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Artis Reit (OTC) (TSE:AX.UN)
OTHER OTC:AX.UN
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Artis Real Estate Investment
(OTC:AX.UN)
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Rating:63Neutral
Price Target:
C$9.50
â–²(27.86% Upside)
The overall stock score of 63 reflects a mixed outlook. The most significant factor is the strong technical analysis, indicating bullish momentum. However, financial performance is challenged by declining revenue and profitability, partially offset by strong cash flow generation. The valuation is moderate, with a negative P/E ratio but a high dividend yield.
Positive Factors
Strong free cash flow generation
Sustained FCF growth and a high FCF-to-earnings ratio indicate the business converts asset cash flows well. Over months this supports distributions, debt servicing, and reinvestment into properties, giving management durable financial flexibility despite accounting losses.
Manageable leverage
A moderate debt-to-equity ratio suggests capital structure room to fund development or acquisitions without excessive refinancing strain. This balance reduces default risk and preserves strategic optionality for portfolio optimization across economic cycles over the medium term.
Diversified portfolio across sectors and geographies
Exposure to multiple property types and two national markets lowers concentration risk and smooths cash flows as sector cycles diverge. Structural diversification enables reallocation toward higher-growth segments (e.g., industrial) and supports long-term occupancy and rental resilience.
Negative Factors
Declining revenue trend
Material revenue decline undermines recurring rental income and signals potential tenant churn or underutilized assets. Persisting revenue contraction over quarters constrains reinvestment capacity, pressures coverage metrics and makes long-term earnings recovery more challenging without asset actions.
Negative net profit margins
A materially negative net margin indicates current operations and non-cash charges are eroding profitability. Over months, sustained negative margins reduce retained capital, limit the ability to self-fund improvements, and increase reliance on external financing or asset sales to maintain distributions.
Negative return on equity
Negative ROE shows the trust is currently destroying shareholder capital rather than creating it, implying returns on invested capital are below cost. This structural weakness hinders ability to attract new equity, fund growth internally, and improve long-term unit-holder value without operational fixes.
Artis Real Estate Investment (AX.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$851.22M
Dividend Yield7.28%
Average Volume (3M)405.43K
Price to Earnings (P/E)―
Beta (1Y)0.67
Revenue Growth-20.06%
EPS Growth19.27%
CountryCA
Employees143
SectorReal Estate
Sector Strength53
IndustryREIT - Diversified
Share Statistics
EPS (TTM)-0.38
Shares Outstanding95,966,480
10 Day Avg. Volume290,415
30 Day Avg. Volume405,433
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)0.49
Price to Sales (P/S)2.57
P/FCF Ratio9.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Artis Real Estate Investment Business Overview & Revenue Model
Company DescriptionArtis Real Estate Investment Trust (AX.UN) is a Canadian real estate investment trust that focuses on the acquisition, management, and development of high-quality commercial properties across key markets in Canada and the United States. The company primarily operates in the retail, office, and industrial sectors, offering a diverse portfolio of income-generating properties. Artis aims to create long-term value for its unitholders through its strategic investment approach and active asset management.
How the Company Makes MoneyArtis Real Estate Investment generates revenue primarily through the leasing of its commercial properties, which provides a steady stream of rental income. The company earns money from long-term leases with tenants in its retail, office, and industrial properties, typically structured to include base rent and additional recoverable expenses. Additionally, Artis may engage in property development and redevelopment projects, creating value through the enhancement of its property portfolio. The company also benefits from potential capital appreciation of its real estate holdings. Strategic partnerships with various stakeholders in the real estate sector, including property management firms and financial institutions, further support its revenue generation efforts. Overall, Artis Real Estate Investment Trust's revenue model is centered around a diversified portfolio of income-producing assets and strategic property management.
Artis Real Estate Investment Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 26, 2026
Earnings Call Sentiment Neutral
The earnings call reflected a stable and strategically productive quarter with positive developments in leasing, occupancy, and deleveraging. However, challenges such as elevated payout ratios, increased debt to gross book value, and strategic review costs remain. The company is actively managing these challenges while exploring growth opportunities.Q2-2025 Updates
Positive Updates
Increased Occupancy Rates
Occupancy rates rose to 87.8% as of June 30 from 87.1% at March 31, driven by a new 80,600 square foot lease in the U.S. industrial portfolio.
Successful Lease Renewals
210,643 square feet of renewals commenced during the quarter with rental rates increasing by 3.6%, indicating strong tenant relationships and asset strength.
Deleveraging Initiatives
Closed on the sale of a Canadian retail property for $4.8 million and went unconditional on the sale of a 90% interest in U.S. development land for USD 11.3 million, contributing to deleveraging efforts.
Repurchase of Common Units
Repurchased 1.77 million common units at an average price of $7.28, along with 25,700 Series E and 33,200 Series I preferred units, totaling 3.8 million common units repurchased at an average price of $7.42.
Negative Updates
Elevated Payout Ratios
Payout ratios were elevated, and income metrics like FFO and AFFO may fluctuate quarter-to-quarter.
Increased Debt to Gross Book Value
Debt to gross book value increased to 41.1% as of June 30, compared to 40.2% at the most recent year-end.
Strategic Review Costs
Incurred strategic review costs in G&A due to ongoing capital allocation explorations.
Company Guidance
During the second quarter of 2025, Artis Real Estate Investment Trust focused on reducing leverage and strengthening its balance sheet, aiming to maximize long-term value for its unitholders. Occupancy levels increased to 87.8%, up from 87.1% in the previous quarter, driven by the commencement of a new 80,600 square foot lease and 210,643 square feet of renewals with rental rates rising by 3.6%. The company closed the sale of a Canadian retail property for $4.8 million and went unconditional on the sale of a 90% interest in U.S. development land for USD 11.3 million. Debt to gross book value was at 41.1% as of June 30, 2025. The net asset value per unit stood at $12.98, reflecting impacts from foreign exchange, distributions, credit loss provisions, and fair value adjustments. Artis repurchased 1.77 million common units at an average price of $7.28 and continued to actively manage upcoming mortgage maturities. The company is exploring strategic options for the Cominar portfolio, with discussions progressing and a resolution expected by year-end.Artis Real Estate Investment Financial Statement Overview
Summary
Artis Real Estate Investment faces challenges with declining revenues and persistent net losses, impacting profitability. The balance sheet shows a manageable debt level, but negative returns on equity highlight profitability issues. Cash flow management is a strength, with positive free cash flow growth and efficient cash conversion, providing some financial stability.Income Statement
The income statement shows declining revenue with a negative growth rate of -9.09% TTM. Gross profit margins are relatively stable at around 53-56%, but net profit margins are negative, indicating ongoing losses. The EBIT margin is positive but has decreased over time, reflecting operational challenges.45
Neutral
Balance Sheet
The balance sheet reveals a moderate debt-to-equity ratio of 0.68 TTM, which is an improvement from previous years. However, the return on equity is negative, indicating that the company is not generating profits from its equity base. The equity ratio is stable, suggesting a balanced asset structure.55
Neutral
Cash Flow
Cash flow analysis shows a significant improvement in free cash flow growth at 45.1% TTM. The operating cash flow to net income ratio is low, reflecting challenges in converting income into cash. However, the free cash flow to net income ratio is nearly 1, indicating efficient cash management despite net losses.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 249.75M | 300.37M | 335.84M | 372.51M | 419.50M | 458.92M |
| Gross Profit | 129.30M | 163.23M | 184.02M | 209.98M | 237.78M | 269.27M |
| EBITDA | 4.36M | 53.88M | -217.19M | 294.89M | 232.92M | 265.09M |
| Net Income | -75.08M | -47.41M | -332.07M | -5.29M | 389.18M | 21.54M |
Balance Sheet | ||||||
| Total Assets | 2.60B | 2.80B | 3.74B | 4.55B | 4.58B | 4.86B |
| Cash, Cash Equivalents and Short-Term Investments | 64.16M | 32.79M | 28.94M | 29.17M | 221.47M | 34.70M |
| Total Debt | 1.11B | 1.13B | 1.91B | 2.21B | 1.97B | 2.40B |
| Total Liabilities | 1.19B | 1.22B | 2.02B | 2.32B | 2.12B | 2.53B |
| Stockholders Equity | 1.41B | 1.58B | 1.72B | 2.23B | 2.46B | 2.33B |
Cash Flow | ||||||
| Free Cash Flow | 109.96M | 79.73M | 79.59M | 140.72M | 202.28M | 176.31M |
| Operating Cash Flow | 109.96M | 80.14M | 79.96M | 140.74M | 202.29M | 176.33M |
| Investing Cash Flow | 58.51M | 652.11M | 298.39M | -288.99M | 607.47M | 165.96M |
| Financing Cash Flow | -158.09M | -730.44M | -378.19M | -46.57M | -622.97M | -350.00M |
Artis Real Estate Investment Technical Analysis
Positive
7.43
Price Trends
7.33
Positive
6.88
Positive
6.96
Positive
Market Momentum
0.38
Negative
83.22
Negative
95.84
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AX.UN, the sentiment is Positive. The current price of 7.43 is below the 20-day moving average (MA) of 8.19, above the 50-day MA of 7.33, and above the 200-day MA of 6.96, indicating a bullish trend. The MACD of 0.38 indicates Negative momentum. The RSI at 83.22 is Negative, neither overbought nor oversold. The STOCH value of 95.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:AX.UN.
Artis Real Estate Investment Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | C$4.03B | 8.65 | 11.49% | 5.74% | 4.11% | 35.99% | |
76 Outperform | C$949.70M | 7.83 | 6.37% | 4.41% | 3.83% | 63.32% | |
68 Neutral | C$4.14B | 16.77 | 6.18% | 4.71% | -0.83% | -28.93% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
63 Neutral | C$851.22M | -10.25 | -4.93% | 7.28% | -20.06% | 19.27% | |
62 Neutral | C$800.43M | 9.89 | 7.32% | 8.07% | 0.41% | 78.32% | |
53 Neutral | C$367.00M | -2.42 | -14.98% | 5.65% | -1.06% | -20.07% |
* Real Estate Sector Average
TSE:AX.UN
Artis Real Estate Investment
9.11
2.48
37.34%
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CT Real Estate Investment
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28.05%
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First Capital Realty
19.87
3.82
23.80%
TSE:MRG.UN
Morguard NA REIT UN
18.33
2.14
13.22%
TSE:D.UN
Dream Office Real Estate Investment
19.35
2.76
16.63%
TSE:NXR.UN
Nexus Real Estate Investment
8.10
1.23
17.97%
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.