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01/11 11:06
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals a concerning decline in total revenue and NOI, alongside a slight decrease in occupancy and same store rent. Despite an increased dividend and share repurchases, these are overshadowed by unclear management responses and weak market performance in key areas like Atlanta. The Q&A highlights uncertainties, such as the vague explanation regarding swap strategies and the potential challenges in hitting lease rate growth targets. These factors suggest a negative sentiment, likely leading to a stock price decrease in the short term.
Net Loss $6,900,000 (compared to net income of $26,400,000 in Q1 2024) - The loss is attributed to a decrease in total revenue from $67,600,000 in Q1 2024 to $63,200,000 in Q1 2025.
Total Revenue $63,200,000 (down from $67,600,000 in Q1 2024) - The decrease is due to a 1% decline in same store revenues.
NOI (Net Operating Income) $37,800,000 (down from $41,100,000 in Q1 2024) - The decrease is attributed to a 3.8% decline in same store NOI.
Core FFO (Funds From Operations) $19,100,000 or $0.75 per diluted share (up from $0.74 per diluted share in Q1 2024) - The increase is due to improved operational efficiencies.
Dividend $0.51 per share (increased by 147.6% since inception) - The dividend was 1.4 times covered by core FFO with a payout ratio of 68.3%.
NAV (Net Asset Value) $44.2 (low end) to $58.2 (high end) with a midpoint of $51.2 - Based on stable cap rates ranging from 5.25% to 5.75%.
Occupancy Rate 94.4% - This reflects a slight decrease in occupancy compared to previous quarters.
Same Store Rent Decreased by 1.3% - This decline is part of the overall decrease in same store revenues.
Operating Expense Growth 3.7% - This growth rate is consistent with previous quarters.
Repurchase of Shares $7,600,000 spent on repurchasing 223,109 shares at an average price of $34.29 per share - This was done at a 33% discount to the current NAV midpoint.
CapEx (Capital Expenditures) $6,000,000 in recurring and nonrecurring CapEx in Q1 - This is down year over year, indicating a stable run rate.
Upgrades: Completed two full and partial upgrades, leased 201 upgraded units, achieving an average monthly rent premium of $62 and a 16.1% return on investment.
Technology Packages: Installed 11,389 technology packages resulting in an average monthly rental increase of $43 per unit.
Occupancy Rates: Occupancy ended the quarter at 94.4%, with significant growth in Nashville and Phoenix, reaching 95.4% and 96.6% respectively.
New Lease Growth: April month-to-date has seen improvement with 20 properties out of 35 showing positive new lease growth.
Market Absorption: Over 38,000 units were absorbed nationally, with Atlanta, Phoenix, and Dallas being the top markets.
Operational Efficiency: Operating expense growth finished the quarter at 3.7%, maintaining moderate growth.
Repairs and Maintenance: Repairs and maintenance expenses were in line at 4.9%, with turn costs improving by 2% year-over-year.
Share Buyback Program: Purchased 223,109 shares of common stock totaling approximately $7.6 million at an average price of $34.29 per share.
Dividend Increase: Quarterly dividend of $0.51 per share was approved, with a 1.4 times coverage by core FFO.
NAV Estimate: Updated NAV per share range is $44.2 to $58.2, with a midpoint of $51.2.
Net Loss: The company reported a net loss of $6,900,000 for Q1 2025, a significant decline from a net income of $26,400,000 in Q1 2024, indicating potential financial instability.
Decreased Occupancy and Revenue: Same store rent and occupancy decreased by 1.3% and 0.3% respectively, leading to a 3.8% decrease in same store NOI compared to Q1 2024, highlighting challenges in maintaining rental income.
Economic Factors: The company is facing pressures from the current interest rate environment, which has influenced their guidance for earnings and core FFO.
Supply Chain Challenges: Potential supply disruptions and price increases due to tariffs are being monitored, although the current impact on operations is described as muted.
Market Competition: Increased competition from new supply in certain markets, particularly in Atlanta and DFW, is affecting cap rates and could impact future transactions.
Operational Costs: Operating expense growth was reported at 3.7%, which may indicate rising costs that could affect profitability.
CapEx Guidance: The company anticipates stable recurring and nonrecurring CapEx needs, but any unexpected increases could strain financial resources.
Market Absorption Rates: While some markets are showing strong absorption rates, affordability challenges persist, which could limit future growth.
NAV per share range: $44.2 (low) to $58.2 (high), with a midpoint of $51.2, based on average cap rates of 5.25% to 5.75%.
Dividend: Quarterly dividend of $0.51 per share, with a 147.6% increase since inception.
Share Buyback Program: Initiated a share buyback program in Q2, purchasing 223,109 shares for approximately $7.6 million at an average price of $34.29.
Value-Add Program: Completed 8,558 upgrades, resulting in an average monthly rental increase of $172.50 per unit.
2025 Earnings per Share Guidance: Revised to a range of -$1.08 (high) to -$1.36 (low), with a midpoint of -$1.22.
Core FFO per Share Guidance: Revised to a range of $2.89 (high) to $2.61 (low), with a midpoint of $2.75.
Same Store NOI: Expected to inflect higher over the remainder of the year.
CapEx Guidance: Targeting approximately $6 million in recurring and nonrecurring CapEx for the year.
Quarterly Dividend: NXRT paid a quarterly dividend of $0.51 per share on 03/31/2025.
Dividend Increase: Since inception, NXRT has increased its dividend by 147.6%.
Dividend Coverage: For Q1, the dividend was 1.4 times covered by core FFO with a 68.3% payout ratio.
Next Dividend Payment: A quarterly dividend of $0.51 per share is payable on 06/30/2025 to stockholders of record on 06/16/2025.
Share Buyback Program: Since 04/01/2025, NXRT has purchased 223,109 shares of its common stock totaling approximately $7,600,000 at an average price of $34.29 per share.
Buyback Program Impact: The share buyback program is expected to help close the valuation gap and is supported by free cash flow.
Future Buyback Plans: NXRT plans to maintain a steady buyback program and may use proceeds from asset sales to fund additional buybacks.
The earnings call presents mixed signals: slight improvements in core FFO and NOI, a dividend increase, and effective cost management are positive. However, revenue decline, occupancy drop, and weak lease rates offset these gains. The Q&A reveals management's optimism, but also highlights concerns about sustainability of savings and unclear asset acquisition strategy. The overall sentiment is neutral, as the positives and negatives balance out, suggesting limited stock price movement in the near term.
The earnings call highlights several concerns: declining revenue, net loss, and occupancy rates, coupled with market-specific weaknesses and economic uncertainty. The Q&A section reveals management's vague responses to critical questions, especially regarding non-revenue-generating expenditures. Despite a strong dividend history and share repurchase program, the negative financial results and cautious outlook outweigh these positives, leading to a negative sentiment.
The earnings call presents mixed signals. The financial performance shows a net loss and declining revenue, which are negative indicators. However, the dividend increase and share buyback program are positive factors. The Q&A reveals management's cautious optimism and strategic buybacks but also highlights uncertainties in market conditions and future guidance. The negative financial results are somewhat offset by optimistic guidance and shareholder returns, leading to a neutral overall sentiment.
The earnings call reveals a concerning decline in total revenue and NOI, alongside a slight decrease in occupancy and same store rent. Despite an increased dividend and share repurchases, these are overshadowed by unclear management responses and weak market performance in key areas like Atlanta. The Q&A highlights uncertainties, such as the vague explanation regarding swap strategies and the potential challenges in hitting lease rate growth targets. These factors suggest a negative sentiment, likely leading to a stock price decrease in the short term.
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