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Paramount Group (PGRE)
NYSE:PGRE
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Paramount Group (PGRE) AI Stock Analysis

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PGRE

Paramount Group

(NYSE:PGRE)

Rating:70Neutral
Price Target:
$7.50
▲(3.02% Upside)
Paramount Group's overall stock score is driven by strong earnings call performance and positive technical indicators. However, financial performance concerns, particularly profitability and rising net debt, along with valuation challenges due to negative P/E, temper the score.
Positive Factors
Leasing Activity
The company raised their leasing guidance to 1.3mn SF for the year vs 1mn SF at the midpoint prior.
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
Leasing Risk
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.
Strategic Review Risk
The strategic review process carries high execution risk.

Paramount Group (PGRE) vs. SPDR S&P 500 ETF (SPY)

Paramount Group Business Overview & Revenue Model

Company DescriptionHeadquartered 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 MoneyParamount 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 Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong overall performance, with significant leasing activity and increased guidance highlighting the company's success. However, challenges remain in San Francisco with occupancy declines and upcoming lease expirations. Despite these challenges, the positive momentum in leasing and strategic capital allocation suggest a favorable outlook.
Q2-2025 Updates
Positive Updates
Strong Second Quarter Performance
Core FFO of $0.17 per share exceeded consensus by $0.03, driven by robust leasing activity and operational discipline.
Record Leasing Activity
Over 400,000 square feet of leases executed in the quarter, the highest quarterly total since 2019, with a balanced distribution between New York (52%) and San Francisco (48%).
Increased Guidance
Full year guidance raised across all key metrics: core FFO, leasing volume, cash NOI, and year-end leased occupancy.
New York Market Strength
New York portfolio leased at 88.1%, the highest level since early 2022, with significant new leases at 1301 Sixth Avenue and 900 Third Avenue.
San Francisco Leasing Momentum
Executed over 190,000 square feet of leasing in San Francisco, indicating signs of market stabilization and growing demand from sectors like AI and legal services.
Capital Allocation and Liquidity
Ended the quarter with over $534 million in cash, maintaining flexibility for strategic opportunities and balance sheet strength.
Negative Updates
San Francisco Occupancy Challenges
San Francisco portfolio leased occupancy decreased by 720 basis points to 75.1%, primarily due to Google's scheduled lease expiration at One Market Plaza.
Lease Expiration Impact
Significant lease expirations expected in San Francisco, with approximately 255,000 square feet or 19.7% expiring by year-end.
Mark-to-Market Decline
Second-generation space mark-to-market was down 5.4% on a cash basis, though up 2.6% on a GAAP basis.
Company Guidance
During Paramount Group's second quarter 2025 earnings conference call, the company reported strong financial performance, with core funds from operations (FFO) of $0.17 per share, surpassing consensus estimates by $0.03. The company executed over 405,000 square feet of leases in Q2, with a balanced distribution across New York (52%) and San Francisco (48%), marking the highest quarterly leasing activity since 2019. Paramount raised its full-year guidance for core FFO, leasing volume, cash NOI, and year-end leased occupancy due to robust leasing activity and operational discipline. The New York portfolio achieved an 88.1% leased occupancy rate, while San Francisco's leasing showed signs of stabilization despite market challenges. Paramount ended the quarter with $534 million in cash, maintaining a strong liquidity position, and plans to refinance its $860 million loan on 1301 Sixth Avenue. The company also completed a strategic equity sale and a noncore asset disposition to enhance balance sheet strength and focus on high-quality assets.

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
65
Positive
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
68
Positive
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
70
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue745.23M757.45M742.79M740.38M726.79M714.24M
Gross Profit434.86M454.17M198.18M462.95M461.35M446.65M
EBITDA319.15M359.91M27.54M354.15M381.12M356.85M
Net Income-78.14M-46.29M-259.74M-28.20M2.06M-14.12M
Balance Sheet
Total Assets7.96B7.87B8.01B8.45B8.49B8.55B
Cash, Cash Equivalents and Short-Term Investments659.57M375.06M428.21M408.90M524.90M434.53M
Total Debt3.70B3.68B3.80B3.84B3.84B3.80B
Total Liabilities3.86B3.86B3.99B4.04B4.04B4.04B
Stockholders Equity3.03B3.14B3.20B3.59B3.59B3.65B
Cash Flow
Free Cash Flow136.94M264.93M277.86M120.83M132.31M237.01M
Operating Cash Flow136.94M264.93M277.86M246.64M244.31M237.27M
Investing Cash Flow-78.03M-109.11M-113.09M-152.58M-103.48M40.03M
Financing Cash Flow82.99M-109.97M-57.98M-173.90M-76.48M-143.47M

Paramount Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price7.28
Price Trends
50DMA
6.48
Positive
100DMA
5.85
Positive
200DMA
5.23
Positive
Market Momentum
MACD
0.19
Negative
RSI
71.56
Negative
STOCH
95.50
Negative
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 7.28 is above the 20-day moving average (MA) of 6.76, above the 50-day MA of 6.48, and above the 200-day MA of 5.23, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 71.56 is Negative, neither overbought nor oversold. The STOCH value of 95.50 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PGRE.

Paramount Group Risk Analysis

Paramount Group disclosed 55 risk factors in its most recent earnings report. Paramount Group 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

Paramount Group 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%
68
Neutral
$3.41B26.705.39%6.40%-2.16%-16.41%
66
Neutral
$1.04B58.171.28%9.72%8.18%-15.35%
63
Neutral
$7.06B13.77-0.50%7.05%4.08%-25.24%
63
Neutral
$3.29B74.911.74%4.69%-0.57%
58
Neutral
$4.32B663.10-0.37%5.43%15.25%79.18%
57
Neutral
$1.05B-4.27%5.92%-6.74%17.44%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PGRE
Paramount Group
7.37
2.40
48.29%
DEI
Douglas Emmett
16.15
1.01
6.67%
HIW
Highwoods Properties
31.27
1.51
5.07%
SLG
SL Green Realty
58.62
-3.07
-4.98%
PDM
Piedmont Office
8.57
-0.66
-7.15%
DEA
Easterly Government Properties
22.81
-7.72
-25.29%

Paramount Group Corporate Events

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Paramount Group Announces Strategic Review and Leadership Changes
Neutral
May 19, 2025

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.

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 19, 2025