Shares of Stratus Properties Inc. (STRS Quick QuoteSTRS - Free Report) have gained 10.2% since the company reported its earnings for the quarter ended June 30, 2025. This compares to a 1.2% change in the S&P 500 index over the same time frame. However, over the past month, the stock has slipped 3.6%, underperforming the broader S&P 500’s 2.5% growth. This mixed performance highlights investor caution following the company’s earnings release despite initial enthusiasm.

Stratus reported net income per share of 3 cents in the second quarter of 2025, reversing a net loss of 21 cents per share in the year-ago quarter. 

Revenues rose to $11.6 million, an increase of 36.7% from $8.5 million in the second quarter of 2024, primarily driven by the sale of two Amarra Villas homes versus one sale in the prior-year period.

Stratus reported net income attributable to common stockholders of $0.3 million, reversing a net loss of $1.7 million in the year-ago quarter.

Stratus Properties Inc. Price, Consensus and EPS Surprise

Stratus Properties Inc. price-consensus-eps-surprise-chart | Stratus Properties Inc. Quote

Other Key Business Metrics

Earnings before interest, taxes, depreciation and amortization (EBITDA) improved significantly in the quarter, rising to a loss of just $0.2 million compared with a loss of $1.3 million a year earlier. Leasing operations contributed strongly, posting $6.3 million in operating profit versus $1.8 million last year, helped by a $5 million pre-tax gain from the sale of the West Killeen Market retail project. In contrast, real estate operations incurred a $3.5 million loss, partly due to a $1 million write-off of receivables related to previously sold properties.

Capital expenditures and development spending totaled $9.8 million during the quarter, primarily tied to Holden Hills Phase 1 and The Saint George multi-family project. Importantly, Stratus ended June 2025 with $59.4 million in cash and cash equivalents, up from $20.2 million at year-end 2024, and no borrowings drawn on its revolving credit facility.

Management Commentary

Chairman and CEO William H. Armstrong III emphasized that despite ongoing market challenges, the company achieved “significant milestones” in the first half of 2025. These included completing construction of The Saint George, finishing the last two Amarra Villas homes, and substantially advancing infrastructure at Holden Hills Phase 1. Armstrong also highlighted the $47.8 million cash distribution from the newly formed Holden Hills Phase 2 joint venture and the sale of West Killeen Market, both of which bolstered liquidity. He underscored that the strengthened cash position provides flexibility for share repurchases, debt reduction, or reinvestment in the development pipeline.

Factors Influencing Results

The revenue growth in the quarter was largely transaction-driven, particularly from the higher-value Amarra Villas home sales and the disposal of West Killeen Market. However, lower aggregate sales in the first half compared with last year’s sizable land and home transactions significantly impacted year-to-date results. On the cost side, higher real estate operating expenses and a receivables write-off weighed on margins. Leasing operations, supported by stabilized assets and asset sales, offset some of these headwinds.

Other Developments

During the quarter, Stratus entered into a joint venture with a third-party investor to develop Holden Hills Phase 2, a 570-acre mixed-use project within the Barton Creek community. The partnership immediately returned $47.8 million in cash to Stratus. Additionally, the board authorized a significant expansion of the share repurchase program from $5 million to $25 million. As of Aug. 8, 2025, the company had repurchased 135,620 shares at an average price of $22.13 per share, with $22 million still available under the program.