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The RMR Group Inc. (RMR)
NASDAQ:RMR
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The RMR Group
(NASDAQ:RMR)
Rating:68Neutral
Price Target:
$17.50
▲(5.55% Upside)
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)
Market Cap
$528.08M
Dividend Yield10.69%
Average Volume (3M)109.26K
Price to Earnings (P/E)14.4
Beta (1Y)0.76
Revenue Growth-16.99%
EPS Growth-24.57%
CountryUS
Employees1,000
SectorReal Estate
Sector Strength48
IndustryReal Estate - Services
Share Statistics
EPS (TTM)0.43
Shares Outstanding15,869,689
10 Day Avg. Volume106,617
30 Day Avg. Volume109,261
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.84
Enterprise Value/Revenue0.59
Enterprise Value/Gross Profit1.58
Enterprise Value/Ebitda7.15
Forecast
1Y Price Target
$17.50Price Target Upside5.55% Upside
Rating ConsensusHold
Number of Analyst Covering1
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: 0.97%|
Next Earnings Date:Nov 17, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced sentiment with notable achievements in REIT performance and strategic acquisitions, but challenges remain in fundraising and specific sectors like OPI's office properties.Q3-2025 Updates
Positive Updates
Positive Adjusted Net Income and Earnings
RMR reported adjusted net income of $0.28 per share, distributable earnings of $0.43 per share, and adjusted EBITDA of $20.1 million, all in line with expectations.
Strong Performance in Managed REITs
The share prices of certain REITs, notably DHC and ILPT, increased substantially year-to-date, leading to potential incentive fees exceeding $17 million.
Successful Retail and Residential Acquisitions
RMR closed a $21 million community shopping center and plans to generate mid-teen returns, with two residential acquisitions totaling $147 million expected to close in August.
Deleveraging Actions and Positive Market Reaction
Deleveraging actions through asset sales and refinancings have been well-received in the public market, contributing to share price improvements.
Strong DHC and SVC Results
DHC posted solid second quarter results with a 18.5% year-over-year increase in same-property cash basis NOI, while SVC's RevPAR across its hotel portfolio increased by 40 basis points year-over-year.
Negative Updates
Challenging Fundraising Environment
The fundraising environment remains overall challenging, particularly for private capital, although there are signs of improvement.
OPI Facing Headwinds
OPI continues to face challenges with its nationwide portfolio of office properties, exploring options to address upcoming debt obligations.
Decrease in Recurring Service Revenues
Recurring service revenues decreased by approximately $1.5 million due to lower property management fees at RMR Residential.
Company Guidance
During the RMR Group's Fiscal Third Quarter 2025 earnings call, management provided several key financial metrics and insights into their strategic initiatives. 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. The managed REITs have engaged in deleveraging actions, leading to an increase in share prices of certain REITs like DHC and ILPT. This resulted in potential incentive fees accruing, which could exceed $17 million by year-end. RMR's private capital initiatives now total over $12 billion, with a focus on retail and residential sectors. The retail initiative aims to build a $100 million portfolio of value-add multi-tenant retail assets, with the first investment being a $21 million shopping center near Chicago. For the residential platform, two upcoming acquisitions in North Carolina and Florida are expected to close at a combined cost of $147 million. These will seed the RMR Residential enhanced growth venture, targeting returns in the mid to high teens. Additionally, RMR expects service revenues to rise to approximately $45 million next quarter, with adjusted EBITDA projected at $20.5 million and distributable earnings between $0.44 and $0.46 per share. The company anticipates ending the fiscal year with around $60 million in cash and no borrowings on its $100 million line of credit.The RMR Group Financial Statement Overview
Summary
The RMR Group faces 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.Income Statement
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.65
Positive
Balance Sheet
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.70
Positive
Cash Flow
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.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 753.59M | 897.61M | 962.32M | 832.50M | 607.24M | 589.50M |
| Gross Profit | 282.55M | 288.46M | 169.56M | 133.86M | 117.56M | 107.55M |
| EBITDA | 62.27M | 69.07M | 121.05M | 90.81M | 78.57M | 73.20M |
| Net Income | 19.52M | 23.13M | 57.15M | 77.47M | 81.01M | 66.33M |
Balance Sheet | ||||||
| Total Assets | 648.02M | 700.49M | 582.42M | 542.40M | 497.91M | 690.25M |
| Cash, Cash Equivalents and Short-Term Investments | 121.28M | 141.60M | 267.99M | 189.09M | 159.84M | 369.66M |
| Total Debt | 116.25M | 114.31M | 30.11M | 30.32M | 34.07M | 36.44M |
| Total Liabilities | 238.69M | 281.08M | 158.76M | 172.67M | 150.20M | 149.35M |
| Stockholders Equity | 231.34M | 237.57M | 240.07M | 206.62M | 195.12M | 295.92M |
Cash Flow | ||||||
| Free Cash Flow | 50.61M | 57.51M | 105.23M | 100.15M | 70.65M | 76.90M |
| Operating Cash Flow | 54.42M | 61.38M | 109.22M | 101.27M | 71.79M | 77.50M |
| Investing Cash Flow | -167.66M | -209.84M | 49.50M | -10.59M | -1.14M | -5.92M |
| Financing Cash Flow | 26.54M | 22.07M | -79.81M | -61.43M | -280.48M | -60.36M |
The RMR Group Technical Analysis
Positive
16.58
Price Trends
16.32
Positive
15.48
Positive
17.18
Negative
Market Momentum
0.01
Negative
52.58
Neutral
87.37
Negative
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 16.58 is above the 20-day moving average (MA) of 16.51, above the 50-day MA of 16.32, and below the 200-day MA of 17.18, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 52.58 is Neutral, neither overbought nor oversold. The STOCH value of 87.37 is Negative, 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | $528.08M | 14.39 | 8.12% | 10.69% | -16.99% | -24.57% | |
63 Neutral | $6.82B | 13.32 | -1.02% | 7.20% | 3.67% | -27.43% | |
| ― | $75.59M | ― | -0.14% | ― | ― | ― | |
49 Neutral | $338.77M | ― | -47.84% | ― | 57.16% | -372.16% | |
| ― | $248.31M | 15.47 | 6.76% | ― | ― | ||
61 Neutral | $510.03M | 94.97 | 1.26% | ― | 2.45% | -29.26% | |
55 Neutral | $394.90M | 59.81 | 0.79% | ― | -4.20% | 11.20% |
* Real Estate Sector Average
Performance Comparison
RMR
The RMR Group
16.58
-5.56
-25.11%
MAYS
JW Mays
37.50
-7.00
-15.73%
MLP
Maui Land & Pineapple Company
17.16
-5.11
-22.95%
NEN
New England Realty Associates Partnershi
71.01
-0.73
-1.02%
FRPH
FRP Holdings
26.01
-3.44
-11.68%
TCI
Transcontinental Realty Investors
45.71
15.98
53.75%
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.
The most recent analyst rating on (RMR) stock is a Hold with a $25.00 price target. To see the full list of analyst forecasts on The RMR Group stock, see the RMR Stock Forecast page.
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.