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Why Is Extra Space Storage (EXR) Up 0.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Extra Space Storage (EXR - Free Report) . Shares have added about 0.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Extra Space Storage due for a pullback? 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 drivers.
Extra Space Storage Tops Q1 FFO Estimates, Raises Outlook
Extra Space Storagereported first-quarter 2021 core FFO per share of $1.50, beating the Zacks Consensus Estimate of $1.49. The figure was also 21% higher than the prior-year quarter’s $1.24.
Quarterly revenues were $358.9 million, up 7.9% year over year. However, the top line lagged the Zacks Consensus Estimate of $362 million.
Results reflect strong average occupancy and higher average rates to customers for the quarter, partially offset by lower late fees. The company also experienced reductions in payroll and marketing expenses, partially offset by increases in property taxes as well as repairs and maintenance. The REIT also raised its full-year core FFO per share outlook.
Per Joe Margolis, CEO of Extra Space Storage, “We are off to a great start in 2021, with the strongest first quarter occupancy in our history, resulting in strong same-store NOI growth, and excellent FFO growth of 21.0%. Our record-high occupancy is resulting in greater pricing power, and we are well positioned for a strong summer leasing season.”
Quarter in Detail
Same-store rental revenues increased 4.6% year over year to $278.9 million in the first quarter. The uptick in same-store revenues resulted from higher average occupancy and higher average rates to customers for the quarter, partially negated by lower late fees. Same-store square-foot occupancy expanded 480 basis points (bps) year over year to 95.7% as of Mar 31, 2021.
Same-store expenses edged down 0.2% year over year to $77.9 million and reflect reductions in payroll and marketing expenses. This was partially offset by increases in property taxes as well as repairs and maintenance because of elevated snow removal expense. Consequently, same-store net operating income (NOI) increased 6.5% year over year to nearly $201 million.
Balance Sheet
Extra Space Storage exited first-quarter 2021 with $60.3 million of cash and cash equivalents, down from $109.1 million recorded at the end of 2020. Notably, as of Mar 31, 2021, the company's percentage of fixed-rate debt to total debt was 67%.
In the quarter, the company sold 1,600,000 shares of common stock through an overnight offering for $129.13 per share and another 585,685 shares of common stock, using its "at the market" ("ATM") program, at an average sales price of $115.90 per share, reaping net proceeds of $273.7 million. With this, the company did not have any shares available for issuance under its ATM program as of Mar 31, 2021. It expects to file a new plan in second-quarter 2021.
Moreover, the company closed $27.1 million in mortgage and mezzanine bridge loans, and sold $81.8 million in mortgage bridge loans in the first quarter.
Also, it received an issuer credit rating of Baa2, with a stable outlook from Moody's Investors Service.
Portfolio Activity
During the January-March period, Extra Space Storage acquired nine operating stores for $148.4 million.
The company also disposed of 16 wholly-owned stores into a new joint venture for aggregate sales price of $168.9 million. This resulted in a $64.5-million gain on real estate transactions.
Extra Space Storage added 61 stores (gross) to its third-party management platform. As of Mar 31, 2021, it managed 763 stores for third parties and 269 stores in joint ventures, with total stores under management reaching 1,032.
Outlook
The REIT raised the full-year core FFO per share range to $5.95-$6.10, marking a $7.5 expansion at the mid-point.
The company raised same-store revenue range to 5-6%, while same-store expense growth was reduced to 2-3%, leading to a same-store NOI growth range of 6-8%, denoting a 175-basis point expansion at the mid-point. The uptick in same-store expectations mirror better-than-expected first-quarter performance, relaxed legislative restrictions in certain markets, as well as better-than-expected resilience in storage fundamentals amid the vaccine roll-out. It has also guided for $350 million in acquisitions.
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 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 C. 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. 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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Why Is Extra Space Storage (EXR) Up 0.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Extra Space Storage (EXR - Free Report) . Shares have added about 0.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Extra Space Storage due for a pullback? 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 drivers.
Extra Space Storage Tops Q1 FFO Estimates, Raises Outlook
Extra Space Storagereported first-quarter 2021 core FFO per share of $1.50, beating the Zacks Consensus Estimate of $1.49. The figure was also 21% higher than the prior-year quarter’s $1.24.
Quarterly revenues were $358.9 million, up 7.9% year over year. However, the top line lagged the Zacks Consensus Estimate of $362 million.
Results reflect strong average occupancy and higher average rates to customers for the quarter, partially offset by lower late fees. The company also experienced reductions in payroll and marketing expenses, partially offset by increases in property taxes as well as repairs and maintenance. The REIT also raised its full-year core FFO per share outlook.
Per Joe Margolis, CEO of Extra Space Storage, “We are off to a great start in 2021, with the strongest first quarter occupancy in our history, resulting in strong same-store NOI growth, and excellent FFO growth of 21.0%. Our record-high occupancy is resulting in greater pricing power, and we are well positioned for a strong summer leasing season.”
Quarter in Detail
Same-store rental revenues increased 4.6% year over year to $278.9 million in the first quarter. The uptick in same-store revenues resulted from higher average occupancy and higher average rates to customers for the quarter, partially negated by lower late fees. Same-store square-foot occupancy expanded 480 basis points (bps) year over year to 95.7% as of Mar 31, 2021.
Same-store expenses edged down 0.2% year over year to $77.9 million and reflect reductions in payroll and marketing expenses. This was partially offset by increases in property taxes as well as repairs and maintenance because of elevated snow removal expense. Consequently, same-store net operating income (NOI) increased 6.5% year over year to nearly $201 million.
Balance Sheet
Extra Space Storage exited first-quarter 2021 with $60.3 million of cash and cash equivalents, down from $109.1 million recorded at the end of 2020. Notably, as of Mar 31, 2021, the company's percentage of fixed-rate debt to total debt was 67%.
In the quarter, the company sold 1,600,000 shares of common stock through an overnight offering for $129.13 per share and another 585,685 shares of common stock, using its "at the market" ("ATM") program, at an average sales price of $115.90 per share, reaping net proceeds of $273.7 million. With this, the company did not have any shares available for issuance under its ATM program as of Mar 31, 2021. It expects to file a new plan in second-quarter 2021.
Moreover, the company closed $27.1 million in mortgage and mezzanine bridge loans, and sold $81.8 million in mortgage bridge loans in the first quarter.
Also, it received an issuer credit rating of Baa2, with a stable outlook from Moody's Investors Service.
Portfolio Activity
During the January-March period, Extra Space Storage acquired nine operating stores for $148.4 million.
The company also disposed of 16 wholly-owned stores into a new joint venture for aggregate sales price of $168.9 million. This resulted in a $64.5-million gain on real estate transactions.
Extra Space Storage added 61 stores (gross) to its third-party management platform. As of Mar 31, 2021, it managed 763 stores for third parties and 269 stores in joint ventures, with total stores under management reaching 1,032.
Outlook
The REIT raised the full-year core FFO per share range to $5.95-$6.10, marking a $7.5 expansion at the mid-point.
The company raised same-store revenue range to 5-6%, while same-store expense growth was reduced to 2-3%, leading to a same-store NOI growth range of 6-8%, denoting a 175-basis point expansion at the mid-point. The uptick in same-store expectations mirror better-than-expected first-quarter performance, relaxed legislative restrictions in certain markets, as well as better-than-expected resilience in storage fundamentals amid the vaccine roll-out. It has also guided for $350 million in acquisitions.
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 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 C. 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. Notably, Extra Space Storage has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.