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Tanger (SKT)
NYSE:SKT
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Tanger
(NYSE:SKT)
66Neutral
Positive Factors
Earnings Growth
Forecast annual FFO growth of 6.5% over each of 2025, 2026, and 2027 indicates strong future performance.
Financial Health
SKT has a strong balance sheet with an estimated ~$250M of debt capacity up to 5.5x leverage, augmented by $75M+.
Operational Strategy
SKT's strategy of driving increased traffic through a reinvigorated tenancy and expansion into adjacent open-air centers is seen positively.
Negative Factors
Lease Terms
SKT's lease terms are shorter than those of traditional retail with 44% of ABR turnover.
Market Position
SKT outlets are largely in secondary/tertiary markets, with lower demographics.
Tenant Dynamics
Top tenants/brands aren't particularly vibrant with foot traffic underperforming peers as per Placer data.
Tanger (SKT) vs. S&P 500 (SPY)
Market Cap
$3.71B
Dividend Yield3.34%
Average Volume (3M)843.95K
Price to Earnings (P/E)37.4
Beta (1Y)0.88
Revenue Growth13.29%
EPS Growth-4.51%
CountryUS
Employees372
SectorReal Estate
Sector Strength69
IndustryREIT - Retail
Share Statistics
EPS (TTM)0.88
Shares Outstanding112,704,735
10 Day Avg. Volume797,146
30 Day Avg. Volume843,953
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)6.83
Price to Cash Flow (P/CF)15.40
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$39.60Price Target Upside20.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Tanger Business Overview & Revenue Model
Company DescriptionTanger Inc. (NYSE: SKT) is a leading owner and operator of outlet and open-air retail shopping destinations, with over 43 years of expertise in the retail and outlet shopping industries. Tanger's portfolio of 38 outlet centers, one adjacent managed center and one open-air lifestyle center comprises over 15 million square feet well positioned across tourist destinations and vibrant markets in 20 U.S. states and Canada. A publicly traded REIT since 1993, Tanger continues to innovate the retail experience for its shoppers with over 3,000 stores operated by more than 700 different brand name companies.
How the Company Makes MoneyTanger makes money primarily through leasing retail space to tenants at its outlet shopping centers. The company generates revenue from rental income, which includes base rent, percentage rent based on tenant sales, and reimbursement from tenants for property operating expenses such as maintenance, utilities, and taxes. Additionally, Tanger may earn revenue from ancillary services and partnerships, such as advertising and sponsorship deals. The company's ability to attract popular retail brands and maintain high occupancy rates at its outlets is critical to its financial performance.
Tanger Financial Statement Overview
Summary
Tanger shows solid financial standing with strong revenue growth and operational efficiency. Despite high leverage, the company effectively generates cash and returns on equity. Stability in cash flow and consistent profitability indicate a well-managed financial structure, although high debt levels pose a potential risk.Income Statement
Tanger has demonstrated a consistent growth trajectory with a 13.3% increase in revenue from 2023 to 2024. The company also maintained a strong gross profit margin of approximately 69.8%. However, the net profit margin decreased slightly from 21.3% in 2023 to 18.8% in 2024, indicating slightly increased costs or other expenses. The EBIT and EBITDA margins remain robust at 55.0% and 81.4% respectively, showing strong operational efficiency.72
Positive
Balance Sheet
The company has a high debt-to-equity ratio of 3.75, which suggests significant leverage. However, the return on equity improved to 14.5% in 2024, indicating effective utilization of equity to generate profits. The equity ratio stands at 28.5%, showing a moderate reliance on equity financing.65
Positive
Cash Flow
Tanger's free cash flow remained stable with no capital expenditures reported for 2024, highlighting efficient cash management. The operating cash flow to net income ratio of 2.64 in 2024 indicates strong cash generation relative to net income, while the free cash flow to net income ratio was similarly high. However, the free cash flow growth was flat, suggesting limited reinvestment or expansion.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 526.06M | 464.41M | 442.61M | 426.52M | 389.99M | Gross Profit |
| 367.33M | 318.86M | 298.68M | 285.79M | 252.86M | EBIT |
| 289.31M | 133.84M | 129.86M | 117.27M | 90.03M | EBITDA |
| 302.09M | 242.73M | 241.77M | 227.28M | 207.17M | Net Income Common Stockholders |
| 98.59M | 99.15M | 38.03M | -51.06M | -101.47M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 46.99M | 21.96M | 264.57M | 161.25M | 84.83M | Total Assets |
| 2.38B | 2.32B | 2.22B | 2.16B | 2.19B | Total Debt |
| 1.51B | 1.53B | 1.52B | 1.49B | 1.66B | Net Debt |
| 1.46B | 1.51B | 1.30B | 1.32B | 1.57B | Total Liabilities |
| 1.70B | 1.73B | 1.70B | 1.66B | 1.83B | Stockholders Equity |
| 679.67M | 566.78M | 491.64M | 477.93M | 341.39M |
| Cash Flow | Free Cash Flow | |||
| 260.68M | 229.61M | 166.60M | 171.80M | 136.74M | Operating Cash Flow |
| 260.68M | 229.61M | 213.96M | 217.72M | 164.75M | Investing Cash Flow |
| -178.01M | -409.56M | -98.82M | -22.74M | -18.77M | Financing Cash Flow |
| -48.34M | -19.28M | -64.16M | -118.38M | -77.59M |
Tanger Technical Analysis
Neutral
32.92
Price Trends
33.56
Negative
34.18
Negative
31.78
Positive
Market Momentum
-0.36
Negative
47.13
Neutral
72.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKT, the sentiment is Neutral. The current price of 32.92 is below the 20-day moving average (MA) of 33.11, below the 50-day MA of 33.56, and above the 200-day MA of 31.78, indicating a neutral trend. The MACD of -0.36 indicates Negative momentum. The RSI at 47.13 is Neutral, neither overbought nor oversold. The STOCH value of 72.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SKT.
Tanger Risk Analysis
Tanger disclosed 35 risk factors in its most recent earnings report. Tanger 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
Tanger Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $13.31B | 34.49 | 5.82% | 3.72% | 10.15% | 3.36% | |
68 Neutral | $61.94B | 21.77 | 80.78% | 4.93% | 5.40% | 8.57% | |
66 Neutral | $3.71B | 37.44 | 16.02% | 3.34% | 13.29% | -4.51% | |
63 Neutral | $14.22B | 37.89 | 4.03% | 4.63% | 14.51% | -45.53% | |
61 Neutral | $4.71B | 17.72 | -2.95% | 11.43% | 6.02% | -21.34% | |
56 Neutral | $823.51M | 14.27 | 17.79% | 6.01% | -3.68% | 990.23% | |
53 Neutral | $4.48B | ― | -7.50% | 3.98% | 4.88% | -66.88% |
* Real Estate Sector Average
Performance Comparison
SKT
Tanger
32.92
4.60
16.24%
KIM
Kimco Realty
20.93
2.67
14.62%
MAC
Macerich
17.08
0.95
5.89%
REG
Regency Centers
72.87
15.51
27.04%
SPG
Simon Property
164.28
18.21
12.47%
CBL
CBL & Associates Properties
26.62
5.91
28.54%
Tanger Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -4.83% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive sentiment with strong financial performance, high occupancy rates, and successful acquisitions. However, there were some concerns regarding tenant credit issues and potential increased competition in certain markets.Highlights
Strong Fourth Quarter Performance
Tanger delivered a strong fourth quarter, with full-year core FFO per share up 8.7% from the prior year, driven by a 5.1% increase in same center NOI. Traffic and comparable sales grew for both the quarter and the year.
High Occupancy Rates
Center occupancy was 98%, up 70 basis points year-over-year and 60 basis points for the quarter. Same center occupancy was 98.2%, up 90 basis points for the year and 80 basis points for the quarter.
Successful Acquisitions
Tanger acquired The Promenade at Chenal in Little Rock and Pinecrest in Cleveland, adding approximately 910,000 square feet to the portfolio with expected 8% first-year returns. These acquisitions were made with cash on hand and available liquidity.
Positive Rent Spreads
Tanger reported positive rent spreads for 12 consecutive quarters, with total rent spreads of 50% for the year, including 38% spreads on re-tenanted space and 13% on renewed space.
Lowlights
SWAP Maturities Impact
Financial results were offset by SWAP maturities earlier in the year, which affected overall performance.
Potential Tenant Credit Concerns
There are some watchlist concerns with tenants like Forever 21, which has nine stores in Tanger's portfolio, indicating potential future vacancies.
Competitive Market in Nashville
Simon is planning a development in Nashville, close to Tanger's existing center, which may increase competition.
Company Guidance
During the call, Tanger Inc. provided guidance for the fiscal year 2025, projecting core FFO per share growth between 4% and 8%, with a range of $2.22 to $2.30. This guidance includes recent acquisitions of Pinecrest and The Promenade at Chenal, which are expected to deliver approximately 8% returns in their first year. Same-center NOI growth is anticipated to be between 2% and 4%. The company ended 2024 with strong financial performance, including a full-year core FFO per share increase of 8.7% over 2023, driven by a 5.1% rise in same-center NOI. Tanger's balance sheet remains strong, with low leverage and ample liquidity, supported by the sale of 2.6 million shares under the ATM program and forward sale agreements for an additional 1.9 million shares. The company's occupancy rate reached 98%, and it achieved 12 consecutive quarters of positive rent spreads, with total rent spreads of 50% for the year.Tanger Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Tanger Announces Termination of ATM Equity Program
Neutral
Feb 24, 2025
Tanger Inc. has launched a new ‘at the market’ offering program, allowing the issuance and sale of its common shares up to $400 million, replacing a previous program. On February 24, 2025, Tanger terminated its existing ATM Equity Offering Sales Agreement from December 2023, having previously sold over 4.4 million shares and entered into forward sales agreements for nearly 1.9 million shares. The prior program, with $34.5 million in remaining shares, is now terminated except for outstanding forward sales provisions.
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Tanger Reports Strong 2024 Financial Performance
Positive
Feb 19, 2025
On February 19, 2025, Tanger reported its financial results for the fourth quarter and full year of 2024, highlighting robust leasing activity and strategic acquisitions of two shopping centers. The company achieved an occupancy rate of 98% and increased its same center net operating income by 5.1% year-over-year, emphasizing its successful growth strategy and strong financial performance.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.