Canadian Net Real Estate Investment Trust Trust Units (NET.UN) AI Stock Analysis

• Market Cap: C$126.98M
• Dividend Yield: 6.15%
• Average Volume (3M): 16.27K
• Price to Earnings (P/E): 9.4
• Beta (1Y): 0.16
• Revenue Growth: 3.20%
• EPS Growth: 39.37%
• Country: CA
• Employees: 4
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Diversified
• EPS (TTM): 0.14
• Shares Outstanding: 20,597,637
• 10 Day Avg. Volume: 16,190
• 30 Day Avg. Volume: 16,268
• PEG Ratio: -0.24
• Price to Book (P/B): 0.79
• Price to Sales (P/S): 3.91
• P/FCF Ratio: 9.59
• 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: C$6.50
• Price Target Upside: 9.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: C$6.50 ▲(9.61% Upside)

The score is driven primarily by improving financial performance and profitability, offset by meaningful leverage and uneven multi-year consistency. Valuation is supportive (low P/E and high dividend yield). Technicals show an uptrend, but overbought signals (high RSI/Stoch) add near-term risk.

Positive Factors

Strong recent revenue and margins

Exceptionally strong TTM revenue growth and very high reported margins suggest the trust currently captures significant pricing power and operating efficiency. Durable higher margins support internal cash generation and potential distribution stability, enhancing reinvestment capacity and resilience over the medium term.

Stable rental income base

A business model built on rental income and long-term leases provides predictable recurring cash flows and lowers tenant turnover risk. Diversified exposure across retail, office and industrial properties helps smooth income volatility and supports long-term occupancy and distribution reliability versus single-sector peers.

Improving cash generation

Strong year-over-year growth in OCF and FCF indicates improving ability to convert earnings into spendable cash. Higher and growing free cash flow increases flexibility to fund maintenance, debt servicing, acquisitions or distributions, strengthening the trust's capacity to execute strategic initiatives sustainably.

Negative Factors

Elevated leverage

Meaningful and persistent leverage increases financial risk, raising interest and refinancing pressures in downturns. High debt-to-equity limits strategic optionality, elevates vulnerability to rising rates or rent weakness, and can constrain capital allocation toward growth or distributions during adverse cycles.

Weak cash quality / lumpy FCF

Low operating-cash-to-net-income ratio and historically volatile free cash flow signal quality issues in reported earnings. Lumpy cash generation complicates planning for distributions, debt amortization and capex, increasing the risk that accounting profits may not translate into reliable cash available for stakeholders.

Multi-year earnings volatility

Material multi-year volatility, including prior net losses, undermines confidence in sustained profitability. This inconsistency makes forecasting cash flows and distribution coverage harder, raises operational risk in weaker cycles, and suggests earnings may depend on favorable market timing rather than purely structural growth.

Canadian Net Real Estate Investment Trust Trust Units Business Overview & Revenue Model

Company Description

Canadian Net Real Estate Investment Trust is an open-ended trust that acquires and owns high quality triple net and management-free commercial real estate properties.

How the Company Makes Money

NET.UN generates revenue primarily through rental income from its properties. The trust leases its commercial spaces to various tenants, including retailers, businesses, and organizations, which provides a consistent cash flow. Additionally, NET.UN may engage in property management and leasing services, further enhancing its revenue streams. The trust's income is bolstered by long-term leases with tenants, which provide stability and predictability in cash flow. Market demand for commercial real estate and the overall economic environment also play significant roles in the trust's earnings. The trust may benefit from partnerships with property management firms and real estate developers, which can enhance its operational efficiencies and investment opportunities.

Canadian Net Real Estate Investment Trust Trust Units Financial Statement Overview

Summary

Strong TTM rebound with very high reported profitability (gross margin ~72%, net margin ~49%) and sharply higher revenue/cash flow, but durability is tempered by multi-year volatility (including a 2022 net loss) and relatively high leverage (~1.29x debt/equity). Cash flow is positive but less supportive of earnings (OCF to net income ~0.34) and historically lumpy.

Income Statement

TTM (Trailing-Twelve-Months) revenue grew strongly (+266.7%) with very high profitability (gross margin ~72% and net margin ~49%). However, results have been volatile across years (2022 posted a net loss and 2021 showed unusually elevated margins), which reduces confidence in the durability of reported earnings despite the recent improvement versus 2024.

Balance Sheet

Leverage is meaningful for a diversified REIT: debt is ~1.29x equity in TTM (Trailing-Twelve-Months), and this level has remained consistently elevated over time (roughly 1.1x–1.5x). Equity has grown, and returns improved to ~10% in TTM (Trailing-Twelve-Months) from ~5% in 2024, but the balance sheet still carries above-average leverage that can amplify downside in weaker operating periods.

Cash Flow

Cash generation is positive, with TTM (Trailing-Twelve-Months) operating cash flow and free cash flow both at ~12.2M and growing (+263.4%). That said, cash flow covers only about one-third of accounting earnings in TTM (Trailing-Twelve-Months) (operating cash flow to net income ~0.34), and free cash flow has been very inconsistent historically (notably large spikes in 2020 and 2022), suggesting lumpiness and weaker predictability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	27.44M	26.12M	26.55M	24.73M	18.95M	12.99M
Gross Profit	19.81M	18.92M	19.43M	18.37M	14.32M	9.87M
EBITDA	20.77M	14.33M	18.08M	16.75M	29.91M	12.88M
Net Income	13.48M	7.10M	18.22M	-6.49M	25.09M	9.62M
Balance Sheet
Total Assets	316.82M	301.32M	308.35M	303.06M	278.17M	209.71M
Cash, Cash Equivalents and Short-Term Investments	1.37M	1.57M	987.72K	2.20M	1.78M	5.54M
Total Debt	175.96M	167.51M	174.71M	180.10M	144.71M	115.79M
Total Liabilities	180.83M	171.88M	178.86M	184.37M	148.35M	119.50M
Stockholders Equity	135.99M	129.44M	129.49M	118.69M	129.81M	90.21M
Cash Flow
Free Cash Flow	12.19M	10.65M	11.25M	56.02M	9.26M	78.94M
Operating Cash Flow	12.19M	10.65M	11.25M	11.33M	9.26M	6.19M
Investing Cash Flow	-20.93M	3.72M	2.71M	-41.56M	-55.79M	-73.82M
Financing Cash Flow	8.65M	-14.48M	-13.18M	29.83M	42.68M	71.79M

Canadian Net Real Estate Investment Trust Trust Units Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.93
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NET.UN, the sentiment is Positive. The current price of 5.93 is below the 20-day moving average (MA) of 5.98, above the 50-day MA of 5.71, and above the 200-day MA of 5.39, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 63.90 is Neutral, neither overbought nor oversold. The STOCH value of 80.59 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:NET.UN.

Canadian Net Real Estate Investment Trust Trust Units Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BTB.UN	78 Outperform	C$368.08M	8.78	8.60%	7.37%	0.92%	92.93%
NET.UN	69 Neutral	C$126.98M	9.41	10.16%	6.15%	3.20%	39.37%
HMT	69 Neutral	C$154.74M	8.53	8.49%	―	70.08%	-20.96%
FCD.UN	68 Neutral	C$225.25M	11.89	6.20%	8.65%	2.69%	-45.80%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
ERE.UN	55 Neutral	C$273.48M	-1.68	-40.17%	269.20%	-33.76%	-125.67%
TNT.UN	53 Neutral	C$123.01M	-4.00	-7.68%	5.79%	-5.17%	-187.42%