Paramount Group (PGRE) AI Stock Analysis

• Market Cap: $1.52B
• Dividend Yield: 0.56%
• Average Volume (3M): 5.48M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.82
• Revenue Growth: -1.68%
• EPS Growth: 63.27%
• Country: US
• Employees: 316
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Office
• EPS (TTM): -0.09
• Shares Outstanding: 220,948,430
• 10 Day Avg. Volume: 10,253,065
• 30 Day Avg. Volume: 5,478,944
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 3.59
• Enterprise Value/Revenue: 7.31
• Enterprise Value/Gross Profit: 12.53
• Enterprise Value/Ebitda: 17.08
• 1Y Price Target: $6.34
• Price Target Upside: -2.76% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 64 Neutral
• Price Target: $7.00 ▲(7.36% Upside)

Paramount Group's overall stock score is driven by strong earnings call performance and solid financial stability, despite profitability challenges. The technical analysis suggests potential oversold conditions, while valuation remains a concern due to negative earnings. The company's strategic actions and leasing momentum provide a positive outlook, but financial improvements are necessary for a higher score.

Positive Factors

Strong Leasing Activity

The record leasing activity indicates strong demand for Paramount's properties, enhancing long-term revenue stability and market position.

Increased Guidance

Raising guidance reflects management's confidence in operational execution, suggesting sustainable growth and improved financial performance.

Strategic Acquisition

The acquisition by Rithm Capital could provide strategic synergies and enhance Paramount's asset management capabilities, benefiting long-term growth.

Negative Factors

San Francisco Occupancy Challenges

Declining occupancy in San Francisco poses a risk to revenue stability and highlights market-specific challenges that could affect future profitability.

Rising Net Debt

Rising net debt levels could strain financial flexibility, limiting the company's ability to invest in growth opportunities and manage economic downturns.

Lease Expiration Impact

Upcoming lease expirations in San Francisco could lead to revenue volatility and require aggressive leasing efforts to maintain occupancy levels.

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 generates revenue primarily through leasing office space to a diverse tenant base, which includes both government and private sector entities. The company's revenue model is predominantly based on long-term leases, where it earns rental income from tenants. Additionally, PGRE may benefit from ancillary income sources, including property management fees and service charges. The firm also engages in property development and redevelopment, which can lead to increased asset value and rental income potential. Strategic partnerships with other real estate developers and investment firms can further enhance its earnings through joint ventures and co-investments in lucrative real estate projects.

Paramount Group Financial Statement Overview

Summary

Paramount Group shows a mixed financial performance with stable revenue and cash flows but struggles with profitability. The balance sheet remains solid, but rising net debt and consistent net losses are key concerns. The company needs strategic actions to enhance profitability and manage debt effectively.

Income Statement

The company exhibits stable revenue with a slight decline in TTM figures compared to the previous annual report. Gross and EBIT margins are reasonable, but the consistent net losses present a profitability challenge. Revenue growth is modest, indicating a need for strategic improvements.

Balance Sheet

The balance sheet shows a healthy equity base and a manageable debt-to-equity ratio of approximately 1.19, signaling stability. The equity ratio remains strong, but the increasing net debt warrants caution. ROE is negative due to net losses, highlighting a need to improve profitability.

Cash Flow

Cash flows are robust, with positive operating and free cash flows. The operating cash flow to net income ratio is strong, indicating efficient cash generation despite net losses. However, growth in free cash flow is declining, suggesting potential future cash flow constraints.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	745.23M	757.45M	742.79M	740.38M	726.79M	714.24M
Gross Profit	434.86M	454.17M	198.18M	462.95M	461.35M	446.65M
EBITDA	319.15M	359.91M	27.54M	354.15M	381.12M	356.85M
Net Income	-78.14M	-46.29M	-259.74M	-28.20M	2.06M	-14.12M
Balance Sheet
Total Assets	7.96B	7.87B	8.01B	8.45B	8.49B	8.55B
Cash, Cash Equivalents and Short-Term Investments	659.57M	375.06M	428.21M	408.90M	524.90M	434.53M
Total Debt	3.70B	3.68B	3.80B	3.84B	3.84B	3.80B
Total Liabilities	3.86B	3.86B	3.99B	4.04B	4.04B	4.04B
Stockholders Equity	3.03B	3.14B	3.20B	3.59B	3.59B	3.65B
Cash Flow
Free Cash Flow	136.94M	264.93M	277.86M	120.83M	132.31M	237.01M
Operating Cash Flow	136.94M	264.93M	277.86M	246.64M	244.31M	237.27M
Investing Cash Flow	-78.03M	-109.11M	-113.09M	-152.58M	-103.48M	40.03M
Financing Cash Flow	82.99M	-109.97M	-57.98M	-173.90M	-76.48M	-143.47M

Paramount Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 6.52
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PGRE, the sentiment is Neutral. The current price of 6.52 is below the 20-day moving average (MA) of 7.02, below the 50-day MA of 6.71, and above the 200-day MA of 5.41, indicating a neutral trend. The MACD of -0.08 indicates Positive momentum. The RSI at 39.49 is Neutral, neither overbought nor oversold. The STOCH value of 1.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PGRE.

Paramount Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DEA	66 Neutral	1.03B	57.76	1.29%	9.76%	8.18%	-15.35%
PGRE	64 Neutral	$1.52B	―	-2.52%	0.56%	-1.68%	63.27%
PDM	57 Neutral	1.11B	-15.86	-4.42%	5.72%	-6.74%	17.44%
JBGS	53 Neutral	1.73B	-11.73	-11.48%	3.16%	-11.33%	-22.04%
BDN	50 Neutral	782.22M	-2.35	-37.10%	13.57%	-3.05%	-94.96%
HPP	50 Neutral	1.03B	-0.93	-12.34%	―	-9.68%	-69.03%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%

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.