Investment Thesis
Broadstone Net Lease demonstrates strong cash generation (61.6% FCF margin) and exceptional operating margins (65.8%), typical of mature REIT operations. However, a severe 41.9% YoY decline in diluted EPS despite 5.2% revenue growth signals potential share dilution or unidentified operational deterioration that requires urgent clarification before considering investment.
Strengths
- Exceptional free cash flow generation at 61.6% of revenue with minimal capex requirements
- Very high operating and net margins (65.8% and 38.2%) reflecting strong pricing power in net lease portfolio
- Moderate leverage at 0.92x debt-to-equity ratio with interest coverage of 4.0x providing reasonable solvency
Risks
- Diluted EPS collapsed 41.9% year-over-year despite revenue growth, indicating significant shareholder dilution or unidentified earnings headwinds
- Abysmal returns on capital with ROE of 1.6% and ROA of 0.8% show inefficient deployment of $5.8B asset base
- Low cash position of $20.3M (0.35% of assets) relative to $2.7B debt load creates minimal liquidity buffer for operational stress
Key Metrics to Watch
- Trend in diluted EPS and share count to understand source of earnings decline
- Return on equity progression and capital allocation efficiency
- Operating cash flow sustainability relative to debt service coverage
Financial Metrics
Revenue
121.4M
Net Income
46.4M
EPS (Diluted)
$0.24
Free Cash Flow
74.7M
Total Assets
5.8B
Cash
20.3M
Profitability Ratios
Gross Margin
N/A
Operating Margin
65.8%
Net Margin
38.2%
ROE
1.6%
ROA
0.8%
FCF Margin
61.6%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.92x
Debt/Assets
48.3%
Interest Coverage
3.98x
Long-term Debt
2.7B
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: 2026-05-06T14:33:58.724106 |
Data as of: 2026-03-31 |
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