It has been about a month since the las t earnings report for Extra Space Storage (EXR). Shares have lost about 1.2% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Extra Space Storage due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recen t earnings report in order to get a better handle on the important drivers.
Extra Space Storage Q1 FFO and Revenues Top Estimates
Extra Space Storage's first-quarter 2019 core FFO per share of $1.16 outpaced the Zacks Consensus Estimate of $1.14. The figure also comes in 6.4% higher than $1.09 in the prior-year quarter.
Results reflect growth in same-store NOI despite pressure from new supply in 2019. The company witnessed higher rental rates for both new and existing customers.
Quarterly revenues of $311.5 million climbed 9.1% year over year. The revenue figure also exceeded the Zacks Consensus Estimate of $309.4 million. Behind the Headlines
Same-store rental revenues increased 4.2% year over year to $252.3 million during the first quarter, while same-store NOI was up 4.8% to $180.5 million. The upswing in same-store revenues stemmed from higher rental rates for both new and existing customers. However, same-store square foot occupancy was 91.6% as of Mar 31, 2019, down 20 basis points from 91.8% as of Mar 31, 2018.
Notably, during the reported quarter, Atlanta, Chicago, Hawaii, Las Vegas, Phoenix and Sacramento were the major markets, which recorded revenue growth above the company's portfolio average. Nonetheless, markets, including Charleston, Dallas, Denver, Houston, Miami and Tampa, performed below the company's portfolio average. Portfolio Activity
Extra Space Storage acquired two stores at the completion of construction and purchased its joint-venture (JV) partner's stake in 12 stores for an aggregate investment of around $222.3 million, during the January-March period. Also, in combination with its JV partners, the company acquired one operating store and six Certificate of Occupancy stores, for $210.6 million. Of this, the company has invested $47.7 million. Further, the company added 46 stores (on a gross basis) to its third-party management platform.
As of Mar 31, 2019, the company managed 577 stores for third-party owners. Furthermore, with additional 228 stores owned and operated in joint ventures, total stores under management reached 805. Balance Sheet
Extra Space Storage exited first-quarter 2019 with roughly $39 million of cash and cash equivalents, down from $57.5 million recorded at the end of 2018. As of Mar 31, 2019, the company's percentage of fixed-rate debt to total debt was 72.0%.
During the reported quarter, the company did not sell any shares of common stock using its ATM equity program. Finally, as of Mar 31, 2019, Extra Space Storage had $257.9 million available for issuance under its ATM equity program. Outlook
Extra Space Storage anticipates full-year 2019 core FFO per share of $4.76-$4.85.
The company projects same-store revenue growth of 2- 3% and same-store NOI growth of around 1.25- 2.75% for the current year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
At this time, Extra Space Storage has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Extra Space Storage has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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