It has been about a month since the last earnings report for Extra Space Storage (EXR Quick QuoteEXR - Free Report) . Shares have lost about 0.4% in that time frame, underperforming 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 recent earnings report in order to get a better handle on the important catalysts.

Extra Space Storage Q3 FFO & Revenues Beat Estimates

Extra Space Storage reported third-quarter 2020 core FFO per share of $1.31, beating the Zacks Consensus Estimate of $1.24. The figure comes in 5.6% higher than the prior-year quarter’s $1.24.

Results reflect strong occupancy and increased rental rates to new customers, partly offset by lower late fees, decline in rental rates for existing customers and higher bad-debt expenses related to non-paying tenants.

Healthy occupancy trend continued in October also with same-store square-foot occupancy of 95.9% as of Oct 31, 2020, up 260 bps year on year.

Quarterly revenues came in at $343 million, up 1.6% year over year. Moreover, the revenue figure surpassed the Zacks Consensus Estimate of $330.6 million.

Quarter in Detail

Same-store rental revenues edged down 1.5% year over year to $271.7 million during the third quarter. This drop in same-store revenues resulted from decline in rental rates for existing customers, lower late fees collected and higher bad-debt expenses related to non-paying tenants. However, higher occupancy provided supportwith same-store square-foot occupancy up 210 basis points (bps) year on year to 95.9% as of Sep 30, 2020.

Same-store expenses flared up 1.5% year on year to $79.3 million and reflect increases in marketing expenses and property taxes. Same-store NOI fell 2.7% year over year to $192.5 million.

Balance Sheet

Extra Space Storage exited third-quarter 2020 with $74.8 million of cash and cash equivalents, up from the $65.7 million recorded at the end of 2019. Notably, as of Sep 30, 2020 the company's percentage of fixed-rate debt to total debt was 77.7%.

During the September-end quarter, the company did not sell any shares of common stock using its ATM program. Extra Space Storage had $298.6 million available for issuance under its ATM program as of Sep 30, 2020.

Portfolio Activity

During the July-September quarter, Extra Space Storage, in conjunction with its joint-venture partners, acquired two stores at completion of construction for a total cost of $19.6 million. Of this, the company invested $9.8 million.

In the reported quarter, Extra Storage acquired eight operating stores for a total cost of $87.4 million.

Extra Space Storage added 42 stores (gross) to its third-party management platform. As of Sep 30, 2020, it managed 718 stores for third-parties and 253 stores owned in joint ventures, with total stores under management reaching 971.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Extra Space Storage has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Extra Space Storage has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.