Investment Thesis
STAG generates strong operating cash flow (52.4% FCF margin) and maintains moderate leverage (0.89x D/E), but fundamentals show concerning divergence: revenue growing 10.1% YoY while net income grows only 0.1%, indicating margin compression and poor capital efficiency (ROE 1.7%, ROA 0.9%). Critically low cash position ($8.9M) relative to $3.5B liabilities raises liquidity concerns.
Strengths
- Strong revenue growth of 10.1% YoY demonstrates market demand and operational expansion
- Excellent free cash flow generation at $117.4M with 52.4% FCF margin, core strength for REIT distributions
- Solid net profit margin of 27.7% and substantial asset base ($7.2B) with reasonable leverage ratio
Risks
- Severe capital efficiency crisis: ROE of 1.7% and ROA of 0.9% indicate shareholder capital generates minimal returns
- Earnings deterioration masked by revenue growth: +10.1% revenue growth but only +0.1% net income growth signals margin compression and potential operational headwinds
- Acute liquidity risk: only $8.9M cash against $3.5B total liabilities and $3.2B long-term debt creates refinancing vulnerability
Key Metrics to Watch
- Net income growth trajectory - must accelerate above revenue growth rate to indicate margin recovery
- Cash and equivalents levels - monitor for covenant compliance and refinancing capacity
- Return on equity and return on assets - improvements needed to justify capital structure
Financial Metrics
Revenue
224.2M
Net Income
62.0M
EPS (Diluted)
$-0.26
Free Cash Flow
117.4M
Total Assets
7.2B
Cash
8.9M
Profitability Ratios
Gross Margin
N/A
Operating Margin
N/A
Net Margin
27.7%
ROE
1.7%
ROA
0.9%
FCF Margin
52.4%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.89x
Debt/Assets
49.0%
Interest Coverage
N/A
Long-term Debt
3.2B
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: 2026-05-06T13:56:03.677233 |
Data as of: 2026-03-31 |
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