46 million to $67 million in annualized revenue. The gap between lease percentage and economic lease percentage is at 10.6%, the widest in over a decade, with plans to close this as leases commence.

Piedmont Office Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Piedmont Office Expands Board with New Directors

Positive

Feb 27, 2025

On February 26, 2025, Piedmont Office Realty Trust appointed Jeffrey J. Donnelly, Deneen L. Donnley, and Stephen E. Lewis as directors, expanding its board to ten members. These appointments bring diverse expertise from the energy, legal, and hospitality sectors, potentially strengthening Piedmont’s strategic positioning and governance. The announcement, made on February 27, 2025, reflects Piedmont’s commitment to enhancing its leadership team with seasoned professionals, which could have positive implications for its operations and stakeholder relations.

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.