Investment Thesis
Agree Realty demonstrates solid operational profitability with a 47.4% operating margin and strong interest coverage of 13.9x, indicating healthy debt servicing capability. However, negative free cash flow of -$370.4M coupled with capital expenditures exceeding operating cash flow by $370.4M raises concerns about capital intensity and cash generation sustainability despite healthy net income.
Strengths
- Strong operating margin of 47.4% demonstrates efficient operational management
- Robust interest coverage ratio of 13.9x indicates strong ability to service debt obligations
- Moderate leverage with debt-to-equity of 0.53x provides financial flexibility
- Solid net income growth of 3.8% YoY despite flat revenue growth shows operational leverage
Risks
- Severe negative free cash flow of -$370.4M indicates capital expenditures significantly exceed operating cash flow, raising sustainability concerns
- Low liquidity with only $16.3M in cash against $3.3B long-term debt creates refinancing risk
- Poor return on equity of 3.3% and return on assets of 2.1% suggest inefficient capital deployment
- Revenue flatness (0.0% YoY) combined with heavy capex spending indicates potential margin pressure ahead
Key Metrics to Watch
- Operating cash flow trends and ability to cover capital expenditures organically
- Debt service coverage ratio and refinancing activities
- Revenue growth acceleration and property portfolio performance
- Capital expenditure levels and ROA improvement trajectory
Financial Metrics
Revenue
718.4M
Net Income
204.3M
EPS (Diluted)
$1.77
Free Cash Flow
-370.4M
Total Assets
9.8B
Cash
16.3M
Profitability Ratios
Gross Margin
N/A
Operating Margin
47.4%
Net Margin
28.4%
ROE
3.3%
ROA
2.1%
FCF Margin
-51.6%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.53x
Debt/Assets
36.0%
Interest Coverage
13.92x
Long-term Debt
3.3B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-19T12:14:11.192689 |
Data as of: 2025-12-31 |
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