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The RMR Group Inc. (RMR)
NASDAQ:RMR
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The RMR Group (RMR) AI Stock Analysis

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RMR

The RMR Group

(NASDAQ:RMR)

Rating:71Outperform
Price Target:
$18.50
▲(10.12% Upside)
RMR's overall stock score reflects a balanced view of its financial performance, technical analysis, valuation, and earnings call insights. The company's attractive dividend yield and strategic initiatives are positive, but challenges in revenue growth and profitability, along with a difficult fundraising environment, weigh on the score.
Positive Factors
Debt Management
Recent debt transactions offer some dry powder to expand the private capital platform.
Liquidity
Recent financing transactions have solidified RMR’s liquidity, including a master repurchase agreement and credit facility.
Negative Factors
REIT Performance
Continued downside from the managed REITs, which have been negatively influenced by excessive leverage and operating headwinds, causing fee income to decline.
Revenue Challenges
High leverage and operating headwinds across its managed REIT business will likely curb revenues.

The RMR Group (RMR) vs. SPDR S&P 500 ETF (SPY)

The RMR Group Business Overview & Revenue Model

Company DescriptionThe RMR Group Inc., through its subsidiary, The RMR Group LLC, provides business and property management services in the United States. The company provides management services to its four publicly traded real estate investment trusts and three real estate operating companies. It also provides investment advisory services. The company was formerly known as REIT Management & Research Inc. and changed its name to The RMR Group Inc. in September 2015. The RMR Group Inc. was founded in 1986 and is headquartered in Newton, Massachusetts.
How the Company Makes MoneyRMR generates revenue primarily through property management fees, leasing commissions, and acquisition fees associated with the properties it manages. The company earns a percentage of the rental income generated by the properties, which is a significant source of recurring revenue. Additionally, RMR benefits from asset management fees charged to its clients for overseeing their real estate investments. Strategic partnerships with various real estate investment trusts (REITs) and institutional investors further contribute to RMR's earnings by expanding its portfolio and creating economies of scale in operations. The company also engages in performance-based incentives, allowing it to earn additional income based on the success of the properties it manages.

The RMR Group Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Nov 17, 2025
Earnings Call Sentiment Neutral
The earnings call indicates a balanced perspective with both positive and negative elements. While there are significant achievements in terms of adjusted EBITDA, share price increases, and strategic acquisitions, challenges remain in the fundraising environment, RMR Residential revenue, and OPI's portfolio. The company is strategically positioned for growth but faces certain financial and market challenges.
Q3-2025 Updates
Positive Updates
Adjusted EBITDA Achievements
Reported adjusted EBITDA of $20.1 million for the quarter, in line with expectations.
Increase in REIT Share Prices and Incentive Fees
Share prices of managed REITs, particularly DHC and ILPT, have increased substantially year-to-date. This has resulted in potential incentive fees of over $17 million for RMR.
Expansion of Private Capital Initiatives
The private capital platform now totals over $12 billion, with plans to accumulate a portfolio of value-add multi-tenant retail assets of approximately $100 million.
Notable Residential Sector Investments
Anticipated closing of two value-add acquisitions in August for a total of $147 million, supporting the launch of the RMR Residential enhanced growth venture.
DHC's Solid Performance
DHC posted strong second quarter results, with the SHOP segment's same-property cash basis NOI increasing by 18.5% year-over-year.
ILPT's Successful Debt Refinancing
ILPT refinanced $1.2 billion of floating rate debt with new 5-year fixed rate debt at a weighted average interest rate of 6.4%.
Negative Updates
Challenging Fundraising Environment
The fundraising environment for private capital remains challenging, impacting the ability to grow private capital AUM quickly.
RMR Residential Revenue Decline
Recurring service revenues decreased by approximately $1.5 million due to lower property management fees at RMR Residential.
OPI's Ongoing Headwinds
OPI continues to face challenges associated with its nationwide portfolio of office properties and is exploring options to address upcoming debt obligations.
Increased Interest Expenses
Interest expense is expected to rise to $1.7 million next quarter, impacting adjusted earnings per share.
Company Guidance
During the RMR Group's Fiscal Third Quarter 2025 Earnings Conference Call, the company reported an adjusted net income of $0.28 per share, distributable earnings of $0.43 per share, and adjusted EBITDA of $20.1 million, in line with expectations. The call highlighted strategic initiatives such as deleveraging actions for managed REITs and expanding the private capital business, which now totals over $12 billion. Key achievements included a $21 million retail investment near Chicago and anticipated mid-teen returns from residential sector investments, with a robust $1 billion pipeline in both residential and credit platforms. The company expects adjusted EBITDA of approximately $20.5 million next quarter. Additionally, RMR anticipates potential incentive fees exceeding $17 million by year-end, driven by improved share prices in REITs like DHC and ILPT.

The RMR Group Financial Statement Overview

Summary
The RMR Group's financial performance shows challenges in revenue growth and profitability, with declining margins and cash flow growth. The balance sheet remains stable with manageable leverage, but reduced return on equity indicates potential inefficiencies. Overall, the company needs to address revenue and profit growth to improve its financial standing.
Income Statement
65
Positive
The RMR Group's income statement shows a declining revenue trend with a negative growth rate of -6.31% in the TTM period. Gross profit margin has decreased slightly to 30.26%, and net profit margin is relatively low at 2.52%. The EBIT and EBITDA margins are stable but modest at 7.23% and 7.52%, respectively. Overall, the company faces challenges in revenue growth and profitability.
Balance Sheet
70
Positive
The balance sheet reflects a moderate debt-to-equity ratio of 0.48, indicating manageable leverage. Return on equity has decreased to 8.55%, suggesting reduced efficiency in generating profits from equity. The equity ratio is not explicitly calculated but appears stable given the equity and asset figures. The company maintains a balanced financial structure but shows signs of declining profitability.
Cash Flow
60
Neutral
Cash flow analysis reveals a decline in free cash flow growth by -15.97% in the TTM period. The operating cash flow to net income ratio is 0.66, indicating moderate cash generation relative to net income. Free cash flow to net income ratio is high at 0.94, suggesting efficient cash conversion. Despite strong cash conversion, the decline in free cash flow growth is a concern.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue753.59M897.61M962.32M832.50M607.24M589.50M
Gross Profit282.55M288.46M169.56M133.86M117.56M107.55M
EBITDA62.27M69.07M121.05M90.81M78.57M73.20M
Net Income19.52M23.13M57.15M77.47M81.01M66.33M
Balance Sheet
Total Assets648.02M700.49M582.42M542.40M497.91M690.25M
Cash, Cash Equivalents and Short-Term Investments121.28M141.60M267.99M189.09M159.84M369.66M
Total Debt116.25M114.31M30.11M30.32M34.07M36.44M
Total Liabilities238.69M281.08M158.76M172.67M150.20M149.35M
Stockholders Equity231.34M237.57M240.07M206.62M195.12M295.92M
Cash Flow
Free Cash Flow50.61M57.51M105.23M100.15M70.65M76.90M
Operating Cash Flow54.42M61.38M109.22M101.27M71.79M77.50M
Investing Cash Flow-167.66M-209.84M49.50M-10.59M-1.14M-5.92M
Financing Cash Flow26.54M22.07M-79.81M-61.43M-280.48M-60.36M

The RMR Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price16.80
Price Trends
50DMA
16.60
Positive
100DMA
15.66
Positive
200DMA
16.80
Positive
Market Momentum
MACD
0.08
Negative
RSI
53.68
Neutral
STOCH
56.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RMR, the sentiment is Positive. The current price of 16.8 is above the 20-day moving average (MA) of 16.54, above the 50-day MA of 16.60, and above the 200-day MA of 16.80, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 53.68 is Neutral, neither overbought nor oversold. The STOCH value of 56.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RMR.

The RMR Group Risk Analysis

The RMR Group disclosed 2 risk factors in its most recent earnings report. The RMR Group reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

The RMR 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
71
Outperform
$535.41M14.398.12%10.71%-16.99%-24.57%
63
Neutral
$7.02B13.29-0.50%6.92%4.08%-25.24%
$78.11M-0.14%
49
Neutral
$339.38M-45.55%74.64%-256.63%
$253.52M15.80
6.67%
61
Neutral
$486.33M90.011.26%2.45%-29.26%
55
Neutral
$407.34M61.700.79%-4.20%11.20%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RMR
The RMR Group
16.80
-5.51
-24.70%
MAYS
JW Mays
38.75
-5.49
-12.41%
MLP
Maui Land & Pineapple Company
17.40
-7.06
-28.86%
NEN
New England Realty Associates Partnershi
72.00
-4.36
-5.71%
FRPH
FRP Holdings
25.50
-3.03
-10.62%
TCI
Transcontinental Realty Investors
47.15
18.74
65.96%

The RMR Group Corporate Events

Business Operations and StrategyFinancial Disclosures
The RMR Group Highlights Growth and Sustainability
Positive
Jun 2, 2025

On June 2, 2025, The RMR Group Inc. released an investor presentation highlighting its diversified revenue sources and durable earnings, with nearly 70% of service revenues derived from long-term contracts. The company is well-positioned for growth with a scalable infrastructure and significant liquidity, presenting a compelling investment opportunity due to its valuation discount to industry peers. The presentation also emphasized RMR’s commitment to sustainability and its competitive advantage as a vertically integrated real estate operating platform.

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: Sep 05, 2025