Paramount Group (PGRE) AI Stock Analysis

• Market Cap: $1.55B
• Dividend Yield: 0.54%
• Average Volume (3M): 3.02M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.88
• Revenue Growth: 1.67%
• EPS Growth: 73.75%
• Country: US
• Employees: 316
• Sector: Real Estate
• Sector Strength: 59
• Industry: REIT - Office
• EPS (TTM): -0.05
• Shares Outstanding: 219,225,080
• 10 Day Avg. Volume: 3,376,669
• 30 Day Avg. Volume: 3,024,854
• PEG Ratio: 0.47
• Price to Book (P/B): 0.48
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.34
• Enterprise Value/Market Cap: 0.69
• Enterprise Value/Revenue: 0.35
• Enterprise Value/Gross Profit: 2.76
• Enterprise Value/Ebitda: 0.68
• 1Y Price Target: $6.00
• Price Target Upside: -7.83% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 70 Outperform
• Price Target: $7.00 ▲(7.53%Upside)

Paramount Group's overall stock score is driven by strong leasing activities and strategic moves, especially highlighted in the earnings call. While technical indicators reflect bullish momentum, the valuation suggests caution due to negative earnings. The company's financial performance shows operational strengths but also emphasizes the need for profitability improvements.

Positive Factors

Financial Performance

Q1 FFO beat and FFO guidance was reiterated, while the leasing outlook was improved.

Leasing Performance

Leasing volume increased significantly from the previous quarter and long-term average.

Strategic Alternatives

The company's willingness to unlock value through strategic alternatives, which could include a potential sale of assets or the company, may be viewed as positive.

Negative Factors

Execution Risk

The strategic review process carries high execution risk.

Leased Rate Concerns

JPMorgan Chase is only renewing ~10% of the 219k SF that expires, which suggests the building's leased rate may drop from 72.3% to ~42% all else equal.

Management Uncertainty

The transition in management roles may have catalyzed the willingness to explore the strategic review, but it also introduces uncertainty.

Paramount Group Business Overview & Revenue Model

Company Description

Headquartered in New York City, Paramount Group, Inc. is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York City and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.

How the Company Makes Money

Paramount Group makes money primarily through leasing office space in its high-end properties to a diverse range of tenants, including corporations, law firms, financial institutions, and government entities. The company generates revenue through rental income from long-term leases and seeks to maximize this income by maintaining high occupancy rates and regularly adjusting rent to market levels. Additionally, Paramount Group may engage in strategic property sales, leveraging its expertise in real estate to realize capital gains. Its revenue model is also supported by property management fees and services offered to tenants, enhancing the value and appeal of its properties. Paramount Group's earnings are further bolstered by its ability to refinance properties at favorable interest rates and its strategic partnerships with institutional investors, which provide additional capital for growth and development.

Paramount Group Financial Statement Overview

Summary

Paramount Group exhibits strengths in revenue growth and operational cash flow, despite challenges in achieving consistent profitability. The balance sheet is solid with a healthy equity base, but profitability metrics like return on equity are impacted by negative earnings.

Income Statement

Paramount Group's revenue has shown a moderate growth trajectory with a 1.97% increase from 2022 to 2023. However, the company is facing challenges in achieving profitability, as evidenced by negative net income figures. The gross profit margin is robust at 59.95% (2023), indicating efficient cost management, but the net profit margin remains negative due to significant non-operating expenses or other factors. EBIT and EBITDA margins are reasonable, reflecting steady operational performance.

Balance Sheet

The balance sheet shows a solid equity base, with stockholders' equity at $4,009.5 million as of 2023, resulting in a healthy equity ratio of 50.91%. The debt-to-equity ratio stands at 0.92, suggesting a balanced use of debt and equity. While the company maintains a stable asset base, the negative net income impacts return on equity, which is currently non-positive. The overall leverage appears manageable, but continuous monitoring is advised.

Cash Flow

Operating cash flow remains strong at $264.93 million in 2023, demonstrating effective cash generation from core operations. Free cash flow has shown resilience with a positive year-over-year growth rate of 119.19% from 2022 to 2023. The operating cash flow to net income ratio is high due to negative net income, indicating a divergence between cash generation and accounting profitability. This is a common scenario in capital-intensive industries like REITs.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	757.45M	742.79M	740.38M	726.79M	714.24M
Gross Profit	454.17M	198.18M	462.95M	461.35M	446.65M
EBITDA	387.84M	27.54M	354.15M	381.12M	356.85M
Net Income	-46.29M	-259.74M	-28.20M	2.06M	-14.12M
Balance Sheet
Total Assets	7.87B	8.01B	8.45B	8.49B	8.55B
Cash, Cash Equivalents and Short-Term Investments	375.06M	428.21M	408.90M	524.90M	434.53M
Total Debt	3.68B	3.80B	3.84B	3.84B	3.80B
Total Liabilities	3.86B	3.99B	4.04B	4.04B	4.04B
Stockholders Equity	3.14B	3.20B	3.59B	3.59B	3.65B
Cash Flow
Free Cash Flow	264.93M	277.86M	120.83M	132.31M	237.01M
Operating Cash Flow	264.93M	277.86M	246.64M	244.31M	237.27M
Investing Cash Flow	-109.11M	-113.09M	-152.58M	-103.48M	40.03M
Financing Cash Flow	-109.97M	-57.98M	-173.90M	-76.48M	-143.47M

Paramount Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.51
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PGRE, the sentiment is Positive. The current price of 6.51 is above the 20-day moving average (MA) of 6.33, above the 50-day MA of 6.09, and above the 200-day MA of 5.02, indicating a bullish trend. The MACD of 0.12 indicates Positive momentum. The RSI at 57.57 is Neutral, neither overbought nor oversold. The STOCH value of 27.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PGRE.

Paramount Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PGRE	70 Outperform	$1.55B	―	-2.11%	0.54%	1.67%	73.75%
DEA	67 Neutral	$1.04B	55.83	1.32%	5.87%	6.06%	-15.10%
HIW	66 Neutral	$3.33B	19.32	7.21%	6.49%	-2.01%	31.64%
DEI	65 Neutral	$3.22B	50.21	2.49%	4.79%	-1.98%	―
Sector *	64 Neutral	$6.89B	17.45	-1.92%	7.02%	4.59%	-24.66%
SLG	58 Neutral	$4.58B	663.10	-0.35%	5.07%	14.21%	79.46%
PDM	56 Neutral	$944.26M	―	-3.79%	6.59%	-6.23%	18.07%

Paramount Group Corporate Events

Paramount Group Announces Strategic Review and Leadership Changes

On May 15, 2025, Paramount Group held its annual meeting of stockholders, where key decisions were made, including the election of board members and approval of executive compensation. The company also announced a strategic review to maximize shareholder value, engaging BofA Securities and Latham & Watkins LLP as advisors. Additionally, Paramount appointed Ermelinda Berberi as Executive Vice President, Chief Financial Officer, and Treasurer, and Timothy Dembo as Senior Vice President, General Counsel, and Secretary, marking a significant management transition.

The most recent analyst rating on (PGRE) stock is a Sell with a $3.50 price target. To see the full list of analyst forecasts on Paramount Group stock, see the PGRE Stock Forecast page.

Paramount Group Sells Stake in San Francisco Property

On May 7, 2025, Paramount Group, Inc. announced the sale of a 25% interest in One Front Street, a Class A office building in San Francisco, valued at $255 million. The company will retain a 75% stake and continue managing the property. This transaction, which included $40.5 million in seller financing, resulted in net proceeds of $11.5 million for Paramount. The sale aligns with the company’s confidence in San Francisco’s market potential, bolstered by urban renewal initiatives, and aims to reposition the asset for future lease-up phases.