Public Storage (PSA) AI Stock Analysis

• Market Cap: $51.93B
• Dividend Yield: 4.05%
• Average Volume (3M): 899.27K
• Price to Earnings (P/E): 27.8
• Beta (1Y): 0.62
• Revenue Growth: 3.94%
• EPS Growth: -3.81%
• Country: US
• Employees: 5,900
• Sector: Real Estate
• Sector Strength: 79
• Industry: REIT - Industrial
• EPS (TTM): 10.64
• Shares Outstanding: 175,417,470
• 10 Day Avg. Volume: 1,138,327
• 30 Day Avg. Volume: 899,272
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 10.88
• Price to Cash Flow (P/CF): 16.60
• P/FCF Ratio: 15.30
• 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: $322.58
• Price Target Upside: 12.18% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

Public Storage scores well due to strong financial performance and effective cash flow management, positioning it as a leader in the REIT sector. Despite a high P/E ratio, the attractive dividend yield enhances its appeal. However, mixed technical indicators and challenges highlighted in the earnings call, such as revenue declines and competitive pressures, temper the overall outlook.

Positive Factors

Acquisition Strategy

PSA's proposed acquisition of a 50% stake in Abacus would mark a strategic entry into the Australian/NZ storage market, which remains relatively nascent, with low penetration.

Financial Stability

PSA expects to fund the equity stake with Aussie-denominated unsecured debt, which would help limit the foreign exchange risk.

Market Positioning

The non-binding offer to acquire Abacus Storage King is seen as a positive move, as it positions Public Storage to have approximately 50% interest in a major self-storage brand.

Negative Factors

Financial Performance

The earnings of Public Storage were below consensus expectations due to lower net operating income and equity in income.

Occupancy Challenges

The portfolio is not stabilized with only 88% occupancy, and management fees could affect the profitability of the deal.

Revenue Impact

Rent restrictions due to California wildfires are affecting the revenue outlook for Los Angeles and the total portfolio by 1%.

Public Storage Business Overview & Revenue Model

Company Description

Public Storage, a member of the S&P 500 and FT Global 500, is a REIT that primarily acquires, develops, owns and operates self-storage facilities. At September 30, 2020, we had: (i) interests in 2,504 self-storage facilities located in 38 states with approximately 171 million net rentable square feet in the United States, (ii) an approximate 35% common equity interest in Shurgard Self Storage SA (Euronext Brussels:SHUR) which owned 239 self-storage facilities located in seven Western European nations with approximately 13 million net rentable square feet operated under the Shurgard brand and (iii) an approximate 42% common equity interest in PS Business Parks, Inc. (NYSE:PSB) which owned and operated approximately 28 million rentable square feet of commercial space at September 30, 2020. Our headquarters are located in Glendale, California.

How the Company Makes Money

Public Storage makes money primarily through the rental of storage units. Customers pay monthly fees to rent these units, and the company charges based on the size and location of the unit, as well as any additional services or amenities provided. The company's revenue model is largely based on maximizing occupancy rates and optimizing pricing strategies to reflect demand fluctuations. Public Storage also generates income from ancillary services such as the sale of packing supplies and insurance products. Significant factors contributing to its earnings include strategic acquisitions to expand its portfolio, maintaining high operational efficiency, and leveraging its brand strength to attract and retain customers.

Public Storage Financial Statement Overview

Summary

Public Storage exhibits strong financial performance with high profitability, effective cash flow management, and stable revenue growth. The company has a solid equity ratio despite rising debt levels.

Income Statement

Public Storage demonstrates strong profitability with a consistent gross profit margin around 73% and an impressive EBIT margin above 70%. Revenue growth is stable, with a notable increase from 2022 to 2023. However, net profit margin slightly decreased in the latest year due to lower net income, indicating a small dip in overall profitability.

Balance Sheet

The company has a moderate debt-to-equity ratio, reflecting balanced financial leverage. The equity ratio is strong, with over 48% of assets financed by stockholders' equity, indicating financial stability. However, increasing debt levels could pose risk if not managed alongside equity growth.

Cash Flow

Public Storage exhibits robust cash flow management, with significant free cash flow supporting operations. The operating cash flow consistently exceeds net income, highlighting efficient cash conversion. A substantial increase in free cash flow in 2023 further strengthens the company's liquidity position.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.70B	4.52B	4.18B	3.42B	2.92B
	Gross Profit
3.44B	3.35B	3.13B	2.50B	2.05B
	EBIT
3.33B	3.30B	2.17B	1.71B	1.41B
	EBITDA
3.51B	3.34B	3.79B	2.86B	2.44B
	Net Income Common Stockholders
2.08B	2.15B	4.35B	1.95B	1.36B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
447.42M	370.00M	775.25M	734.60M	257.56M
	Total Assets
19.75B	19.81B	17.55B	17.38B	11.82B
	Total Debt
9.35B	9.10B	6.87B	7.48B	2.54B
	Net Debt
8.91B	8.73B	6.10B	6.74B	2.29B
	Total Liabilities
9.94B	9.70B	7.39B	7.96B	3.24B
	Stockholders Equity
9.71B	10.01B	10.07B	9.34B	8.56B
Cash Flow		Free Cash Flow
3.13B	2.79B	2.66B	2.27B	1.87B
	Operating Cash Flow
3.13B	3.25B	3.12B	2.54B	2.04B
	Investing Cash Flow
-1.00B	-3.54B	1.12B	-5.56B	-1.12B
	Financing Cash Flow
-2.08B	-112.93M	-4.19B	3.50B	-1.08B

Public Storage Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 287.56
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSA, the sentiment is Negative. The current price of 287.56 is below the 20-day moving average (MA) of 288.46, below the 50-day MA of 295.75, and below the 200-day MA of 311.84, indicating a bearish trend. The MACD of -2.36 indicates Negative momentum. The RSI at 47.84 is Neutral, neither overbought nor oversold. The STOCH value of 81.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PSA.

Public Storage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PSA	76 Outperform	$51.93B	27.83	21.01%	4.05%	3.94%	-3.81%
EXR	74 Outperform	$31.28B	35.01	6.02%	4.59%	27.21%	-18.39%
CUBE	72 Outperform	$9.11B	22.98	13.80%	5.18%	1.51%	-5.16%
IIPR	71 Outperform	$1.46B	9.34	8.20%	14.72%	-0.32%	-4.24%
NSA	60 Neutral	$4.96B	31.03	8.92%	6.15%	-10.22%	-27.58%
LINE	60 Neutral	$12.25B	―	-7.69%	1.62%	―	―
Sector *	59 Neutral	$2.71B	11.52	0.08%	8691.97%	5.56%	-16.56%

Public Storage Corporate Events

Public Storage Appoints Christopher Sambar as COO

Public Storage has appointed Christopher Sambar as its principal operating officer, bringing his extensive experience from AT&T Communications. Joining the company in October 2024, Sambar’s new role includes participation in the executive compensation program, with a base salary of $800,000, potential annual incentives, and a significant new hire bonus. His strategic leadership is expected to drive operational excellence and growth at Public Storage.