Paramount Group (PGRE) AI Stock Analysis

• Market Cap: $1.36B
• Dividend Yield: 2.43%
• Average Volume (3M): 3.13M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.07
• Revenue Growth: 1.67%
• EPS Growth: 73.75%
• Country: US
• Employees: 316
• Sector: Real Estate
• Sector Strength: 62
• Industry: REIT - Office
• EPS (TTM): -0.05
• Shares Outstanding: 219,225,080
• 10 Day Avg. Volume: 3,659,085
• 30 Day Avg. Volume: 3,125,192
• PEG Ratio: 0.32
• Price to Book (P/B): 0.33
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.97
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $5.19
• Price Target Upside: -9.42% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 72 Outperform
• Price Target: $6.00 ▲( 4.71% Upside)

Paramount Group exhibits strong leasing performance and cash flow, especially in New York, but struggles with profitability and valuation due to negative earnings. The robust technical momentum and strategic asset sales provide a positive outlook, balanced by challenges in the San Francisco market and cautious valuation metrics.

Positive Factors

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

Management Uncertainty

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

Strategic Review Risks

The strategic review process carries high execution risk.

Paramount Group Business Overview & Revenue Model

Company Description

Paramount Group, Inc. (PGRE) is a real estate investment trust (REIT) focused on owning, operating, and managing high-quality office properties. Primarily located in premier central business district locations in New York City, Washington, D.C., and San Francisco, the company is committed to developing and maintaining a portfolio of iconic and sustainable office buildings that cater to a diverse range of tenants.

How the Company Makes Money

Paramount Group generates revenue primarily through leasing office space in its strategically located properties to a variety of tenants, including corporations, government entities, and other businesses. The company's revenue model is based on long-term lease agreements that provide a steady stream of rental income. In addition to base rent, Paramount may also earn income through tenant reimbursements for operating expenses and real estate taxes. The company actively manages and upgrades its properties to increase occupancy rates and rental rates, thereby maximizing its revenue potential. Furthermore, Paramount Group may engage in strategic property acquisitions and dispositions to enhance its portfolio and drive growth. Key factors contributing to its earnings include market demand for premium office space, effective property management, and maintaining high occupancy levels.

Paramount Group Financial Statement Overview

Summary

Paramount Group shows moderate revenue growth and strong cash flow, but struggles with profitability due to negative net income. The balance sheet is robust with a solid equity base, though profitability metrics are affected 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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
755.59M	757.45M	742.79M	740.38M	726.79M	714.24M
	Gross Profit
384.18M	454.17M	198.18M	462.95M	461.35M	446.65M
	EBIT
141.54M	148.30M	136.19M	121.64M	148.63M	120.96M
	EBITDA
380.83M	387.84M	27.54M	354.15M	381.12M	356.85M
	Net Income Common Stockholders
-66.19M	-46.29M	-259.74M	-28.20M	2.06M	-14.12M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
426.95M	375.06M	428.21M	408.90M	524.90M	434.53M
	Total Assets
7.95B	7.87B	8.01B	8.45B	8.49B	8.55B
	Total Debt
0.00	3.68B	3.80B	3.84B	3.84B	3.80B
	Net Debt
3.25B	3.30B	3.38B	3.43B	3.31B	3.37B
	Total Liabilities
3.85B	3.86B	3.99B	4.04B	4.04B	4.04B
	Stockholders Equity
3.09B	3.14B	3.20B	3.59B	3.59B	3.65B
Cash Flow		Free Cash Flow
203.91M	264.93M	277.86M	120.83M	132.31M	237.01M
	Operating Cash Flow
203.91M	264.93M	277.86M	246.64M	244.31M	237.27M
	Investing Cash Flow
-111.69M	-109.11M	-113.09M	-152.58M	-103.48M	40.03M
	Financing Cash Flow
73.78M	-109.97M	-57.98M	-173.90M	-76.48M	-143.47M

Paramount Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.73
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 5.73 is above the 20-day moving average (MA) of 4.77, above the 50-day MA of 4.41, and above the 200-day MA of 4.73, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 80.06 is Negative, neither overbought nor oversold. The STOCH value of 94.72 is Negative, 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	72 Outperform	$1.36B	―	-2.11%	2.43%	1.67%	73.75%
DEA	66 Neutral	$978.03M	52.51	1.32%	12.60%	6.06%	-15.10%
HIW	65 Neutral	$3.13B	18.15	7.21%	6.86%	-2.01%	31.64%
Sector *	60 Neutral	$2.75B	10.29	0.33%	8508.22%	5.95%	-17.48%
DEI	60 Neutral	$2.86B	44.61	2.49%	5.37%	-1.98%	―
SLG	58 Neutral	$4.43B	663.10	-0.13%	5.45%	13.36%	94.82%
PDM	51 Neutral	$844.73M	―	-3.79%	7.64%	-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.

Paramount Group Announces Board Member Retirement

On March 24, 2025, Katharina Otto-Bernstein, a long-serving member of the Board of Directors of Paramount Group, Inc., announced her retirement and decision not to seek reelection at the company’s 2025 Annual Meeting of Stockholders. Her departure is not due to any disagreements with the company or its management. The company plans to reduce the number of directors to eight following the 2025 Annual Meeting.

Paramount Group Updates Executive Employment Agreements

On March 10, 2025, Paramount Group, Inc. entered into new employment agreements with Wilbur Paes, the Chief Operating Officer, Chief Financial Officer, and Treasurer, and Peter Brindley, the Executive Vice President, Head of Real Estate. These agreements replace their previous contracts set to expire on March 31, 2025, and include terms for automatic one-year renewals unless notice is given. The agreements also feature non-competition and non-solicitation clauses extending beyond their employment terms, impacting the company’s executive stability and strategic continuity.