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Vornado Realty (VNO)
NYSE:VNO
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Vornado Realty
(NYSE:VNO)64Neutral
Positive Factors
Earnings
VNO reported higher-than-expected FFO, driven by increased non-SS revenue and joint venture income.
Leasing Activity
Office occupancy and rent spreads showed strong performance, exceeding estimates.
Negative Factors
Occupancy Decline
Total occupancy decreased by 160 basis points quarter over quarter due to known moveouts.
Vornado Realty (VNO) vs. S&P 500 (SPY)
Market Cap
$15.38B
Dividend Yield1.84%
Average Volume (3M)1.36M
Price to Earnings (P/E)957.2
Beta (1Y)2.05
Revenue Growth-1.30%
EPS Growth-80.81%
CountryUS
Employees2,996
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)0.04
Shares Outstanding190,846,570
10 Day Avg. Volume1,428,533
30 Day Avg. Volume1,363,997
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.30
Price to Cash Flow (P/CF)9.30
P/FCF Ratio8.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$39.44Price Target Upside-0.78% Downside
Rating ConsensusHold
Number of Analyst Covering10
Vornado Realty Business Overview & Revenue Model
Company DescriptionVornado Realty Trust (VNO) is a leading real estate investment trust (REIT) based in the United States, primarily engaged in the ownership, management, and development of office and retail properties. The company focuses on high-quality assets in key urban markets, particularly in New York City, where it holds a substantial portion of its portfolio. Vornado's core services include property leasing, development, and management, catering to a diverse range of tenants, including commercial, retail, and residential clients.
How the Company Makes MoneyVornado Realty Trust generates revenue primarily through the leasing of its extensive portfolio of office and retail properties. The company's income is derived from rental payments made by tenants occupying space in its buildings. Additionally, Vornado engages in property development, creating new or redeveloping existing spaces to enhance their value and increase rental income potential. The company's earnings are also supported by strategic partnerships and joint ventures, which enable it to leverage additional capital and expertise. Key factors contributing to Vornado's revenue include occupancy rates, rental rates, and the overall demand for commercial and retail space in its primary markets.
Vornado Realty Financial Statement Overview
Summary
Vornado Realty's financial performance reflects challenges in revenue growth and profitability, with stable cash flow generation. The balance sheet benefits from no debt but remains highly leveraged, posing potential risks. Overall, the company exhibits operational resilience but faces profitability pressures and high leverage.Income Statement
The income statement shows a decline in revenue over the last year, with a modest gross profit margin of 48.1% in 2024. The net profit margin dropped significantly to 3.67% from the previous year's 5.83%, indicating challenges in maintaining profitability. The EBIT margin remains relatively healthy at 39.8%, but the EBITDA margin is negative due to high depreciation and amortization expenses, suggesting operational inefficiencies.65
Positive
Balance Sheet
The balance sheet reflects a strong equity position with a debt-to-equity ratio of 0, indicating no debt burden in 2024. However, the equity ratio stands at 23.05%, signaling high leverage with significant liabilities compared to assets. The return on equity has decreased to 1.27%, showing limited profitability for shareholders.60
Neutral
Cash Flow
The cash flow statement demonstrates stability with positive operating cash flow and free cash flow. The free cash flow growth rate is negative due to decreased operating cash flow year-over-year. The operating cash flow to net income ratio is robust, suggesting effective cash conversion from earnings.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.79B | 1.81B | 1.80B | 1.59B | 1.53B | Gross Profit |
| 859.89M | 906.00M | 926.08M | 791.89M | 738.88M | EBIT |
| 711.37M | 815.87M | -175.44M | 380.13M | -171.43M | EBITDA |
| -794.92M | 845.61M | 423.31M | 792.48M | 228.26M | Net Income Common Stockholders |
| 65.57M | 105.49M | -382.61M | 176.00M | -461.85M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 733.95M | 997.00M | 1.36B | 1.76B | 1.62B | Total Assets |
| 16.00B | 16.19B | 16.49B | 17.27B | 16.22B | Total Debt |
| 8.99B | 8.98B | 9.13B | 8.99B | 7.80B | Net Debt |
| -733.95M | 7.99B | 8.24B | 7.23B | 6.18B | Total Liabilities |
| 9.83B | 9.84B | 9.98B | 10.06B | 8.67B | Stockholders Equity |
| 5.16B | 5.51B | 5.84B | 6.24B | 6.53B |
| Cash Flow | Free Cash Flow | |||
| 537.72M | 648.15M | 795.94M | 758.81M | 29.19M | Operating Cash Flow |
| 537.72M | 648.15M | 798.94M | 761.81M | 424.24M | Investing Cash Flow |
| -597.37M | -128.79M | -906.86M | -532.35M | -87.80M | Financing Cash Flow |
| -252.32M | -278.94M | -801.27M | -29.48M | -213.20M |
Vornado Realty Technical Analysis
Negative
39.75
Price Trends
41.23
Negative
41.69
Negative
35.91
Positive
Market Momentum
-0.60
Positive
46.12
Neutral
32.34
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VNO, the sentiment is Negative. The current price of 39.75 is below the 20-day moving average (MA) of 40.75, below the 50-day MA of 41.23, and above the 200-day MA of 35.91, indicating a neutral trend. The MACD of -0.60 indicates Positive momentum. The RSI at 46.12 is Neutral, neither overbought nor oversold. The STOCH value of 32.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VNO.
Vornado Realty Risk Analysis
Vornado Realty disclosed 42 risk factors in its most recent earnings report. Vornado Realty 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
Vornado Realty Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $1.42B | 29.99 | 5.12% | 1.65% | 3.83% | -5.55% | |
64 Neutral | $15.38B | 957.25 | 1.32% | 1.84% | -1.30% | -80.81% | |
63 Neutral | $30.37B | 347.31 | 0.80% | 2.66% | 9.48% | ― | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
60 Neutral | $11.77B | 748.67 | 0.23% | 5.88% | 4.10% | -92.47% | |
54 Neutral | $4.67B | 786.64 | 0.71% | 5.03% | 5.12% | ― | |
52 Neutral | $464.48M | ― | -11.53% | 3.31% | -11.47% | -89.12% |
* Real Estate Sector Average
Performance Comparison
VNO
Vornado Realty
39.75
14.48
57.30%
BXP
Boston Properties
69.00
8.76
14.54%
HPP
Hudson Pacific Properties
3.15
-3.41
-51.98%
SLG
SL Green Realty
61.96
13.98
29.14%
VTR
Ventas
67.87
24.83
57.69%
ESRT
Empire State Realty
8.54
-1.14
-11.78%
Vornado Realty Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: -6.18% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Neutral
The earnings call reflected strong performance in leasing and strategic debt management, particularly in New York, alongside challenges such as declining FFO and high construction costs. The focus on leasing successes and long-term growth suggests cautious optimism, despite short-term financial challenges.Highlights
Significant Leasing Activity in New York
Leased 3.34 million square feet overall in 2024, with 2.65 million square feet in New York office at market-leading $104 starting rents, marking a 49% stock price increase in 2024 after a 35% increase in 2023.
Strong Performance at Penn Two
Penn Two is expected to reach 80% leased by year-end with rents above underwriting. Penn Two's incremental yield increased to 10.2%.
Debt Management Achievements
Repaid $450 million unsecured bonds and expect to relieve the balance sheet of $700 million of debt with the master lease to NYU at 770 Broadway.
LEED Certification Milestone
Entire portfolio is 100% LEED certified, marking Vornado as the first simulation to achieve this milestone.
Lowlights
Decline in Comparable FFO
Comparable FFO was $2.26 per share for 2024, down from 2023, primarily due to lower NOI from known move-outs and higher net interest expense.
Challenging Short-Term Financial Outlook
Forecast for 2025 is slightly lower than 2024, with significant earnings growth not expected until 2027.
High Construction Costs and Interest Rates
New York construction costs have doubled over the last six to seven years, and interest rates remain high, freezing new supply and complicating new developments.
Company Guidance
During the Vornado Realty Trust Fourth Quarter 2024 Earnings Conference Call, the management provided several metrics and guidance points. Steven Roth expressed optimism about the New York real estate market, highlighting a 10.7% availability in premium office space, compared to 20.1% in lower-tier markets, with expectations for rent increases. Vornado’s stock price rose by 49% in 2024 following a 35% rise in 2023. The company leased 3.34 million square feet in 2024, including 2.65 million square feet in New York offices at $104 starting rents, experiencing a 2.5% cash and 10.9% GAAP mark-to-market increase. The company also achieved 100% LEED certification across its portfolio. Michael Franco discussed financial performance, noting a comparable FFO of $2.26 per share for 2024, with expectations for a slight decrease in 2025 due to lease termination income impacting 2024 results. Office occupancy increased to 88.8%, with projections to reach the low 90s in 2025. The company anticipates significant earnings growth by 2027, driven by leasing activities and market conditions.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.